1. Tune Up Your Negotiation Skills
Tactics and Strategies
Andrew L. Urich, J.D.
Puterbaugh Professor of
Ethics & Legal Studies
Spears School of Business
Oklahoma State University
405.744.8619
aurich@okstate.edu
www.andrewurich.com
2. Making a Connection
The World’s Greatest Car Salesman
• We like, trust, and believe people who like us.
3. Making a Connection
Overcoming Fear
Nikita Khrushchev
My Sales Philosophy
“When you are skinning your customers,
you should leave some skin on,
to grow again
so you can skin them again.”
6. Making a Connection
Small Software Co. vs. Massive
Industrial Powerhouse, Inc.
“This product is provided subject to an
evaluation condition. In the event that the
software is deemed unacceptable by the
buyer for any reason, at the sole discretion
of the buyer, the buyer shall incur no
obligation to make the final payment as
described in the above payment schedule.”
7. Program Introduction & Goals
What We Need To Know
Strategies focus on what makes things
happen. They help bring about desired
outcomes as a result of particular actions.
Tactics are processes and techniques you
implement to:
Get more.
Pay less.
Reach agreement more quickly.
Maintain a positive relationship.
8. Program Introduction & Goals
What We Need To Know
1. What is the essence of negotiation?
(Not what everyone seems to think)
2. Which negotiation variable has the highest
correlation with “winning” negotiations?
3. How do I plan for a negotiation?
9. Program Introduction & Goals
What We Need To Know
4. How can I adopt a win/win (more/more)
focus without becoming Pollyanna?
5. Appreciate the vital importance of “no.”
6. How can I increase my bargaining power?
10. Exercise
Negotiation of a Movie Contract
On a scale of 1 to 10 please note your
satisfaction level when you finish
1 = dissatisfied 10 = extremely happy
1 5 10
dissatisfied extremely
happy
12. Change Your “Mental Model” of Negotiation
Have you ever heard anyone say this?
“Negotiation is an inefficient waste
of time. Can’t we quit messing
around and get to the bottom
line?”
•Saturn
•Winner’s curse
•The box or the curtain
13. Change Your “Mental Model” of Negotiation
Change Your “Mental Model”
• Completely new focus: It's the experience,
not the terms, that will provide satisfaction
to the other party.
• Don't look at negotiation as a necessary
evil.
A) It's an opportunity to discover their
bottom line.
B) And an opportunity to demonstrate
the FAIRNESS of your position.
14. Change Your “Mental Model” of Negotiation
Which provides more satisfaction?
A) a bad deal mistakenly considered to be
a good deal.
B) a good deal mistakenly considered to be
a bad deal.
15. Program Introduction & Goals
What Does it Mean to “Win?”
The Bargaining Area
$200,000 $215,000 $235,000 $250,000
Buyer
Seller
Bargaining
Area
16. What matters most?
Which of these factors are most highly correlated
with successful negotiation outcomes?
• Bargaining power
• Aspiration level
• Skill of the negotiator
17. High Aspirations
Research on Aspiration Level
• High aspirants beat low aspirants without
regard to skill or power.
• Skilled negotiators without power lowered
their aspirations.
18. High Aspirations
Power of High Aspirations
• Reciprocity and Anchoring
• Boy Scout circus
• Giant teddy bear
• Barbeque restaurant
• Analysis that does not improve decision making
tends to be a waste
• Wife’s shoes
• Selling up harder than selling down
• Pick your clothes dryer
• You will not exceed your aspiration.
• First offer makes a huge impact.
• Who should make the first offer?
19. High Aspirations
Factors Restraining High Aspirations
• Fear of offending
• Time constraints
• Fear of failure: A culture averse to failure
stifles exploration, experimentation and
discovery
• It’s more work
20. Win/win
Make the Pie Bigger
Instead of Arguing About How to Slice It
• Win/win is an attitude. (Fixed Pie Fallacy)
• 62% buy into the fixed pie fallacy.
• Pay close attention to their concerns.
• Increase their “value.” Make it easier for
them to buy from you.
• Reduce their opportunity cost (because if they deal
with you they aren’t dealing with someone else)
• Use creativity, diligence and enthusiasm to
identify new options – Stephen Covey’s
“Third Alternative.”
22. Win/Win
Listen First
• Are you projecting?--Listen for something
unexpected.
• “They” know everything you want to know.
• Listen for opportunities to make the pie bigger?
• Identify their problems before you sell a solution.
• Take notes.
• Listen twice as much as speaking.
23. Analyze Your Level of Satisfaction
How Do You Know When to be Satisfied?
• Are your criteria arbitrary?
• Remember, you never get to see the bargaining
area.
• Our satisfaction level is based on…..
1. Our expectation
2. How we were treated during the negotiation
• Are you impacted by how far you moved from
their starting point?
• Are you impacted by their pain?
24. The Power of “No”
“NO” Induces Trauma
• Develop a positive “NO.”
• Being ready, willing, and able to say “no”
gives you power.
• Knowing when to say “no” gives you power.
• Setting Priorities: Risk-adjusted present value
of opportunities relative to resources consumed
(such as scarce talent or capital)
25. The Power of “No”
A lot of problems are caused by people who say
“yes” when they should say “no.”
• Southwest Airlines: The King of “No!”
• No food
• No choice of planes
• No assigned seats
• No extra baggage
• No first class
• No shared reservation system
• No expensive equipment
• Why we need a Sales Manager
• Failure to say “no” leads to disaster
26. The Power of “No”
Concept Summary
1. “No” is the key to success.
2. Practice your “no!”
3. Slow down
1. Hmmmm….
4. Focus on the relationship not the terms.
1. Manage emotions
2. Show respect
5. Manage their response to your “no.”
1. Fear
2. Guilt
6. You don’t want to win them all.
27. Evaluating and Building Bargaining Power
Understanding Bargaining Power
• Don’t underestimate your power.
• Don’t dwell on your weaknesses.
• The illusion of power
• The power of competition
• The power of legitimacy
29. Landlord - Tenant Exercise
Paving the Parking Lot and Utilities
• Landlord Paving the Parking Lot:
• You pay 0 Win/Win
• Split it 50/50 2000
• Tenant pays 5000 Landlord Paving 5000
Utilities 0
• Tenant Paving the Parking Lot:
• You pay 0 Tenant Paving 0
• Split it 50/50 1000 ________Utilities 5000_____
Total 10000
• Landlord pays 2000
• Landlord Paying Utilities
• You pay 0 Split it
• Split it 50/50 1000
Landlord Paving 2000
• Tenant pays 2000
Utilities 1000
• Tenant Paying Utilities Tenant Paving 1000
• You pay 0 ________Utilities 2000_____
• Split it 50/50 2000 Total 6000
• Landlord pays 5000
30. Landlord - Tenant Exercise
Exercise Summary
• Win/Win Paving and Utilities
• Who made the first offer? High Aspirations?
• You both wanted the same thing
• Listening advantage
• Satisfaction trap
• Anyone leave pie in the plate?
• Fairness? Trouble saying no?
• Any lapses in trust?
32. References
• Ailes, Roger. You Are the Message. New York. Doubleday, 1988.
• Bazerman, Max H. Smart Money Decisions, Wiley & Sons, 1999
• Cialdini, Robert B. Influence: The Psychology of Persuasion, Harper Collins, 2007
• Cohen, Herb. You Can Negotiate Anything. Secaucus, N.J.: Lyle Stuart, 1980
• Covey, Stephen R. The 7 Habits of Highly Effective People. New York: Simon &
Schuster, 1989.
• Dayton, Doug. Selling Microsoft. Holbrook, MA., Adams Media Corporation, 1997.
• Fisher, Roger and William Ury. Getting to Yes. New York: Viking Penguin, Inc.,
1981.
• Forsyth, Patrick. The Negotiator's Pocketbook. London: Alresford Press Ltd., 1993.
• Johnson, Spencer. The One Minute Sales Person. William Morrow, N.Y, 1984.
• Karrass, Chester L. Give and Take. New York: Harper Collins, 1993.
• Karrass, Chester L. The Negotiating Game. New York: Harper Collins, 1992.
• Koch, Charles G., The Science of Success, Wiley & Sons, 2007.
• Kozicki, Stephen. The Creative Negotiator. Pyrmont, Australia: Gower, 1993.
• Lewicki, Roy J., et.al. Negotiation. 2nd Edition., Irwin, 1994.
• Lewicki, Roy J., et. Al. Essential of Negotiation, 4th Ed. McGraw Hill, 2007
• Nierenberg, Gerald 1. The Art of Negotiating. New York: Barnes & Noble, 1995.
• Paul, Richard. Critical Thinking. Santa Rosa, CA: Foundation for Critical Thinking,
1993.
• Schoonmaker, Alan N. Negotiate to Win: Gaining the Psychological Edge.
Englewood Cliffs, N.J.: Prentice Hall, 1989.
