We negotiate with all types of people at any time and anywhere. Whether it is with your teenage son or with a potential buyer regarding your business, you are required to use your negotiation skills.
In his book “Never Split the Difference”, Chris Voss, a former FBI hostage negotiator, explains how we can use similar and powerful negotiation tactics in business or everyday life.
Below are some of them, which I personally have been using in M&A projects, both on the buy and sell side. One good thing about those tricks is that they ensure a win-win game. After all, we want to have a longstanding business relationship and no parties should leave the table without a total commitment to the agreed plan. Unlike other popular negotiation advice, those aim for your counterpart to feel in control and be convinced that it is in his/ her best interest to work with you.
1. Never ask a “Why” question
According to Voss, in every culture, the question “Why” leads to a defensive answer and attitude of the respondent. However, during negotiations, all you need to do is collect as much information as you can. In this respect, a defensive counterpart is not ideal, as s/he will not be willing to give away the “true reason”. Instead, you can use “What” or “How”: “How am I supposed to do that?”, “How can we solve this problem?”, “What makes you ask that?”
2. Mirror what your counterparts say
Empathy will give more information in return. One way to ensure that is to repeat the last or critical 3 words of what someone said. That also stimulates bonding and helps your counterpart connect thoughts. The other person would feel listened to. At the same time, it will cause people to go on with a further explanation. For instance, you can simply answer your counterpart with the same words, in a more questioning but calm way, when s/he says “I have made the best offer that could ever be”.
3. Validate emotions by acknowledging them
Labels work perfectly in order to identify emotions and information that have not been expressed yet. The effectiveness of labeling is based on your ability to observe your counterpart’s words, tone, and body language. You can use labeling to diffuse a negative aspect of a negotiation or to emphasize a good one. For example: “It sounds like you are under pressure.”, “It seems like your investment committee is concerned.”, “It looks like you have problems with the staffing capacity.”
4. Address the elephant in the room
It is always better to bring up the negative assumptions, which the other side could possess, very early in the beginning of negotiations. When parties have concerns or prejudices, those prevent them from thinking clearly and even communicating honestly. Also known as “Accusation Audit”, this trick is one of the fastest ways to build rapport between parties. For example: “You are going to think that I am another investor who wants to acquire companies at ridiculous prices.” or the opposite if you are a seller.
5. Ask “No-oriented” questions
“Yes” means commitment. Your counterpart needs to feel in control and should not be anxious by realizing that you are expecting a “Yes”. Therefore, a “No-oriented” question is a magical tool and works way more effectively. You can trigger a “No” by intentionally mislabeling an emotion or by asking an unusual question that can only be responded to negatively. One of the most favorite examples is “Is now a bad time to talk?”. There are alternatives as well: “Are you against…?” or “Have you given up on…?” (when you have not received any response).
I have tested all of those which produced positive outcomes in 70% of the cases. Therefore, I strongly recommend them to my co-workers. As long as you practice and add new tools to your negotiation toolbox, there is a much higher chance to stay calm and to close successful deals with less effort. Building long-standing relations with the other stakeholders is equally important.
Bonus: More than 20% of the deals are not expected to go forward. You may think that it is fair and the other side is content, while you feel that you have made a very profitable deal for yourself. However, a lack of empathy & information asymmetry would probably prohibit covering major issues left in the background and, thus, lead to a failed long-established agreement.
Bonus 2: You do not have to close a deal with every single person in the world. If the other side is not willing to share any information or is hesitant to find a way to close a deal with you (after you have used all those tricks), then the potential deal might not be the best one. You had better focus on other leads that could be closed faster and produce a more profitable outcome.
