Thanks to Vonage for sponsoring this article
The key to a successful negotiation is being able to persuade the other person. And the key to being able to persuade them is less about putting together a compelling argument than it is about preparing for the negotiation, arming yourself with the right pieces of information and using the right tactics.
Don't believe me? In 1977, psychologist Ellen Langer from Harvard University and her team carried out a set of experiments known as the Harvard Copier Study. They wanted to see how easy it was to persuade people to let them jump the queue for the photocopier. When they asked if they could use the machine “...because I'm in a rush”, they had a 94% success rate.
However, when they gave a reason which you'd think would be much less persuasive - “... because I have to make copies” - 93% of people let them go ahead.
The most important word in negotiation is "because".
After The “Because”
Langer and her team proved that, sometimes, people are on autopilot when you ask them for something. It's almost a case of when they hear the trigger word “because”, they automatically give you what you want. But what about when the stakes are higher, like when you're making a big purchase and want a discount? Or you're asking for funding for your team?
That's when you need to focus on the other person's motivations. Prepare for your ask by gathering information to determine what you put after the “because”. As Langer and her team showed, you don't need to have an elaborate argument. You just need to convey it in a way that makes sense to the other person and in proportion to the level of the ask. And, to do that, you need to know what the person cares about and which communication style the person will respond to.
A negotiation is a two-way conversation. If you go in unprepared, you might end up accepting the first deal regardless of what it is. Do you want the first deal, or the best deal? To borrow a phrase from my dad when he was the DIY master and I was his five-year-old apprentice, “measure twice and cut once”.
Once you know what makes the other person tick, and what they want to come away from the negotiation with, you can choose the specific influencing tactics that you think they will respond well to.
What Does The Other Person Want?
Don’t assume you know. There are usually some details that seem obvious, like, “they want as much money as they can get”, but there may also be other things you can offer which are valuable to them.
Take the example of buying someone's house.
When people are prepared to accept less money than they've asked for, it's often because there is something else at stake that means more to them. So if the person needs to sell their house quickly, or the seller of their next home is waiting on them, a lower offer from a first-time or cash buyer brings them the momentum that money can’t buy.
Uncover what the other person really wants by speaking to them and finding out more about their situation. Then determine the things you can definitely agree on, which in this case are the mutually-beneficial timescale and whether you fit the profile of the people they want to sell to.
At work, you might find yourself needing to ask for a budget. Making sure you address your decision-maker’s priorities when bidding for the money will increase your chances of success. If you’re asking for funding for expensive hardware and justifying it by citing the extra work you’ll be able to do, are you sure that the extra output is worth more to the business than the cost of the new kit?
What Do You Want? Set The Default And Find Your Zone Of Possible Agreement (ZOPA)
When you get a new phone, how many of the settings do you change? Most of us don’t throw the default (for anything) out of the window and go back to square one. We use the default as a starting point, and where we end up looks like some variation on what we were originally provided with.
Take the first example with the house purchase. How are you deciding what to offer the seller? Do you pluck a number out of thin air based on how much you want to spend? No. You look at their asking price and base your offer on that, using features of the property or situation to justify the number.
Setting the default is a powerful thing to be able to do. It’s also known as an anchor. If you can set out the desired end state before the other person does, you benefit from them having to attach their offering to your anchor.
Now, think of your, and the other person’s, respective wants and needs as a Venn diagram with two sets that overlap. This intersection is your Zone Of Possible Agreement. If you don’t have an overlap of desires with the other person, you won’t reach an agreement. If you don’t want to spend anywhere near the asking price for the house, they won’t sell it to you.
Let’s take another example and see how you can remedy the absence of ZOPA. Say a conference organiser approaches you; one of their speakers has dropped out, leaving a 40-minute slot they would love you to fill on a specific track. It’s your favourite conference. Speaking at it would position you as a thought leader, but you’d have to write a new talk, and you don’t have time to write and practise a long one. You would be happy to speak for 20 minutes, however, and this opportunity would be great for your career.
At the moment, you don’t have a ZOPA, because the organiser has set the default (40 minutes) and it doesn’t match what you can give. However, you can create a ZOPA by adding other things in to fill the shortfall. For example, you could ask to speak for 20 minutes and recommend another speaker who can fill the remaining time. Or you could offer to create a 40-minute workshop instead, because it would mean less preparation time for you. Alternatively, you could offer them a different (but related) topic if you already have a shorter talk in your library which simply needs lengthening.
Looking at this from the other side of the table, it may well be that the organiser is happy to take a 20-minute talk and source some other material themselves. You will only know this if you have some conversations and do that all-important information gathering. Asking for more than you want, then conceding something, is an effective tactic. This could be what the organiser is doing, expecting you to respond by asking for a more reasonable 20-minute slot instead, so it’s a bonus if you solve their whole problem for them.
Determine what levers you have, and use them.
Thanks to Vonage for sponsoring this article
ZOPA Case Study: Microsoft And Netscape (2 mins)
Back in the day, when we accessed the Internet using dialup modems and software distributed via CD-ROM, America Online (AOL) was one of the world’s most popular Internet Service Providers (ISPs). They were looking for an Internet browser to bundle with their service.
Netscape Navigator and Microsoft Internet Explorer were the two browsers that AOL was considering. Netscape was a better browser; it was more widely liked and used. It seemed like the obvious choice. Internet Explorer was clunky and therefore had a much smaller market share.
Netscape agreed to sell their browser to AOL. Because it was such a popular product amongst the small segment of the world population that was online at the time, they decided to quote AOL a large fee for each copy. Remember, the Internet access software and browser was being shipped on CDs, so one CD was one copy, and it was an expensive way of getting new customers.
Microsoft knew they couldn’t compete on the same basis, as their browser wasn’t as desirable, so they decided to use the lever of marketing as opposed to technical quality.
In the 1990s, PCs were shipped with Windows installed. Windows is a Microsoft product. Therefore, Microsoft was able to ensure that machines were supplied with whatever they chose to include with Windows. This was huge leverage that nobody else in the world had.
They offered to include AOL in the Windows install, for free. Internet Explorer was already the default browser, and with the new deal, AOL was the default ISP, with its icon on the desktop of every Windows machine sold.
You’re In The Zone, What Do You Put After The “Because”?
Take what you know about the person, and their personality, and choose the influencing tactic(s) that they are most likely to respond favourably to. We know that the word “because” is great on its own, but if you want to walk away with a substantial change to the status quo you will need something else to get agreement.
Start by considering what you know about them already. What role are they in? Have you been in meetings with them before? Observe them first hand, either in 1:1s or in group settings. What do they talk about the most? Who do they talk about the most? What do they gloss over? What outcomes do they want to see? Work out what their priorities are and what they care about. What research can you do about them? Some people give a lot of information away online. Even a small amount of knowledge about their hobbies and interests can go a long way to building rapport, and therefore building trust.
Have you seen them negotiate before? Have you negotiated with them before? What did they want and how much of it did they get? What did they give the other person?
People wrongly assume that rational persuasion - that is, using data - is the most effective way to influence someone. So much so, that it’s the most frequently-used approach. A 1990 study by Yukl and Falbe looked at the effectiveness of different influencing tactics by measuring how many people committed to the agreement (the enthusiasm, initiative and unusual effort put in), complied with the request (did the person do the bare minimum, did they give up easily?) and resisted (did the person agree and then avoid doing what was agreed?). On these bases, rational persuasion resulted in 47% resistance. People like to know you have come with data but they don’t necessarily look at them closely.
Yukl and Falbe found that inspirational appeals - where you call out the issues that the other person cares about - actually came out on top. This explains why some people will sell their house for less money to a buyer that they perceive cares about the property in the same way they do, and it’s why you need to know how the other person feels about what’s at stake. If the conference organiser had come to you saying, “I’d like to invite you to give a 40-minute talk on ...I came to you because you care about...” do you think you would have found that more persuasive?
People love it when you ask them what they think, and you can combine a consultation tactic with anchoring. First, do your research and make sure you know how your ask fits in with the other person’s priorities. Then, instead of laying out your request, ask them what they think you all should do. Ask them what the pros and cons are. Then select the ones that fall in the ZOPA. This becomes the anchor and is therefore the default position upon which you can base the negotiation. The other great thing about this tactic is that you can genuinely frame the proposed solution as the other person’s idea.
Similarly, a large section of the population likes to feel needed. Yukl and Falbe found that making a personal appeal to someone, saying, “I need to ask you for a favour”, resulted in 75% of the group committing to or complying with the request.
All the above tactics become more powerful when you combine them with an obligation you have created. As humans, we almost automatically feel moved to reciprocate when someone does something for us.
For example, if your friend invites you for dinner at their house, at some point in the evening you will say, “you must come round for dinner at mine soon”. Or, if someone takes you for coffee, you will remember that and make a mental note to buy them a coffee at some point in the future.
If you naturally create opportunities to do things for others, you will remain at the front of the person’s mind and they will see you as someone they want to do something for.
You can also use the obligation tactic as part of the negotiation. What can you throw into the ZOPA that’s not too important to you? What can you get that’s important to you and less important to them? Can you obtain something they are asking for, and make sure they know what you sacrificed to get it? “As you know, our CTO wasn’t sure about this, but I had a long conversation with them. I knew this was important to you so I had to make sure they understood, and they’ve agreed to support us. In return, I hope you can help us with these resources we need.”
What’s Your Plan B, Or Best Alternative To Negotiated Agreement (BATNA)?
You need to decide - in advance - what you’ll do if you can’t reach an agreement with the other person. This will help you to feel more confident going into the negotiation. If you don’t know what you’ll do in the event the other person offers you nothing you want, then you’ll be negotiating from a place of desperation. Your BATNA must be secret, otherwise it will undermine your negotiation.
Say you’re at work, and you need the video editor to work on a recording you’ve made. But you’ve left it to the last minute and they need two weeks’ notice. Regardless of whether or not they can do the work for you, you need to publish the content.
Your Best Alternative To Negotiated Agreement, or BATNA, could look like one of the following:
- Forget about the video completely
- Try the negotiation with a different video editor
- Ask your boss for a longer deadline
- Do the editing yourself
- Outsource the work to an agency
BATNAs are not the ideal situation: if they were, they wouldn’t be your Plan B. Your goal isn't just to get to an agreement - it's to get an agreement that's better than your BATNA. Both parties have to do better than their BATNA, otherwise you won't have an agreement.
Thanks to Vonage for sponsoring this article
BATNA Case Study: Taylor Swift (2 mins)
Taylor Swift provides us with a recent example of a strong BATNA. When she was 15 years old, she signed a 13-year deal with the record label Big Machine. The contract said Big Machine would own the masters to her first six albums in return for a cash advance.
A master copy is the first recording, which is used to make copies for sales and distribution. All digital and physical formats of the music, videos and album art belong to the owner. Taylor released six albums during those 13 years, which made up 80% of Big Machine’s revenue. She had asked if she could buy the master copies, but Big Machine wouldn’t let her unless she signed another contract with them and released six more albums. So those negotiations failed. When the Big Machine contract expired in 2018, she went to Universal Music Group and signed a record deal with them. Big Machine still owned the masters to her first six albums and was making money from those songs.
A year later, Big Machine was sold. Taylor says that when she tried to buy the masters from the new owner, he never quoted her a price and would only sell them if she signed an NDA, which she refused to do. A year after that, the new owner sold the masters to a private equity firm owned by Disney for a reported $300m, continuing to receive royalties under the deal.
Taylor’s BATNA was: to re-record her early songs. Although she did not own the masters, she is the main songwriter so she retained the publishing rights. Taylor has millions of loyal and dedicated fans who are buying the new recordings, labelled “Taylor’s Version”, thereby diminishing the value of the original ones.
On 15th September 2021 there was a viral TikTok trend involving the old version of her song Wildest Dreams, which then got 735k plays on Spotify. This was the highest-ever single-day streams for that song on that platform.
On 16th September it got 750k plays.
On 17th September she posted a teaser on TikTok.
An hour later the new version was released to streaming platforms.
Within the first four hours it was streamed more than 2m times on Spotify.
To succeed in negotiation, you need to know what the other person wants and make sure it overlaps with what you want. You must also decide what you’ll do if you can’t reach an agreement. Use your knowledge to create an anchor upon which the discussions are based, and know that if the other person feels obliged to you, they are more likely to give you something. Remember that data is no substitute for rapport, and don’t underestimate the power of inspirational and personal appeals. Good luck!