Bargaining: the tactics of talk

PUBLISHED : Monday, 24 September, 2012, 12:00am
UPDATED : Sunday, 23 September, 2012, 11:58pm

"Nothing is fair in life. You get what you negotiate," says Chris Atkins, Asia-Pacific partner of The Gap Partnership, which does negotiation training.

Knowing the right moves at the bargaining table can help you save money in everyday situations and lead to professional success. Skilled tactics can help you bargain for a pay rise or rent cut, or the dozens of other scenarios people encounter daily that involve negotiation.

Be prepared. "Information is power," says Stephen Nason, a professor of business practices at the Hong Kong University of Science and Technology.

Atkins adds: "It's like a game of chess. The key is understanding what's important to the other party. We call it getting inside their head. The more you understand about your opponent, the easier it is to predict how they will behave. Those who fail to plan tend to be the most reactive at the negotiating table and less likely to think on their feet."

Begin by gathering background information on the other party. Find out what issues they wish to settle. What are their deadlines? What's of value to them? What are their areas of concern?

Then determine your objectives and your stance on each issue. What can you bring into the negotiation? If you decide to adjust your position, how far are you prepared to move?

One of the first mistakes people make when entering negotiations is naming their price too early. According to experts, you should avoid putting down the first "marker" or making the first offer. For example, if you are negotiating for a salary increase with your boss, says Bob McConnochie, a trainer at Negotiation Resource International, "Try to get him to make an offer before you say what you expect. You might be pleasantly surprised."

"The other rule is that if you put a marker down, never put two in a row," says McConnochie. "If your boss, says to you: 'I could consider an increase of HK$5,000 a month,' and you say: 'That's very disappointing,' the boss shouldn't move until he gets a response from you on how much you were expecting." Don't make any assumptions about what the other party is willing to accept. Wait for their reply before you consider moving from your initial position.

One common mistake in negotiation is failing to determine what you want. "Most people ... just negotiate over money, money, money. Yet it often turns out there are other things just as important or more so," says Nason.

When negotiating your salary, for example, don't get stuck on the figures. You may be able to strike a deal where a starting bonus, location, housing allowance or medical benefits add value.

"Many people assume that negotiations will involve conflict, that it is a zero-sum game, but that is actually relatively rare," says Nason. "Most negotiations have an opportunity for both sides to increase their value." This is often termed the "win-win" approach.

Similar to the salary example above, it's important to be creative and think outside the deal. Atkins gives the example of a factory owner. "His main performance indicator might be volume. For him, that has extremely high value." Yet the customer's priority might be a discount. "The factory owner may be prepared to give the customer a discount if he can trade it for more volume." If the customer agrees, both parties come away winners.

When negotiating, try to trade something that costs little to you but is valuable to the other party. This is especially useful for long-term relationships. By contrast, if you are involved in a one-time transaction such as buying a car, you can resort to hard bargaining where only one party wins.

"The social niceties are less important here," says Atkins. "You can almost afford to be cold."

Negotiation novices commonly believe that you must be tough and refuse to budge. "Some of the worst negotiators I've ever seen are tough," says Nason. The ability to adjust your position is essential.

One strategy is to "open extreme" or ask for more than you hope to get. While Atkins encourages this approach, he says it doesn't make sense to remain fixed to force the other party to give in. "Satisfaction comes from moving together, so the other party can feel they've achieved something," he says.