Negotiation Blog

Negotiating Salary: Tactics, Blunders or Best Negotiating Practices - Part I

By Marianne Eby

The recession has resulted in layoffs, and the fortunate among us were able to turn that disappointment into opportunity, possibly even to pursue a new career or job path.  A Watershed workshop participant did just that. Here’s a chance to learn from the mistakes of someone else negotiating his salary, who we'll call Bill. To protect everyone’s privacy, we’ve changed the names.

Bill had taken our Best Negotiating Practices workshop when he was in international sales at his previous company. He had since been laid off in a recession-induced downsizing. He decided to switch career tracks, and follow his passion in international labor relations. He easily landed a temporary position at a large corporation, and after almost a year, his manager indicated that she wanted to bring him on as a full-time employee. Bill was thrilled, and stopped his job search.
 
A few weeks later an HR recruiter at his company, who we'll call Jen, scheduled Bill for an interview. This surprised Bill, as he felt that the company already knew his work quality and production. Bill researched salary ranges and prepared for the interview.
 
Bill knocked on Jen’s door and she beckoned him in, but was distracted reading a report on her computer and making comments under her breath. She then picked up another document on her desk and flipped through a few pages, laughing quietly to herself before turning to Bill. 
 
“How much do you want?” Jen asked. These were the first words out of her mouth. Bill had done his research on salaries (he knew the upper limit of $125K and the lower limit of $70K) for similar positions at the company and in the field, and had asked other colleagues about Jen’s negotiation style. He was prepared for Jen’s direct approach, and asked for $127,000 (just above top of the salary range for someone like him with a masters degree in international labor relations and 3 years of general international business experience.)
 
Jen responded, “Absolutely not.” She then told Bill that the more appropriate salary is $78,000.
 
What should Bill have done next?
Some would start negotiating up from $78K and focus on the number, and some would try to convince Jen that her market value of the position was wrong. The Best Negotiating Practice would be to refrain from engaging in bargaining from persuasion. Neither approach is recommended. The Best Negotiating Practice would be to show surprise in a congenial way (wow, that sort of salary is a surprise to me), and then ask lots of questions about the position in general. The idea would be to clarify what the company was envisioning in terms of expertise, experience, travel, visibility, etc., and only after exhausting that line of discussion, start asking about how the $78K was derived.
 

 

Negotiating Tip

Summarize early and often.


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Negotiation Blog

Negotiating Salary: Tactics, Blunders or Best Negotiating Practices - Part III

By Thomas Wood

Let’s magnify the various moves Bill and Jen made in their salary negotiation that my colleague explored in previous blogs Part I and Part II. They reached a deal, but was it to thier mutual satisfaction? We’ll categorize the moves as Tactics, Blunders and Best Negotiating Practices (BNPs). Do you agree?

  1. Negotiating Tactics – moves made for short term advantage that risk losing credibility or trust;
  2. Negotiating Blunders – moves or approaches that fail to achieve their objective or any other positive outcome; and
  3. Best Negotiating Practices (BNP) – skills, strategies and behaviors that are designed to create and capture value in negotiations.
Tactic, Blunder or BNP?
 
 
Move
 
 
Response & Impact
Blunder
Bill relied on this part-time position and didn’t have a Plan B – other interviews or networking
Bill’s failure to continue to build his BATNAs (his Plan Bs) puts him at a disadvantage
BNP
Bill prepares an opening offer and support
He is ready when Jen asks
Tactic
Jen ignores Bill at first to make him feel unimportant
It works mildly, but Bill’s preparation keeps him confident
Blunder
Jill opens the conversation without any rapport building or excitement about Bill joining the organization
Jen misses the opportunity to build an alliance with Bill, which will make it more difficult for her to learn what matters to him. She also risks him deciding against the job.
BNP
Jen asks Bill what he wants
Hearing from Bill informs Jen up front if this conversation is worth her time. But it did come with the risk that Bill would anchor Jen by opening first.
BNP
Bill opens with his prepared opening offer of $127K.
Great opening offer – high, but justifiable, and therefore credible
Blunder
Jen says “Absolutely not” to Bill’s opening, which is the same as saying “No.”
Saying the word “No” or a similar negative response shuts down conversation
BNP
Jen opens with her opening offer of $78
Jen’s opening seems appropriate – she starts low but within a justifiable range
BNP
Bill asks “Why?”
Always a great probe, when said with sincere curiosity and not as an attack. Jen is so far from Bill’s preferred salary that he can only benefit from more information.
Blunder
Bill doesn’t wait for Jen’s answer. He starts defending his stature.
Jen is unfazed because Bill isn’t engaging her – he’s presenting to her. Bill is waiting too long to start asking questions – the best way to engage his counterpart.
BNP
Finally Bill realizes that he is not convincing Jen, and starts asking lots of engaging questions.
You can’t probe too much!
BNP
Bill next asks for Jen’s advice as to what he needs to succeed in this job.
Great open-ended question. Engaging the other side is critical. Jen’s inclination now is to help Bill, rather than to win against him.
BNP
Bill asks Jen to reconsider the salary given the information they have discussed about his background and fit for the position.
Bill needs Jen to move a lot, so his open request is a good strategy. He’s giving her a way to save face if she is convinced that his salary can go higher.
BNP
Jen makes a huge move from $73 to $103K.
Jen’s first move is big, but she saves face by having reconsidered the expertise required for the job and Bill’s fit for the position.
Blunder
Bill seems inclined to accept the offer.
Bill could have asked more questions about the new salary range, and further built the relationship. Jen probably had more to give. But Bill lacked confidence due to his non-existent BATNA (plan B).
Tactic
Bill asks about getting an alternative work schedule given the lower salary than what he had anticipated.
At least Bill asked for something to justify why he would move off his opening of $127K – the alternative work schedule. It was a “nibble,” but because he knew Jen could give it, there was little risk to the relationship in employing this tactic.

 

Negotiating Tip

Understand, access and address real interests and concerns – that is focus on WHY they want what they want, NOT on demands or positions. 


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Use the Power of "Just Asking" in your Negotiations: Robert Pattinson Does!

By Thomas Wood

Sometimes just asking can save you hundreds of dollars, or hours of negotiating. And unlike Robert Pattinson, you don't have to be acting as a quidditch team captain, a vampire, or a young billionaire to have the confidence to pull it off.

The idea made the news last week when Robert Pattinson, multimillionaire actor known for his roles in the Harry Potter series, the Twilight series and the just released Cosmopolis film, explained the way he negotiates on Jimmy Kimmel Live:

Pattinson confirmed that he is an habitual negotiator who "buys everything on Craigslist." His most recent bargain was for a 2001 Silverado listed for around $2500. He recounted bonding with the seller over gas prices, then simply asking for $300 off the price. The seller agreed, he said, and didn't really understand the concept of negotiating. "The guy's comeback was "what about $50 bucks more?"

Pattinson's "just ask" strategy was news because we don't imagine a multimillionaire celebrity haggling over $300. But it is not news for procurement professionals in big business across industries, who rely on asking for a greater discount, a changed term, extended service, faster delivery, etc. They "just keep asking," regardless of whether there is anything to justify the ask, not because they are obnoxious or uninformed, but because this tactic works. If a sharp company sales rep appropriately pushes back, an experienced procurement professional might say with light laughter, "Well, I had to ask!"

Remember that if you are "just asking" and can justify your Ask, it's strategic. But if you are "just asking" for no other reason than that it might work, you are using a tactic, which unlike strategies, are non-collaborative moves to gain short term advantage. Like any negotiating tactic, if you overuse then or use them in the wrong situations, expect to erode trust and your own credibility. 

"Just asking" in the right situations, however, does in fact work most of the time. Recently, when billed $2700 for the treatment of an infected blister, of which my insurance paid only $1800, I called the private clinic's billing department. I started with a joke ("you know I didn't have heart surgery, right?") and then simply asked: "I was hoping you could help me out." They cut my bill in half.

An easy, efficient way to practice "just asking" is when you are shopping. A client told me that they had gotten $300 off the mattress they wanted simply by walking around the desired mattress for awhile, chin in hand, saying nothing.

Thoughtful silence is a kind of probe that can work miracles, especially in flea markets and antique stores. The key is to show genuine interest. Don't point out all the problems with the merchandise (i.e., it looks damaged, it's too big, etc.) hoping the seller will see it as less valuable. Sellers, like most negotiators, would prefer a positive interaction with someone likeable who respects their business and merchandise. Complimenting the piece, and the seller's taste or selection, helps a seller invest in you as a customer and try to find a way to get you to buy that piece.

Tips when asking -- or probing -- for a quick and simple bargain:

  • As in more involved negotiations, build a little rapport with the seller first. Make small talk -- about the shop, the merchandise, the weather.
  • Treat the seller with the utmost respect -- don't badmouth the store, the the business or the merchandise. Often in antique stores the seller chose everything in the place.
  • Show genuine interest in what you're considering. If you can, know something about it. If not, ask "dumb" questions about it to show your interest and let the seller talk about it.
  • Don't try to get to the seller's "bottom" price in smaller negotiations. If you can get $300 off in a few minutes or with one question, you're getting great value for the time you've invested.
  • Keep it light. Ask "is there any flexibility on that?" Or "Can you help me out on this?" Or just look at the object quietly, with appreciation.
  • And remember, "just asking" is applicable to a lot more than price, in selling, buying and everyday negotiations that help you get what you want. Just ask!

Negotiating Tip

Prepare, prepare, prepare and stay on plan. Don't let the other party's tactics throw you off plan. Tactics are designed to do one thing - to get you off plan. Only new facts should change your plan.


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Are You Ready To Negotiate? 5 Steps To Take If You're Not

By Thomas Wood

What if you find yourself in a negotiation you're not prepared for?

At one of our workshops recently, a petroleum landman, who negotiates mineral and land rights, asked this question. Earlier that week he had received a phone call from a corporate executive with whom he eventually hoped to negotiate land leases.

He had begun his research, and knew some things about the land value, the corporate owner, and the executive. But when this executive called him out of the blue and started shooting out ideas, making offers, and using terms he didn't understand, the landman stumbled. He said that by the end of the call he had a sour taste in his mouth. The class came up with 5 powerful steps to turn lemon into lemonade.

Our client had found himself, unprepared, in the middle of a negotiation that he hadn't meant to start yet. He didn't know whether it was more important to try to capitalize on the moment, the enthusiasm, and the momentum, or whether to stall. He also wondered if the executive had purposely tried to catch him unprepared in order to gain an advantage. 

What would a master negotiator do?

There are certainly times and places for informal, impromptu bargaining. Much negotiation is accomplished at cocktail parties or business meals that are ostensibly social occasions, and in all bargaining learning to improvise is a key part of your skill-set as a negotiator.  

But improvised negotiations are an oxymoron, because they are the purposeful result of much planning. Improvised negotiations are for negotiators whose interests, positions, goals, and arguments are so familiar to them that they can talk about them spontaneously. In web designer blog "A List Apart" awhile ago, we ran across "Improvising in the Boardroom," which describes the advantages of improvising a presentation to a client if you really know your subject. "What you really bring to bear in the moment is not a rehearsed plan, but the sum total of your cumulative knowledge and experience to that point."

So when you find yourself in a negotiation or an exchange you're not prepared for, as in our landman's situation, or even something smaller in scale in the elevator or at a cocktail party, don't try to think on your feet.

Five steps you should take:

1) Stay calm. Thinking is short-circuited by anxiety. Deep breathing convinces your body and brain that it is calm and protects your cognitive ability.

2) Compliment the other party on his or her obvious expertise, and use this conversation as a chance to show respect and begin developing rapport.

3) Ask "dumb" questions (this is when "dumb is smart"). Say "clearly, you know a lot about this -- explain x to me." Change the nature of the phone call from a bargaining session to an information exchange, and take notes on answers that are useful to your process. Let them know you're taking notes, and repeat things back to them to slow the process down.

4) Buy yourself time. After a brief exchange that provides you information and builds rapport, get off the phone. Say "look, it's really great talking to you, you have some great ideas and I'm sure I'm going to learn a lot from you. I was about to head into another meeting when you called -- can I call you back?" Then do not pass go, do not collect $200, but go directly to your other meeting with yourself -- where you get back to preparing for the negotiation.

5) Prepare. Even if you have only five minutes, prepare the essentials.  Write down what you know about your and the other party's interests, likely opening offers and bottom lines, BATNAs and valuable concessions. Writing down the essentials forces you to think through your position and whether you are ready to bargain.

Negotiating Tip

Understand, access and address real interests and concerns – that is focus on WHY they want what they want, NOT on demands or positions. 


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