Negotiation tactics you need to know

It’s time. You’ve done your homework. You’re now sitting at the table about to negotiate. How is this going to go down? What tactics might the other party use against you? What tactics should you use on them? Let’s review some common tactics and how to deal with them.

” If you know the enemy and know yourself, you need not fear the result of a hundred battles”

Sun Tzu, Art of War

Hardball Tactics

Hardball tactics come in many flavours. Here are the seven most common:

  1. Lowball / Highball
    • The most common tactic of all; making a ridiculously low or high offer to start the negotiation. Why do people do this?
      Anchoring is the mental bias we have to the first number we hear. Recall that both parties have a bargaining zone – a maximum and minimum they’re willing to accept. When someone makes an offer, intuitively this will be closer to their target point. Their bargaining zone will extend “some distance” from that. By setting the start of the ‘zone’ to an extreme, it can shift your mental perception of the mid-point where we might land. Thus by starting with a very low anchor, you might feel forced to try to “work your way up” from that. You are on the defensive and need to justify why it needs to move from this lowball point, and makes your own target seem unreasonable.
  2. Chicken
    • This is calling your bluff on your BATNA. They intend for you to “chicken out” and leave the negotiation with the status quo. Whilst a hardball tactic, it can be delivered in subtle ways. “We value the work you do, unfortunately the budget for this year is locked in and we simply can’t move on your salary. We’ll definitely review it next year.”
  3. Bogey
    • This is where one party plays up an issue of little importance to them, but meaningful to the other party. By “giving it up”, they then trade it for something they value. Perhaps they claim they really want you in the office, and letting you work from home is a justification to pay you less. Meanwhile, they don’t really mind if you WFH, since you’re such a hard worker.
  4. Aggressive Behaviour
    • This can manifest in many ways, from the overt to the subtle. When customers scoff at your best price, and insist you are ripping them off it’s a form of aggressive behaviour. Other examples include asking for a detailed breakdown of every single item in a quote, or using guilt to try to get you to back down (“I can’t believe after all we’ve done for you, you want to blackmail us.”).
  5. Ultimatums
    • This is a variation of ‘Chicken’, where an offer is made with a conditional time element or as a ‘one time deal’. You either take this deal or there is no deal. Essentially, calling your bluff that the deal offered is better than your BATNA, and you have to take it or lose it.
  6. Mud-Slinging
    • Mud Slinging is a form of aggressive behaviour that tries to reduce your BATNA. This works to give you less leverage over them.
  7. Good Cop / Bad Cop
    • We’ve all seen the movie where the bad cop tries to rough up the suspect, only for the good cop to come in and try to make a deal. The point is to encourage a deal to be struck with the nice guy, rather than have to deal with bad cop again. The same can happen in companies (or customers) with multiple layers of management.

How to deal with hardball tactics

You have at least four options to deal with these kind of hardball tactics. Let’s watch Sam divert his manager’s attempts to shutdown a salary negotiation.

1.Ignore

Manager: “We’ve reviewed all employees salaries and due to a really slow sales year, we only have the budget for a 1.2% increase.” (lowball)

Sam, ignoring that: “As per my earlier points, my target increase is 15% based on market rates and my history of going above and beyond.”

2. Identify & Discuss

Manager: “I can offer you 5%, but it’s a one-time deal. Take it or leave it.” (ultimatum)

Sam, identifying & discussing: “I see. You want to offer me an ultimatum. They can be effective when people don’t have any other options. I do have options, so I’d like to discuss my target increase of 15% with you.

3. Co-opt the other party (befriend them)

Manager: “You got an offer from that company? I heard they were a sinking ship. Careful of what you’re walking into there!” (mud-slinging)

Sam, befriending: “I always appreciated that as a boss you were a straight shoot boss. It’s why I wanted to deal with you on this negotiation. Let’s discuss the 15% I need.”

4. Respond in kind

Manager: “We both know you’re pretty happy here and the team respects you. Are you willing to lose everything you have for a small raise?” (chicken)

Sam, responding in kind: “Replacing me will be expensive in advertising and recruiter fees, not to mention the loss of momentum. Would you want to lose me over a small raise? (chicken)

Tip: Ask your friends and colleagues to come up with a bunch of hard-ball tactics and practice deflecting them. It will gamify the whole experience, and you might even enjoy the ‘game’ of negotiating whilst you’re playing. It’s nothing personal – it’s just business!

References

Ganegoda, D 2019, Class 3: Claiming Value (Distributive Bargaining), lecture notes, Negotiations, Melbourne Business School, delivered 2 March 2019

Leave a Comment