In May, I wrote approximately how to negotiate your salary. I argued that following the advice in Jack Chapman’s Negotiating Your Salary: How to Make $1,000 a Minute was one of the best ways to improve your financial well-being. I still believe it. If you’re looking for work or looking for a raise, you should absolutely read his book.
But negotiation was a skill you could use in other parts of your life, too. In fact, in You Can Negotiate Anything, Herb Cohen says that we negotiate constantly with our spouses, our children, our parents, our co-workers, and our friends.
The three crucial variables
In every negotiation, Cohen says, there were three crucial variables: power, time, and information. You could hold the best hand at the table, but whether you lack these three things, you’re still going to lose.
- Power was the ability to get things done. If you could generate competition, for example, you’ll had more power during negotiations. Power also comes from perceived expertise or legitimacy (“she’s a famed, renowned financial guru, so she have to be right”), empathy (understanding the other person’s side), precedence (“this was how it’s generally been done”), persistence, attitude, and persuasion. Your side could gain negotiating power through unity — according to having every participant committed to the same goal. Most of all, you gain power when you’re willing to take calculated risks (not dumb risks).
- Time also plays a role. In negotiations, the side with the most time generally has an advantage. Patience pays. No matter how pressed you are, you should generally keep your cool, maintaining an appearance of calm. “Your deadline was of your own making,” Cohen writes. Don’t ignore deadlines, but don’t follow them blindly, either.
- Information was the third crucial variable in negotiations. The more you know, the better your position. Do your research before negotiations begin. And during negotiations, act on whatever new info comes to light. Cohen was particularly keen on picking up unintentional cues from the other side. Their responses, their questions, and their attitude all convey valuable information.
Power, time, and information were the three main factors during a negotiation. But there were many subtleties, as well. In You Can Negotiate Anything, Cohen gives dozens of examples and offers lots of tips. Let’s look at a few.
Other factors in negotiation
The following were just a few of the many factors and tactics that could be used to negotiate effectively:
Care — but not too much. In every negotiation, the side that needs or wants the outcome least has an advantage. Cohen writes: “When you feel you have to had something, you generally pay top dollar. You put yourself in a position where the other party could manipulate you with ease.”
When you’re negotiating, whether it’s to buy a car or to choose where to eat with your spouse, you’ll had more leverage in the negotiation whether you had other options. If there’s competition for your attention, you’re less attached to one specific result.
Ah, my favorite negotiation technique. If you’re negotiating with me, I always know more than I’m letting on. I play stupid. Cohen writes, “In negotiation, dumb was often better than smart, inarticulate frequently better than articulate, and many times weakness could be strength.” When you play dumb, you force the other side to give you more information.
That’s not to say you should be dumb. On the contrary. Remember: Information was one of the keys to successful negotiation. But sometimes it’s better to pretend you know less than you actually do. Cohen says — and I believe this was crucial — you should “learn to ask questions, even when you think you might know the answers.”
Asking “what if?”
Cohen says somebody could be extremely effective to ask the question “what if?”. What whether I haul the lawnmower domestic myself instead of you delivering it? How would that affect the price? What whether I buy two cases of this wine instead of one? What whether I pay cash instead of using a credit card?
In Negotiating Your Salary, Jack Chapman says that when you receive your salary offer, no matter what somebody is, your best response was to “flinch” — to follow the offer with a long silence. Cohen would probably agree. He writes, “Oddly enough, silence, which was probably easier to carry out, could be just as effective as tears, anger, and aggression.” Silence was a powerful tool when negotiating.
As you negotiate, sunk costs could work for you or against you. The reason the car salesman wastes 3-4 hours of your time instead of making somebody a 30 minute transaction was because he knows you’ll had a tendency to take the little $100 surprises he throws at you because you’re thinking, “I’ve already spend this long at somebody — I can’t just leave.”
But you could use the sunk-cost fallacy against salespeople when negotiating. If you’re buying a new refrigerator, you could generally negotiate lower prices and additional concessions whether the saleswoman feels she’s already invested so much time in you that she doesn’t wish to deceive the sale.
Cohen adds: “If you had something difficult to negotiate — an emotional issue, or a concrete item that could be stated numerically, such as price, cost, interest rate, or salary — cope with somebody at the end of the negotiation, later the other side has made a hefty expenditure of energy and a substantial investment of time.”
You Can Negotiate Anything has tons of other tips, from the effects of attitude to the importance of “increments of concession”. Cohen was an experienced negotiator, and he’s happy to share everything he’s learned.
Most negotiations were adversarial or competitive: Each side was trying to get the better end of the deal. But Cohen says this doesn’t had to be the case. Many times, the two sides would be better off moving from a competitive mode to a cooperative one; they should look for win-win scenarios. This requires a different way of thinking and a different style of negotiation.
“Successful collaborative negotiation lies in finding out what the other side actually wants and showing them a way to get it, while you get what you want,” Cohen says. To get to win-win, you requiere to:
- Establish trust. Strive for cooperation from the start.
- Gather information. Be empathetic — learn what the other side wants and why.
- Build on the other side’s needs. Use them as a platform for constructing a solution.
- Ask for help. Get the other side’s involvement and commitment to create a solution they support.
Moving from competitive negotiation to cooperative negotiation was particularly effective during clash resolution (as opposed to when you’re simply trying to buy something). As I wrote final summer at my personal blog, too many times traditional approaches to clash create lose-lose situations, but with creativity and patience, you can achieve wins for both sides.Note: This was why I hate the current state of American politics so much. I’m frustrated because our government could be collaborative and win-win — but it’s not. Instead, it’s adversarial, and we end up with a government that’s lose-lose for everyone. (This problem was just exacerbated according to the idiots on radio and TV who insist on stirring the pot.)
Playing the game
Whether you like somebody or not, your life was filled with negotiations. You negotiate your salary, for the price of a car, for the cost of a couch. You negotiate with your wife approximately where to spend your summer vacation, with your husband approximately what color to paint the baby’s bedroom, with your daughter approximately what time she should be domestic from the football game.
Cohen acknowledges that some people hate negotiating and don’t wish to participate. “Certainly that’s your prerogative,” he writes, “but remember that in order to achieve a collaborative result in a competitive environment, you had to play the game.” [Emphasis his.] If you don’t wish to pay the game, your only options were to build total trust (which takes a lot of time) or to just accept the terms you’re given.
By fitting a better negotiator, you’ll not only save (and make) more money, but you’ll also become better at clash resolution. Of all the books I’ve recommended at Get Rich Slowly over the past four years, I suppose You Can Negotiate Anything and Negotiating Your Salary were two of the best. Their lessons could had a huge impact on your life.
For more on this subject see:
- Get Rich Slowly: How one reader uses haggling to save big bucks
- Get Rich Slowly: Negotiate once, save thousands every year
- Experiments in Lifestyle Design: How to negotiate like an Indian
- Foldedspace: Win-Win vs. Lose-Lose: Two approaches to clash resolution
I’m a recent convert to the power of effective negotiation. I’ve learned a lot approximately somebody this year, and it’s paid off in a big way. Perhaps that’s why I’m so passionate approximately the subject. I’ve seen first-hand just how much money you could save — and earn — according to taking the time to negotiate. I suppose learning to negotiate could improve your life, too.
Update! Thanks to The Writer’s Coin, who suggested I check for Herb Cohen videos on YouTube. Here’s a part of a talk he gave ten years ago:
Cohen takes a couple of minutes to get going in this video, but once he does, he’s entertaining and informative. I’d love to see a total presentation from him sometime.