One of the cardinal rules of Power Negotiating is that you should ask the other side for more than you expect to get. Henry Kissinger went so far as to say, "Effectiveness at the conference table depends upon overstating one's demands."
Think of some reasons why
you should do this:
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Why should
you ask the store for a bigger discount than you think you have a chance of
getting?
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Why should
you ask your boss for an executive suite although you think you'll be lucky to
get a private office?
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If you're
applying for a job, why should you ask for more money and benefits than you
think they'll give you?
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If you're
dissatisfied with a meal in a restaurant, why should you ask the captain to
cancel the entire bill, even though you think they will take off only the charge
for the offending item?
If you're a salesperson:
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Why, if
you are convinced that the buyer wants to spread the business around, should you
still ask for it all?
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Why should
you ask for full list price even if you know it's higher than the buyer is
paying now?
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Why should
you ask the other person to invest in the top of the line even when you're
convinced they're so budget conscious that they'll never spend that much?
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Why should
you assume that they'd want to buy your extended service warranty even though
you know they've never done that in the past?
If you thought about this,
you probably came up with a few good reasons to ask for more than you expect to
get. The obvious answer is that it gives you some negotiating room. If you're
selling, you can always come down, but you can never go up on price. If you're
buying, you can always go up, but you can never come down. What you should be
asking for is your MPP-your maximum plausible position. This is the most that
you can ask for and still have the other side see some plausibility in your
position.
The less you know about
the other side, the higher your initial position should be, for two reasons:
1. You may be off in your assumptions. If you don't know the other person
or his needs well, he may be willing to pay more than you think. If he's
selling, he may be willing to take far less than you think.
2. If this is a new relationship, you will appear much more cooperative
if you're able to make larger concessions. The better you know the other person
and his needs, the more you can modify your position. Conversely, if the other
side doesn't know you, their initial demands may be more outrageous.
If you're asking for far
more than your maximum plausible position, imply some flexibility. If your
initial position seems outrageous to the other person and your attitude is
"take it or leave it," you may not even get the negotiations started.
The other person's response may simply be, "Then we don't have anything to
talk about." You can get away with an outrageous opening position if you
imply some flexibility.
If you're buying real estate directly from the seller, you might say, "I
realize that you're asking $200,000 for the property and based on everything you
know that may seem like a fair price to you. So perhaps you know something that
I don't know, but based on all the research that I've done, it seems to me that
we should be talking something closer to $160,000."
At that the seller may be
thinking, "That's ridiculous. I'll never sell it for that, but he does seem
to be sincere, so what do I have to lose if I spend some time negotiating with
him, just to see how high I can get him to go?"
If you're a salesperson you might say to the buyer, "We may be able to
modify this position once we know your needs more precisely, but based on what
we know so far about the quantities you'd be ordering, the quality of the
packaging and not needing just-in-time inventory, our best price would be in the
region of $2.25 per widget." At that the other person will probably be
thinking, "That's outrageous, but there does seem to be some flexibility
there, so I think I'll invest some time negotiating with her and see how low I
can get her to go."
Unless you're already an experienced negotiator, here's the problem you will
have with this. Your real MPP is probably much higher than you think it is. We
all fear being ridiculed by the other. So, we're all reluctant to take a
position that will cause the other person to laugh at us or put us down. Because
of this intimidation, you will probably feel like modifying your MPP to the
point where you're asking for less than the maximum amount that the other person
would think is plausible.
Another reason for asking for more than you expect to get will be obvious to you
if you're a positive thinker: You might just get it. You don't know how the
universe is aligned that day. Perhaps your patron saint is leaning over a cloud
looking down at you and thinking, "Wow, look at that nice person. She's
been working so hard for so long now, let's just give her a break." So you
might just get what you ask for and the only way you'll find out is to ask for
it.
In addition, asking for more than you expect to get increases the perceived
value of what you are offering. If you're applying for a job and asking for more
money than you expect to get, you implant in the personnel director's mind the
thought that you are worth that much. If you're selling a car and asking for
more than you expect to get, it positions the buyer into believing that the car
is worth more.
Another advantage of asking for more than you expect to get is that it prevents
the negotiation from deadlocking. Take a look at the Persian Gulf War. What were
we asking Saddam Hussein to do? (Perhaps asking is not exactly the right word.)
President George Bush, in his state of the Union address used a beautiful piece
of alliteration, probably written by Peggy Noonan, to describe our opening
negotiating position. He said, "I'm not bragging, I'm not bluffing and I'm
not bullying. There are three things this man has to do. He has to get out of
Kuwait. He has to restore the legitimate government of Kuwait (don't do what the
Soviets did in Afghanistan and install a puppet government). And he has to make
reparations for the damage that he's done." That was a very clear and
precise opening negotiating position. The problem was that this was also our
bottom line. It was also the least for which we were prepared to settle. No
wonder the situation deadlocked. It had to deadlock because we didn't give
Saddam Hussein room to have a win.
If we'd have said, "Okay. We want you and all your cronies exiled. We want
a non-Arab neutral government installed in Baghdad. We want United Nations
supervision of the removal of all military equipment. In addition, we want you
out of Kuwait, the legitimate Kuwaiti government restored and reparation for the
damages that you did." Then we could have gotten what we wanted and still
given Saddam Hussein a win.
I know what you're thinking. You're thinking, "Roger, Saddam Hussein was
not on my Christmas card list last year. He's not the kind of guy I want to give
a win to." I agree with that. However, it creates a problem in negotiation.
It creates deadlocks.
From the Persian Gulf scenario, you could draw one of two conclusions. The first
(and this is what Ross Perot might say) is that our State Department negotiators
are complete, blithering idiots. What's the second possibility? Right. That this
was a situation where we wanted to create a deadlock, because it served our
purpose. We had absolutely no intention of settling for just the three things
that George Bush demanded in his state of the Union address. General Schwarzkopf
in his biography It Doesn't Take a Hero said, "The minute we got
there, we understood that anything less than a military victory was a defeat for
the United States." We couldn't let Saddam Hussein pull 600,000 troops back
across the border, leaving us wondering when he would choose to do it again. We
had to have a reason to go in and take care of him militarily.
So, that was a situation where it served our purpose to create a deadlock. What
concerns me is that when you're involved in a negotiation, you are inadvertently
creating deadlocks, because you don't have the courage to ask for more than you
expect to get.
A final reason-and it's the reason Power Negotiators say that you should ask for
more than you expect to get-is that it's the only way you can create a climate
where the other person feels that he or she won. If you go in with your best
offer up front, there's no way that you can negotiate with the other side and
leave them feeling that they won.
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These are
the inexperienced negotiators always wanting to start with their best offer.
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This is
the job applicant who is thinking, "This is a tight job market and if I ask
for too much money, they won't even consider me."
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This is
the person who's selling a house or a car and thinking, "If I ask too much,
they'll just laugh at me."
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This is
the salesperson who is saying to her sales manager, "I'm going out on this
big proposal today, and I know that it's going to be competitive. I know that
they're getting bids from people all over town. Let me cut the price up front or
we won't stand a chance of getting the order."
Power Negotiators know the
value of asking for more than you expect to get. It's the only way that you can
create a climate in which the other side feels that he or she won.
Let's recap the five
reasons for asking for more than you expect to get:
1. You might just get it.
2. It gives you some negotiating room.
3. It raises the perceived value of what you're offering.
4. It prevents the negotiation from deadlocking.
5. It creates a climate in which the other side feels that he or she won.
In highly publicized
negotiations, such as when the football players or airline pilots go on strike,
the initial demands that both sides make are absolutely outlandish. I remember
being involved in a union negotiation where the initial demands were
unbelievably outrageous. The union's demand was to triple the employees' wages.
The company's opening was to make it an open shop-in other words, a voluntary
union that would effectively destroy the union's power at that location. Power
Negotiators know that the initial demands in these types of negotiations are
always extreme, however, so they don't let it bother them.
Power Negotiators know that
as the negotiations progress, they will work their way toward the middle where
they will find a solution that both sides can accept. Then they can both call a
press conference and announce that they won in the negotiations.
An attorney friend of mine,
John Broadfoot from Amarillo, Texas, tested this theory for me. He was
representing a buyer of a piece of real estate, and even though he had a good
deal worked out, he thought, "I'll see how Roger's rule of 'Asking for More
Than You Expect to Get,' works." So, he dreamt up 23 paragraphs of requests
to make of the seller. Some of them were absolutely ridiculous. He felt sure
that at least half of them would be thrown out right away. To his amazement, he
found that the seller of the property took strong objection to only one of the
sentences in one of the paragraphs.
Even then John, as I had
taught him, didn't give in right away. He held out for a couple of days before
he finally and reluctantly conceded. Although he had given away only one
sentence in 23 paragraphs of requests, the seller still felt that he had won in
the negotiation. So always leave some room to let the other person have a win.
Power Negotiators always ask for more than they expect to get.
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