Negotiation Fundamentals: How To Negotiate Effectively | Alex Kouramanis | Skillshare

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Negotiation Fundamentals: How To Negotiate Effectively

teacher avatar Alex Kouramanis, Real Estate Investor & Online Educator

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Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Lessons in This Class

38 Lessons (1h 24m)
    • 1. Negotiation Fundamentals PROMO

      0:58
    • 2. 01 Introduction To The Course

      2:39
    • 3. 02 Why Negotiation Matters

      1:42
    • 4. 03 Section 1 Exercise

      0:33
    • 5. 04 What Is Negotiation

      3:21
    • 6. 05 Human Cognition & Cognitive Bias

      3:42
    • 7. 06 Section 2 Exercise

      0:21
    • 8. 07 The Perception Of Options

      1:43
    • 9. 08 Time Pressure

      3:40
    • 10. 09 Financial Pressure

      2:37
    • 11. 10 Information Pressure

      2:11
    • 12. 11 Psychological Pressure

      3:26
    • 13. 12 Influence, Not Manipulation

      2:06
    • 14. 13 Section 3 Exercise

      0:38
    • 15. 14 Diplomatic Style

      4:11
    • 16. 15 Dictator Style

      4:54
    • 17. 16 Ben Franklin Style

      3:09
    • 18. 17 Kamikaze Style

      3:59
    • 19. 18 Henry Clay Style

      3:40
    • 20. 19 The Importance Of Win Win

      2:58
    • 21. 20 Section 4 Exercise

      0:28
    • 22. 21 Negotiation Gambits

      1:21
    • 23. 22 Always Ask For More Than You Expect To get

      3:49
    • 24. 23 Bracketing & The Silent Close

      2:23
    • 25. 24 Reluctant Buyer

      1:04
    • 26. 25 Section 5 Exercise

      1:09
    • 27. 26 Let Me Talk To The Manager

      2:13
    • 28. 27 Challenging A Bluff

      0:55
    • 29. 28 Tit For Tat

      0:59
    • 30. 29 Section 6 Exercise

      0:32
    • 31. 30 Good Cop, Bad Cop

      3:53
    • 32. 31 Nibbling

      1:45
    • 33. 32 Winning Gambit

      1:33
    • 34. 33 Section 7 Exercise

      0:17
    • 35. 34 Negotiation Is A Skill

      1:40
    • 36. 35 PDCA Model Of Development

      2:51
    • 37. 36 Build Momentum & Stay Motivated

      1:33
    • 38. 37 Conclusion A Short Story

      2:41
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About This Class

The ability to create agreement through negotiation is the number one skill in business. Whether you are dealing in million dollar transactions or simply winning others over to your way of thinking, Negotiation Fundamentals: How To Negotiate Effectively is the course that positions you to achieve outstanding results where others fail. This course takes you through the human cognitive processes that lead us to make decisions, the various styles of negotiation and the complete negotiation process that turns duds into deals.

What Will I Learn?

  • The human cognitive processes that lead to decision making
  • How to achieve power in negotiations
  • How to identify and use negotiation pressure points
  • The various negotiation styles you will encounter and how to handle them
  • The principles and techniques of negotiation
  • How to help your opponent feel like they’ve won, while you win too!

Negotiation can be a scary, high-stakes process. You simply cannot afford to leave it to guess work or old habits. Instead, you need a system for engaging with your negotiation opponents, backed by the current science of human cognition. This is what you will gain with this course.

Create a whole future of opportunities and join us in Negotiation Fundamentals: How To Negotiate Effectively today! 

Meet Your Teacher

Teacher Profile Image

Alex Kouramanis

Real Estate Investor & Online Educator

Teacher

I am a full time real estate investor from Toronto, Ontario Canada, with a B.A. Honours Double Major in Cognitive Science & Philosophy, w/ distinction. My specialization in real estate includes negotiation, wholesale, buy & hold, fix & flip and lease option strategies. In addition to real estate, I am an online educator. Subjects include investment, finance, relationships, personal development, psychology, philosophy and so much more!

My passion is creating wonderful opportunities and building great relationships in the process.

If you would like access to current, daily information that you can use to make positive changes in your life, follow my blog 'Make Known' on Facebook.

See full profile

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Transcripts

1. Negotiation Fundamentals PROMO: hello and welcome to negotiation Fundamentals were discovered in the business world is that people make decisions emotionally. I see what goes on in a negotiation and how we reach agreement not by driving logic but by leading people with vision. For as long as I can remember, I have just been truly fascinated by people, how they think, what they think and why they do what they do. So fascinated that I took six years of my life to go through academic study, I took a carton of science and Philosophy program university and later turned around and used that in my career as a real estate investor. In this course, we're gonna go over power and control negotiations, how to effectively negotiate to create win win scenarios without giving up what you really want. Emotionally driven thinking and how that influence the decision making and much, much more. I want to thank you for checking this course up, Hope to see in there 2. 01 Introduction To The Course: Hello. Thanks for enrolling and welcome to the program. My name is Alex Cora Manus. For as long as I can remember, I have been fascinated by people how they think, what they think, why they think the way that they do. I was so fascinated, in fact, that I dedicated six years of my life to academic study in the College of Science and Philosophy program in university. My education turned out to be an advantage for me, and my pursuit is a real estate investor. As a student, I was able to understand how I think and how others think. And as a business owner, I'm able to see what really goes on when two parties try to reach agreement. Is this understanding that turned average deals into great ones? While there have been countless lessons along my journey, the overarching theme again and again is that we human beings are bad at making decisions. We are not routinely logic driven thinkers. In fact, for most of our day to day exploits, we are emotionally driven thinkers. This is a little troubling since it's our decisions are choices that lead to our results in life. If we can't make decisions logically. If we're making them emotionally, then the question is what is in control of our decision making? Well, it turns out that it's a combination of our intuitions habits and emotions and environmental features along with other people's emotions. And if they know how to engage this emotionally, you better believe that they know how to control the situation and help us make decisions by having an extensive understanding of human cognition. And by implementing this knowledge in my negotiations as an investor, I've developed a program that goes beyond the techniques and principles of negotiation, to give you a real understanding of why certain moves pay off and others failed big time. What you have here is a step by step guide. You could leverage in the negotiations and in all avenues of your life for years to come to see great success. Negotiation is a high stakes skill. By the end of the program, you'll understand how to effectively negotiate for win win scenarios without compromising and giving away anything that you really want. I will show you how to obtain power negotiations, take you through the different negotiations styles, introduced the principles and techniques and then fortify understanding with an understanding of human cognition and how emotion influences decision making. At the end of each section, we will provide you with training exercises that you can be prepared before you go out and engage in your negotiations. As you work through the course, you'll begin to see the importance of practice, and these exercises are gonna help you along. I want to thank you again for enrolling. Let's dive in. 3. 02 Why Negotiation Matters: negotiations are going on all of the time. We negotiate on inconsequential things every day, like what to eat for dinner with your spouse or on more important things, such as the terms or interest rate on a mortgage with your banker. We even negotiate with ourselves. Have you ever tried to wake up early? But you just didn't have a good enough reason. You may have woken up and then had the thought. Well, I'm awake, but what's another five minutes? Only to conveniently forget to set an alarm and then drift back to sleep. It takes riel effort to control that inner voice and toe. Make sure that we reach the agreements that we're looking for our day to day negotiations. That's why negotiation is so important. It's everywhere all the time, even though we have constant exposure to negotiation. In our day to day lives were not de facto strong negotiators. What might work well for you with a vendor and a flea market, it doesn't necessarily translate when you're trying to put together a nice big deal with a very important client. Negotiation is a skill. It takes practice. It takes persistence. But over time you will become more and more proficient with it. Important thing to remember is that negotiation is not a game of domination. Negotiation is about agreement. Let me say that again. Negotiation is about agreement. When you're at the negotiating table, you're trying to work out a resolution. You cannot force the other person to your way of seeing things. You have to get them toe work with you to agree with you on an emotional level, not in the reason based level. This is very important to remember, because thousands of dollars could be lost or gained within a matter of seconds, just by using certain phrase certain types of words or a certain tone. As negotiation is such a high stakes game, we prepared with steps, principles and techniques that you'll need to use within any negotiation to reach a win win . 4. 03 Section 1 Exercise: no for a little exercise, which is in two parts, this would be attached in the form of a pdf. The first is reflect on a time where your words impacted a situation either positively, negatively or neutrally. Did you get the desired goal that you had in mind when you started that discussion? Why are why not? The second part is reflect on a time where someone tried to control or compel you. And did you give them what they wanted? Why or why not? 5. 04 What Is Negotiation: Welcome to Section two. Let's begin with the first lesson, which is what is the definition of negotiation? A little bit about human cognition. So first of all, in my philosophical days, I picked up the habit of trying to declare a concept before I argue for it. So defining negotiation negotiation is an exchange between two or more parties aimed at creating agreement with all parties having the right to refuse the propositions presented. The first part seems obvious in exchange between two or more parties aimed at creating agreement in a negotiation. There's two different sides they each have with the other wants, so agreement is inherent in the negotiation. The only time disagreement happens is when one or both parties get below their minimum plausible position there. MPP. And this is a concept that will impact a little bit later on. Of course, the second part is with all parties having the equal right to reject the propositions presented. Now, what does that make you think about? Well, for me, it's that classic saying, Take it or leave it. A problem with take it or leave it is that it removes the opportunity for your opponent to refuse the propositions that you're gonna present to them. And I'm gonna use that term opponent to refer to the person negotiating with for the rest, of course. And please don't think that I mean something antagonistic by this but my opponent I simply mean that person on the other side, this is a person who, by the way, is gonna help you get fantastic opportunity. So be sure to always treat them with respect, never as an enemy. This is someone that you want to work with towards a mutually agreeable end. When you take away your opponents right to refuse the proposition that you're gonna be presenting to them, you place unnecessary strain on negotiation toe end it prematurely before a mutual agreeable end has been reached. This doesn't mean that you should never use take it or leave it. It just means that we strive first to give the opponent an opportunity to feel as though they've won. So the second part of our definition states that all parties involved have an equal right to refuse propositions presented. This is a feature of every negotiation and because it's going on all the time, it's a principle of negotiation. Take it or leave. It violates this principle because you're removing the rate to refuse the propositions presented. It turns a negotiation into a dictation. Trying to force your will on the opponent is trying to manage the unmanageable. Nobody likes to feel like they've been sold and everybody likes to win. Negotiation is not about what you can get from the other guy, but what you can give them that doesn't take away from what you really want. People will only do business with those they know like and trust by acting as an equal negotiation. They feel like they know you by giving them the right to exit. They feel like they can trust you and I give them what they want. You better believe they're gonna like you. Great negotiators are like great leaders. Great leaders are great because of their ability to create agreements, they're able to unite entire nations of people towards a common vision. They don't do this by being logical by being smart or believing forceful. They win people to their cause by engaging with them on an emotional level. The ability to engage with people on emotional level and lead them with your vision is something that we're going to reveal throughout the rest of this program, 6. 05 Human Cognition & Cognitive Bias: So now that we have our definition of negotiation, I'd like to give you a brief overview of human cognition for the remainder of this session . We're gonna walk through the various negotiation pressure points and I'll show you how human cognition influences these pressure points. Human cognition is the collection of mental processes and activities involved in thinking, remembering, understanding and perceiving. What's truly fascinating about human cognition is that there is a massive overload of data around us all the time. But your cognitive processes are able to select what's relevant, that you can use them to get results in your life. So, for instance, right now, you're probably not aware of your heartbeat or your foot touching the ground. And in the meantime, you're listening to the sound waves being projected of your speaker, your processing the light particle waves right now in the presentation of your screen. And all the while your mind is making sense of all this data in the form of meaning of contents that you can store it and use it again later toe improve your life. Although human cognition is truly one of a kind, we routinely suffer from mistakes driven by something called cognitive biases. Cognitive biases happened when we hold on to our preferences in our beliefs. Even though there's contrary information right in front of us, you might think that you don't suffer from this, that you're the exception to the rule. In a matter of fact, that's a cognitive bias called the overconfidence effect. The relevance of cognitive biases to you inform negotiation is that they directly affect decision making is very important for you to be aware of engaging the right cognitive biases to work in your favor and to avoid the cognitive biases that will take away from mutually agreeable end. I know it might be a little bit difficult for you to wrap your head around this concept, so I want to try and sketch out a picture for you of how cognition works. Think of cognition like a Siris of channels with water flowing through them. So you've got the channels going sloped in one direction, and there's multiple offshoots, and these offshoots are cognitive biases or other trains of thought. So think of water. Water goes down the path of least resistance, doesn't it? Right? It will flow in the direction that's given on the angle it's given, and it won't change direction until it's acted on by a force or just something else changed the direction of it like a gate opening. So in the case of human cognition, is very similar to this. The mind is efficient, and it prefers shortcuts heuristics. It prefers the path of least resistance. When you have to actually put effort into your thinking, that messes everything up. So the brain is wired in such a way that your your heuristics, your short cuts will lead to the kind of results that we've been official to you. Cognitive biases, however, lead to mistakes. The reason this happens is because we are emotionally driven. Thinkers were not logically driven thinkers. We think from top bottom. We don't think from bottom up. So if your plan is to walk into negotiation and show your opponent all the features and benefits and all the reasons and edited it up, try and convince them that way. You're wasting your time. You have to engage with them at an emotional level, leverage their condom biases in your favor and away from the bad results. The use of a single word the tone of your voice or ah, phrase is gonna get them thinking in one direction is gonna open one of the doors along the channel where the water flows and instead it often in a different direction. So this is kind of ah, microscopic way of looking at I don't want to get too bogged down or too nervous about using the exact right words every time you negotiate with somebody. Instead, what we're gonna look at is the macroscopic view and macroscopic view shows that there are negotiation pressure points and you can use these to engage the cognitive biases to work towards your favor and away from a bad end. 7. 06 Section 2 Exercise: So now we're gonna do a little exercise and you'll find this in your pdf resource. It's gonna be a few problems to test your cognition. To see just how reasonable you are. You might be surprised to see that what you think is rational is really emotionally driven thinking. 8. 07 The Perception Of Options: negotiation is about agreement, and we know that power in negotiation doesn't come from trying to take away your opponents right to refuse the proposition you're presenting trying to force the negotiation. So the question is, where does power come from? In a negotiation, power comes from having options. If you're trying to strike up a deal with a cellar and they have multiple offers, be very difficult for you to get them to accept your lower priced offer with more favorable terms for you. If, on the other hand, there phone hasn't rang for months, they have very limited options and more flexible towards your presentation. In any case, however, it's important to remember that the reality of those options is not nearly as important as the perception of those options. Sometimes you'll try and work out a deal with the seller, and they'll let you know that they have turned down better offers in the when he presented , and I hear that all the time. But is that really true? Does it really matter? All that matters is your ability to convince the seller that you have more options that they do, and that the options are perhaps even more favorable than the ones that they're stuck trying to sell you when they have that feeling that gives you power. Power also comes from finding out what kind of pressure your opponent is under. Pressing down those pressure points gives you a lot of power in negotiation. There's four main categories its financial time, psychological and informational pressure that can be applied to your opponent. Where you find out about these different pressure points is by engaging in conversation and asking questions. Even if they don't reveal the information to directly, you'll be able to pick up on the reactions and get the answers that you're looking for. 9. 08 Time Pressure: let's begin with time pressure. This applies to every negotiation in some way, but sometimes it's a more crucial pressure point than others. What's important is if you're seller, let's say is in a situation where they have fewer options and they have less time to look for more options or to weigh the options available. Or, more importantly, if the options that have been given can't meet their time deadlines. But you can. Your cellar becomes flexible because of time. Pressure kind of varies by circumstance and by the industry or by the individual in their situation. You're gonna have to ask specific questions about what their timing needs really are in order to pinpoint what their time pressures are. So some examples might be, for instance, as a buyer. Maybe you have a buyer who needs your product or service because there's a sudden spike in demand and need to get that demand filled out as quickly as possible. Sometimes the opposite is true. You may have ah seller who's experienced a drop in sales recently, and they need to make upto pay off their loans and the various fees before time runs out there. Sometimes it could be something like a lawsuit, maybe a company's. I would go in a lawsuit in order paper. He's very expensive legal fees. They're willing to sell you at a book, so it's very important. And actually, it would be a prudent practice for you to keep a check list. So you compare the relevant time pressures by industry or by the situations that your client in mind is gonna be under and check off each time pressure and realize the symptoms as they come up in your conversation with them. Another aspect of time pressure is that you'll have a conversation with your opponent. Present your offer, but it doesn't work for them at this point in time. Surely enough, as the days turned weeks in, the weeks turn into months and no other offers are available, It turns out that your offer was a lot more attractive now than it was in beginning. Sometimes your opponents need time to see this, and that's okay. Be sure to always leave the door open, even if they give you a flat refusal, reject your offer without even a counter. Say something like looking. I hope you get what you're looking for But if you don't call me, I'm not saying I'll be in a position to buy. But we can always chat some more and see where we're at. Try to spend time with your opponent. When you're asking these questions, maybe you can even have conversations about similar interests. The reason you want to do this to spend time with your opponent is actually twofold. So number one, by spending more time with them, they're gonna have more trust with you over time. This is something called the mere exposure effect. If you ever had lunch with maybe a banker or someone has tried to take you out to coffee before, you know, you gotta wonder why they keep doing this. They're not benefiting from it on that meal, but they keep wanting to hang out with me. It's because they know that after about seven times or something like that, you're gonna have a built in trust, whether you like it or not, because you've just been exposed them so many times. Another reason why you want to spend time with your opponent is to take advantage advantage of something called the Irrational Escalation, also known as sunk cost fallacy. This is what happens when someone spends a certain amount of time or a certain amount of money, and it's at the point where it's been enough that they don't want to stop. They have to keep going forward. And this is kind of Ah, gap in our reasoning. But a song that we do every day you might have Ah, for instance, the iPhone. The iPhone keeps releasing more and more iPhones, and rather than getting noticeably better, there's minor improvements. But I don't get terrific. Lee better. You just keep going with it because everything now that you work with is related to Apple. It's too much to switch over to Microsoft or Galaxy or whatever other program might be available. One caveat, though. Be careful that you don't do this to yourself, that by spending so much time with an opponent, use being to feel that you don't want to walk away empty handed, because already you spent this amount of time an amount of money on it, and it's too late to go back Now it's much harder to pull out. You can get caught in that as well. Just be aware that if you're investing the time. It's because you want the opponent to be flexible. You don't want to get flexible as a result of that. 10. 09 Financial Pressure: we now turn towards financial pressure, and this is another interesting pressure point. Is that old saying When it rains, it pours, and this is no more truer than when you're a business owner or you have something you have to sell. And as time wears on, the bills pile up and begin to put incredible amount of pressure on you. It's kind of like a weight just scrunching down in your chest. This is something that you definitely want to take advantage of. Example. Might be, for instance, that you have a distributor. They've had a recent change in management or in presidency or whatever the case may be, and they just try to rewrite everything and try and revitalize the company, but actually makes it a whole lot worse. But because you've already established a relationship with them, you know that the product or the service that they deliver is of a certain kind of quality . So you call them up and say, Listen, I understand what you're going through Ah, and I am willing to help you out and work with you, but what are you willing to do for me? Be sure to keep in mind though that financial pressure in particular is a sensitive subject . People don't really like seeming like they're not very good with money. They want to seem like they're all that and a bag of chips. So when you're approaching a financial pressure, do it in a bit of a sensitive way. But don't be afraid to ask questions directly, because the end of the day you want to get the truth of the matter. Your opponent might not even be willing to share that information with you because they don't want to reveal that as a pressure point to you. So it's important when you begin to have a bit of a relationship over the phone or in person. Maybe after a few minutes of chatting, and you figure out what the situation is to tell them. Listen, if there's anything else that you like to add, now is the time. It could be that things will get to a point where there's nothing that you can do about it . Try to engage with your opponent this way. It's important because you get to exploit something called the loss aversion bias. Now this is a cognitive bias. When a person prefers to avoid the pain of loss rather than focusing on a game. And when they're in this state, it's very easy for you to get a great price or even great terms. Sometimes, for instance, if you're trying to get a really good price, they just can't go any lower because they're under too much financial pressure. That's when you start to negotiate more favorable terms. So an example might be, Let's say you have ah, business. They're trying to sell you a product and they're under certain financial pressures. So you go to them and say, Listen, you know, we're gonna alleviate some of the financial pressure by giving you this up front payment. We're gonna pay the entire cost. That's gonna come a little bit later, after we feel that we've gotten the value from your product or service and we're in a better position to assess what kind of returns were to get from that, Then we'll complete the payment at that time, so that's kind of an interesting way to work around the financial pressure and still get something great out of it on again. By gaining this loss aversion state, you're able to negotiate something very favorable for yourself. 11. 10 Information Pressure: So now on the third pressure point, this is information pressure, son Sue. He wrote The art of War, and one of things he said in that book was Know thy enemy. That's one of his principles. The same is true in the art of negotiation. On the way we look at it is the one that has more information over the opponent has a decided advantage over that opponent, and this may seem obvious. I've been talking this whole time about collecting information. So what I mean is, when you're having a discussion with your opponent, your collecting information, you're only going to get a glance at the picture of what's really going on here because you've only got that time that you're spending with them in the initial conversation. What's worse is actually the conversation that you have with them comes from them, comes from their perspective, isn't always very accurate. Moreover, a lot of times information comes from outside of the negotiation itself, but it's still pertinent. So, for example, is there some sort of economic reason that your opponent might be suffering right now? Or is there is there a better product or a better business out there that's taking away sales could even be that the person you're negotiating with is under a performance review or is in threat of being downsized. So you can see it's very difficult to get the exact kind information that you need in order to frame negotiation properly. Any bit of information that your collecting the discussion could be relevant towards create a solution later. Don't be afraid to ask tough questions. In fact, a lot of times a more direct you are about tough question, the more direct of a response you're gonna get from the opponent, even if they don't answer your questions. If they try and avoid it, their reaction is going to tell you something, or it may lead to more questions in the event that you just can't get any more information from them. You have to get it from them. You can get it from maybe their colleagues, maybe from other businesses that engage with them or even reception. They'll reveal this information to you because they might not be aware of its importance, or they may get the sense that you can be trusted. If you're really sophisticated negotiator. More to the point with tough questions. Don't be too selective about the kinds of questions that you feel like you should ask your opponent. You just don't know what information someone is willing to give to you. And actually, a lot of times when they get started talking, they just will not shut up. So be direct, be polite, but be calm and assertive and ask the kinds of questions that you think might be tough because you just don't know. 12. 11 Psychological Pressure: so the forth pressure point that recovering here is psychological pressure. Human psychology is vast and dynamic, but there are three very relevant pressure points that you can apply in a lot of your negotiations. They are fatigue, greed and fear. So let's start with fatigue. This is actually kind of, ah, of age old sales technique. And this is one where you fly out your opponent. So you take a long flight in their jet lag and then you take him out to a big heavy dinner , lots of gravy. And near the end of the night, when things are starting to wind down, you start negotiating. You start talking about terms. You start talking about price, you start to get them to make certain commitments to you, because at that point they just want to ease into a nice, warm bed. That's the point that you want exploit. And actually, another thing that you can do is you can drag out the timeline of negotiations, spend more time with them, push back the closing date because over time they're gonna get fatigued. Having to deal with this issue that just won't resolve itself will constantly be on their mind again. I've warned you before about being aware of your own pressure points and having work against you you want? Prepare yourself of events. Get lots of macho t Get yourself some red bulls. You don't want to be in a position where you're fatigued, your hoisted by your own petard and you're willing to just get the deal done because you're spending too much time on it. Second psychological pressure point. You know this one? This is faux mo fear of missing out. Sometimes the biggest pressure point you can place on a seller, especially a desperate seller, is the idea that you're willing to walk away if you can't get what you want and you wanna be careful here, you don't want this to backfire. If you're just bluffing and then they call your bluff, I don't care if you walk away, you're gonna be in trouble. So again, remember, you want compare to other options that you give yourself power and you can use this as an advantage to you. So by giving yourself walk away power, you put yourself in a position to tell the seller that you've already got two other options that you're exploring and they work just as well Right now you're looking for the person is willing to give you the best deal. Be very careful. If you start off a negotiation, you look at it and you think, Wow, this is a terrific deal. This could get me everything I'm looking for. I'll get my pay raise My bonus. I've been looking for I'll be able to take my sweetheart away for a weekend. If you get emotionally invested by potentially closing a deal now, foam Oh, is working against you. Sellers are able to pick up on your confidence level so you're better off using foam material vantage rather than having it work against you. The third psychological pressure is greed, and many of us lose their good judgment when we're surrounded by the clouds. Agreed happens to all of us. And there's a couple ways in which you can exploit that, and the first is anchoring. Now, anchoring is a cognitive bias. This is what happens when we attenuate to the differences in price or value rather than looking at the overall price of the item itself. So if you're in a situation where you're selling, you might be negotiating with the buyer at that point, and you have enough of a buffer that you know you're gonna make a profit so that you can drop your price a little bit and make them feel like they got an absolute steal. And that's how you lock him into closing the sale. If you're on the selling side, you can take advantage of something called the Decoy Effect. This is what happens when you present not one offer, but three, and that shows a range of prices or terms, allowing the buyer to pick one for themselves. And this is really interesting. It's a decoy. So what decoys is distracting? It takes them away from thinking that they could reject all three entirely, or ask for more options. You give him arrange, selecting that you've already prepackaged, and they pick the one that they feel works best for them but always works best for you because you presented up front 13. 12 Influence, Not Manipulation: So now you have a bit of a sense of how power negotiation comes from managing the perceptions of your opponent. You know that you can express power, representing that you have multiple options and that your opponent does not. You can also get power by exposing the various pressure points and then pressing down on them. Now, this is what we do to influence negotiation towards a win win solution. I want to be very clear that I do not advocate manipulation. Remember that our definition of negotiation, the principle of negotiation, is agreement and you're giving the opponent the equal right to step out of negotiation any time by power and influence. I'm referring to the leadership qualities of negotiation. You're trying to lead the vision. You're trying to lead your opponent towards an end that works for everybody, and you need to have power and influence. This is not manipulation because you're not trying toe just outright take advantage of them . You're not going after down and out people in trying to make their life worse. You're there because they got a problem and you got a solution. You're trying to intervene before that problem becomes a catastrophe. This really comes down to a difference in long term versus short term thinking. Short term thinkers are advocate er's of manipulation and other dirty deeds. They do this because they see the immediate results of getting away with standing somebody . This is not the kind of person that I advocate that you become as a negotiator. Instead, I think that you should aim for a long term game. There's a couple of good reasons for you to do this. The number one would be when there's a time of distress, a time moats that the opponent who's, ah, short term thinker could take advantage of the situation. Anybody else would expect that. But you don't. You demonstrate integrity, character and leadership during difficult times. This builds strong relationships and also get you more deals because of referrals and repeat business. Don't be a short term thinker and don't be taken advantage by people who try to manipulate . I know I'm advocating that you take the high road, be a leader, but be aware that sometimes you may need to compromise if you feel that you should in order to protect yourself, and that's okay, too 14. 13 Section 3 Exercise: that Section three, and now we're at the exercise again, and you'll find this attached in your pdf resource for this lesson. The question I want you to think about is a time in which you had to make a decision but that it cost you because you didn't plan ahead and you had certain pressure points. Also, see if you can't spot some of the pressure points with some of the other colleagues or associates would be working with for the rest of the day. Have a conversation with them and see if you can feel out some of the symptoms of some of the pressure points that they might be under. Maybe they give you an indication of that from what happened to them over the weekend or from what happened during the day. Just keep an eye out for that. Listen for it. See if you can find those clues 15. 14 Diplomatic Style: There are about five main negotiation styles, of course, with other variations or hybrids of these styles that you're gonna come across in your career as a negotiator. You already have one of the five or a hybrid as your default position. And so a lot of other people that you'll be negotiating with it will be helpful to you early on a negotiation to pick out this negotiation style so you can position yourself to handle them rationally ahead of time rather than emotionally. In the moment it comes down to the negotiation. We begin with diplomatic style. The diplomat is tactful and sensitive. She's a great listener, and she knows how to work with others to get towards a mutually beneficial end. A great example of this style is former president Humanitarian Jimmy Carter. Jimmy Carter knew had to lead others as a diplomat. He knew how to engage in with their vision and gain their support towards fulfilling that vision. The important point to remember about the diplomat is that they take a collaborative approach. This is what's known in negotiation world as the win win approach. Perhaps the chief advantage of using a diplomatic style is that you get to use the negotiation principle, which is acting a little dumb. It's very disarming toe. Others if you seem less intelligent than they are. In a really great example, this is my personal hero, Detective Columbo. Have you ever seen the show? You know that Colombo kind of stumbles and bumbles about? He's a little bit aloof, often very forgetful. He always seems to solve the case, no matter how convoluted his genius lies in acting dumb. By controlling his ego and seeming so helpless, he's able to bring down the tension and competitive nature of his opponents. This, by contrast, encourages a collaborative effort which Colombo can use toe win. Remember, the idea is to disarm your opponent. If you look like their intellectual superior, they're gonna keep their guard up and they're gonna assume that you're onto something. But when you act a little bit dumb, they're going to be pretty convinced that you're not trying to outsmart them. Let's review some of the pros and cons of using the diplomatic style in your negotiations. The first, which of Ari mentioned, is that you engage with your opponent, an emotional level allowing for a win win agreement. The second is the collaborative style allows you to find out what the true needs and wants are your opponent. This is better than basing your offers on how you think that your opponents going to react . You'll be able to narrow in on their acceptable or unacceptable positions by collaborating with them. The third Pro is that diplomats always have a good reputation in their industry. This leads to more promotions, more referrals and repeat business in the future. Now, how about the cons? Well, first obvious con is that the diplomat is willing to leave a little bit of money or a little bit of favorable terms on the table for the opponents that they feel as though they've won. The second con is that the diplomat is vulnerable to liars now. I touched on this a moment ago, not being a victim of manipulation. Lying is manipulation, and unfortunately, there are a lot of negotiators out there that are totally fine with lying to you. So you have to protect yourself here. Be prepared to lie. I'm not advocating that you live first, but if you feel is that your opponent is lying to you, call them out on it and be prepared to lie also in order to protect yourself. The third con for the diplomatic style is that hostile, competitive, dictator style negotiators will have a hard time trusting your approach. They also may try to take advantage of you. You can also spot a diplomatic negotiator based on the kind of phrases that they use. Some of the phrases include. Feel free to say no to this. Does this work for you, or is there anything else? Here's what you do when you're working with a diplomatic negotiator, remember that their aim is to ensure a win win result. So when you're working with them, feel free to share some of your wants and needs in Austin. Open Way. Don't be too honest. Don't go overboard. Reveals too much information, otherwise will begin to slide under the informational pressure situation that we talked about earlier. You can be open and honest with them. Just remember that they're not your friend. As long as they get the sense that you're willing to work with them in a collaborative way , this will be shown back to you 16. 15 Dictator Style: have you ever written a beautiful congee or Craigslist? Ad taking fantastic pictures waited for the right time of day to post the add on Lee into the later getting emails, saying $1 final offer. How about when you're on the highway and you're trying to exit after the lane? That's that's ending there, and the person to your left just won't let you into their lane. Or how many times have you been in an argument on social media? Nobody likes a dictator. Dictator style. Negotiators use threats or intimidation to get their way there, often ego driven and uncooperative. A dictator is not happy if you win, even if they're winning, because for them it means that you're getting some of the stuff that's left on the table that is rightfully theirs. This is what we call a win lose scenario. The dictator will come in a desperate situation and take absolutely everything, leaving the other party with nothing or the feeling of loss. This can hurt people and also burns bridges. There are, however, two groups of people for which the dictator style negotiation is effective. First is other dictators and second is insecure people. Other dictators understand this approach of negotiation and after some energy has been wasted there, Okay, with a bit of a compromise. Insecure people, whether because they had a couple of parents that were dictators themselves. Or they had siblings who told him what to do and kept them, you know, feeling like they were worthless or whatever the case may be. Maybe it's a relationship that they're in. These people Onley understand being dominated and taking on that submissive role. And sometimes it's a very effective approach to come at them that way because it's what they expect. It's what they know and trust, and they'll work with it again before we talked about. One of the cons of the diplomatic style is that the dictator won't trust a diplomat because that seems a little too trusting. Then they like that sort of relationship. The same is actually true for some insecure people. Now, this is kind of a smaller segment, but these Air two classes in which the dictator style can be effective now for some of the pros and cons. First of all, the dictator is very effective at shutting down other dictators. They did not put up with that crap sometimes will compromise. The second pro is that this actually saves time that would have been spent negotiating, because sometimes people are so desperate or insecure that they're willing to give in right away. The third pro is that if you come in as this big, tough, competitive negotiator, this will discourage the opponents from challenging too much. It also lower their expectations for them, coming out with a lot in the negotiation. Now let's talk about the cons. The first is being a dictator in your negotiations will engage your opponent in a cognitive bias known as reactive devaluation. This is what happens when the opponent doesn't like your proposals just because they perceive you as an adversary. In this case, they may take the worst option to prevent you from winning or tarnish your reputation, preventing you from getting repeat business or referrals in the future. The second Khan is a little bit weird. If you get your outrageous offer accepted because you were able to intimidate or bully your opponent into submission, you always have that lingering feeling of Could I have done better? Could I have been a little bit harder or gotten more out of the deal that I leave any money on the table. Remember, as a dictator, you don't like doing that. The third Khan is another cognitive bias. This one's called the Backfire Effect. If you go in with this intimidating kind of style, or you try and let your opponent know that their service or product is worthless, you're not gonna pay a penny more than what you offered. This may backfire on you. They'll probably dig in their heels because they already believe that what they do is really great. It won't take your you're supposed truce very seriously. Even if you are telling them that they're in a situation where they have to be desperate and take your offer, they'll still refuse this. It'll backfire on you if you're a little too intimidating. It's also pretty easy to spot a dictator sound negotiator because of the phrase they use. Some of them include final offer, take it or leave it or last chance. They also go for phrases like you have until such and such time and such and such date to give me an answer. Thirdly, they always use this line. You will regret it or you'll be sorry. Don't come crying to me when here's what to do if you come across a dictator in your negotiations. First of all these type negotiators congee, riel, jerks there, blowhards. So the only time they're effective is when you are insecure or you're desperate. All you do is react to their proposals with calm, assertive energy, letting them know that you've got plenty of options to explore. You can always welcome them back to try again later. But for now, this is where you stand. If you're buying from a dictator, try and feed their ego a bit to bring their energy level down. You let them know that you really interested in their products that you're exploring other options that worked just as well. At this point, you're looking for the seller who's willing to give you the best deal. They're not gonna like this at first, but it will take their mind off of dominating you and onto the compromise from that compromising state of mind. You can take him up to a win win situation 17. 16 Ben Franklin Style: So this is the third style of negotiation. Ben Franklin style. We know that the dictator aims for win lose, but what kind of negotiator aims for lose win? In this scenario, you become a martyr if you're a Ben Franklin style negotiator, giving into the demands of the other party. Sometimes negotiators do this because they want to preserve the relationship and they'll give in to the pressure of the other side time. Listen, you're hurting our partnership by not giving in to these demands. We want this, this and this, and you know it shouldn't be any trouble for you to do it. Benjamin Franklin captured this phenomenon when he stated he that has once done you a kindness will be more ready to do you another than he whom yourself have obliged. So this cognitive biases, named after Ben Franklin, it's the Ben Franklin effect. This is what happens when we do a favor for the other party and are more likely to do more favors for them if they do not reciprocate on the initial favor. I'm not saying that you should never be a Ben Franklin style negotiator, but you have to wonder whether a one way street relationship is something that you want to continue to maintain. The second is sometimes businesses will reciprocate over time because you've given them a favor and they haven't given back to you. So sometimes they kind of catch up on that down the road. The third and Final Pro is that you're likely to get referrals and repeat business because you're so giving now for the cons. The first main reason I don't like this style negotiation is that it's not a negotiation. You're simply surrendering to the arbitrary whims of the other party. The second Con is that this creates kind of a precedent, establishes high expectations in the other party and encourages further losses for you. Lastly, by using this approach and negotiations, you guarantee a loss and you don't guarantee loyalty from the party, which is the whole reason you gave up that loss in the first place. Ben Franklin negotiators will also use these typical phrases. I'm sorry we can make it up to you. We can make that work for you. No problem. If you ever need anything else, please think of us. So what should you do if you come across a Ben Franklin style negotiator. Well, first of all, the Ben Franklin style negotiators, the martyr they're very eager to please. They view you as low hanging fruit but that you're just somehow out of reach. So they're afraid of losing the deal, and you might be tempted to sort of take advantage of that. Um, but we advocate win win here, so don't do this instead. What? What I encourage you to do is to reassure them that their product or service is valuable to you. But of course, that you're exploring other options. So they're gonna be a little bit maybe standoffish about this because they're they're used to that style where they're giving and people are never satisfied with them. You're gonna go the opposite route and reassure them a little bit. And what's gonna happen is they're still going to try and make a concession to you, most likely. Ah, and you can accept this concession for now. But when it comes time to closing, you can always make up for their generosity later, by giving them a gift or showing appreciation in some sort of way, this will come across very well. They'll appreciate this gesture. It'll solidify the relationship. It'll encourage referrals and will definitely solidify it. Repeat business in the future because not many people are willing to do this. 18. 17 Kamikaze Style: So now we're on to the fourth style negotiation, which is really more of a reaction than negotiations. Style is the kamikaze style. In this situation, we have a lose lose negotiation here. At least one, if not both parties are in a no win situation. So all of the perceived options available means that there's gonna be a net loss. An example of this might be a business partnership split. So imagine business partners. They've been doing really well, have a relationship. And, ah, for the years they've been together. All of a sudden, they reach a point where they have irreconcilable differences. So rather than negotiating together toward a mutually beneficial split, emotions run high. The reaction is lengthy and expensive litigation process. Eventually, to keep running this process and their debts get so out of control, it begins to affect the company. The company never goes bankrupt on all parties. Walk away that in no win situation. Sometimes you have a situation where one party is in a no win situation. But the other party still has the potential toe win. Now, with the kamikaze style negotiator knowing that they're going to lose, they will see to it that the other party loses with them that way. They keep the playing field nice and level. Both parties lose equally and suffer. This is kind of interesting, But in either case, whenever both parties are dan from beginning or one party is Dan and then causes the other party to lose, it's always because both parties did not come together toe work together towards a creative solution that would lead to win win, which is always an option. It's just not perceived option for the kamikaze negotiator, the prose of a kamikaze style negotiation. 1st 1 would be presenting a lose lose scenario to your opponent might just scare them into giving you something. The second is, if you're in a lose lose situation, it means the opponent was tied to. For some reason, if you both lose, that will set the expectations low that if you have to do a deal with in the future, you can get more at a later time. The Third Pro is when you propose a lose lose situation. The reaction of the opponent tells you something. It tells you how they value if they react negatively or hostile. Maybe they didn't really value that much. But if they work really hard to try and get you up from lose lose, it means that they value you. That's informational pressure that you can apply next time. Now for the cons of the kamikaze style negotiator. The 1st 1 is kamikaze. Is hell bent on lose lose. This means that nobody wins, at least for now. The other one is if you are in a situation where you have a lose win. So the other party has the option to win still, but you create a lose lose intentionally. This damages the relationship. The third con is that this is just uncreative style negotiation, but it requires energy, effort and time. Kamikaze style Negotiators use phrases like, Why should I be the only one? Or what's the point or lucky you. So what should you do if you run into a kamikaze style negotiator? Well, obviously, this type negotiator is an emotionally negative headspace, so you want to redirect that you're the leader and you're gonna leave them with your vision . It's gonna be emotionally driven. You won't be able to get them to win win right now, so what you do is you explain to them. Look, things don't look so good right now. Unfortunately, there's nothing I can do. But the future looks better, and I'll be able to come back and give you something later. In this situation, you're trying to preserve a lose wind scenario, because if you win, you have the option to help them win down the road. Based on the value that you got from this negotiation, you can turn the lose win into a win win, inevitably, if they're willing to play ball with you. In fact, lose lose may just be a perception. By asking questions and leading with an emotionally driven vision, you might be able to find out that before you came along, there are creative ways that you can get around the problem right now and lead to a win win where they thought previously the only option was lose. Lose 19. 18 Henry Clay Style: If you're a history buff or a curb your enthusiasm fan, you know that Henry Clay it was known as the great Compromiser. His philosophy was, When all parties are dissatisfied, that's a good compromise. Compromise and negotiation is a win win, lose lose hybrid. This is a situation where both parties have one. But in order to win, they had to lose something. And the interesting thing here is that there's some sort of satisfaction in the fact that both parties lost equally. Compromise is usually the result where one or both parties are disingenuous or unreasonable in some way, usually trying to perform a negotiation tactic or trick someone. And it costs a bit a trust in the relationship rather than win win. Pretty soon, the thought is us versus them. Both parties throw their hands up and just hope for a compromise. Henry Clay style negotiation has several pros, first of all, to hostile parties are able to come together and reach an agreement that's pretty good. Secondly, both parties lose, but both parties win, so there's unequal compromise. The opportunity to repeat business or get refrozen future is still open. Thirdly, it's much easier to compromise than to reach a win win win win is a long term game. Sometimes it takes a little bit more time, a little bit more energy. A little bit more effort to put together is simply guessing a person's expectations or reactions is way easier than working with them to find out what they truly need. Want now for the cons. First of all, if you're in the compromise mindset, this is kind of attempting trap. It keeps you in that compromise mindset rather than strive for win win win Win is obviously a little bit more effort, little more collaboration, a little more sophisticated. When you do this, you limit your returns currently and you increase losses. Same is true for future opportunities because you're trapped in this mindset. The 2nd 1 is uncreative effort. So when you resolve a problem for your opponent by creating a loss, even though they win, that's not very exciting. So they may be indifferent to you, and not really likely Teoh use you again in the future to refer you in. The worst case scenario is that they hate compromise and you lose the client entirely. Third, because compromise has a loss element. This may encourage a bit of stubbornness or a bit of aggressiveness in the opponent. So winds up happening is you tend to drag out the timeline of negotiation. You put in more effort, more time, more energy, and you don't get as good result as if you were to work towards a win win. Some of the phrases of the Henry clay style negotiator include Let's just cut a deal or we both know how this is gonna end. Let's just do this. Or finally, let's agree to disagree. Here's what you do if you run into a Henry Clay style negotiator, most likely the Henry Clay style negotiator is the stodgy negotiator who's been doing the same method for many years. That motivation is just to get deals done, strike up deals, get him out of the way rather than spending more time. That's where you're gonna hook them. So you let them know, light them up by saying, Look, I want to cut a deal with you and get this thing done. Once you have their attention, you let them know that you are actually willing to give them more than they expected. If they're willing to work with you once they see that spending more time with you is gonna lead to better results. In fact, maybe get rid of the losses. They'll be more inclined to entertain the notion of win win. This is when you begin to get a little bit more, collaborate with them, try and get them up from the lose. Lose just to the win win. Take away compromise, make it a win win agreement. 20. 19 The Importance Of Win Win: We now have all five, the negotiating styles in full view, and I want to talk a little bit more about the importance of win win. Sophisticated negotiators strive for and know how to reach win win negotiation. They do this not by guessing with wants and needs of the opponent are or by assuming what the reactions are gonna be. Instead, what they do is they ask questions, gather information, present their vision to engage the opponent emotionally and lead them toward the results based on how the opponent reacts to these proposals. To show you what I mean, I'll share a personal story about when my wife and I moved out for the first time back when we were dating. At that time. In the four years that we have known each other, we had never once been in a fight, if you can believe it Two months into moving out, however, we almost separated. The reason this happened is because I just couldn't understand her. She just couldn't understand me, even though we loved each other and we we knew each other, we just couldn't guess accurately enough what the motivations were. What was driving the behaviour what the other person's needs and wants were. It wasn't until we engage in a discussion sharing information, gathering information in asking questions that we were able to really get down to what the true wants and needs were and collaborate. When you get into the habit of making predictions about how others will react, or you start inferring what's going on inside their head based on their behavior, you get into the danger zone of making a horrible guess or a bunch of small, bad guesses that lead to an ugly result. The problem is, this is just how we're wired. When we look at other people, we make predictions about their behavior and thinking all of the time. This includes our family, our friends, our co workers or even strangers on the street. This is just how we are in our default way of thinking. The take away for me with my experience with my wife and my caution to you is don't be a mind reader in the world negotiation. This habit of predicting what other people are thinking is just a nasty habit. What you really want to do is, rather than guessing you wanna ask present offers and judge the reactions that will tell you something about what's going on with your opponent rather than simply guessing how they're gonna react. Okay, so you may have spotted a contradiction here. Why did I just bother going through all those different negotiations styles telling you how people are going to react? If I'm telling you now, Don't guess on how they're gonna react. The reason I did this is because inevitably, you're going to run into these different style sooner or later, I want you to be prepared ahead of times that you know how to deal with it rationally rather than getting emotional when you're confronted with it. It's important for you to be aware of these styles, but you cannot possibly use what I've just given you to read other people's minds. Everybody, no matter what the negotiation style is they are individuals. They have unique histories, circumstances needs. What you have to do is engage with them with your vision emotionally that they understand that they stand toe win by working with you. 21. 20 Section 4 Exercise: In this sections exercise, you'll find an attached pdf resource. I want you to think about a time when you try to negotiate with someone. What did you want and why? What did they want and why did you achieve win win? Why or why not? What was the approach that you ended up using? Would you refine this approach, or would you switch to another one of the approaches mentioned in this lesson so far? 22. 21 Negotiation Gambits: Let's recap a moment here so far in this course I taught you a little bit about human cognition. You learned how cognitive biases these emotionally driven thought processes lead to mistakes in decision making. Then I showed you how toe leverage those cognitive biases by applying different pressure points so you can become a power negotiator. Afterward, I showed you five negotiations styles. These will prepare you when dealing with these various people in your negotiations that you can handle them rationally. Instead of getting caught up emotionally and using cognitive biases against yourself in this section, I'm gonna walk you through the different stages of negotiation and provide you with the techniques that turn average deals into truly terrific buys. What I'm about to teach you are the techniques, plays or gambits that move negotiation in different directions at different times. These are known as the beginning, middle and ending gambits. I'm gonna take each in turn, and I'm gonna talk about them as if you are a buyer working with a seller. But even if you're a seller, they work Justus well, even if you aren't buying or selling right now, these different negotiation techniques can apply to your day to day negotiations with others 23. 22 Always Ask For More Than You Expect To get: throughout this program, I've been advocating helping your opponent toe win. The best way to do this is to ask for more than you expect to get. If they haven't asking Price offer a much lower price. If they have a specific date, they need to sell you. Extend that closing as far as you can if they have different fees. If they if they charge you for installation or other junk fees, you tell him that you want a wave it you tell them that they're gonna pay for legal fees, accounting fees, registration fees. Whatever the case may be, you ask for more than you expect to get. The reason you want to do this is because you're searching for your opponents. Least acceptable position. They're minimal. Plausible position. This is the MPP, and you're on the hunt for this. When you ask for more your opponents minimum plausible position or MPP is simply there. Walk away price or terms or both. This is the point at which they cannot continue to go below this because doing so will put them in a far worse position than not doing the deal entirely. It is important for you to gather as much information as you can before you make your initial offer, because you want to be able to tailor your offer to press on the relevant pressure points and get as close to your opponent's MPP as you can. If you go beyond their MPP, they may not even counter because they're gonna think that you're nuts. But this is still okay. What you do is leave the door open, knowing full well that their options are limited and that they're under certain pressure points to get the deal done. Sooner or later, they're going to realize that yours is the only workable offer on the table, and they're going to try and get you up to their MPP and beyond if they can. If they don't, then this is still OK because remember, you always want to be able to make an offer with the option toe walk away. This means if they reject it, they don't come back to you ever. You still have to other workable options that work justice. Fine. There are two main benefits to beginning negotiations by asking for more than you expect to get. The first is if you ask for more than you expect your in a position where you can give some items away and not give up anything that you want. This is in contrast with the dictator style negotiation, where they want to keep everything. If you're willing to show your opponent that the things that you want can be given back to them, at least that's how they're going to perceive it. They're gonna be more willing to work with you because they see that they can win. In contrast, if your first offer is your best offer, you have nowhere left to go. You can't go any higher, and it's much tougher to bring them down to a lower offer. What's worse is if your best offer is below what they want. You haven't given a vision for how they're gonna win, and in fact, you on. Lee offered a losing situation. The second reason why you want to ask for more is that your opponent might just accept it. You never know what an opponent is willing to accept unless you ask. This is far better than guessing or assuming the reactions ahead of time. Asking for more than expect to get is truly one of the most important gambits that you're going to use in your negotiations. It will make you and the company tons of money while the same time helping your opponent win, thus ensuring future referrals and repeat business. Now you might be reluctant to make an outrages offer for fear of getting a negative reaction out of your opponent. As a mind reader, you might think that you only want to offer what seems to be a reasonable offer that is likely to get accepted as long as you make your offer in a calm, assertive, respectable way, a way that will get your opponent to see past the ridiculousness of your offer and focus more on bringing you up to their MPP, you created an opportunity where both sides can win. There's a great saying that captures this perfectly. It's taken the hell said. When you bring him back to Earth, it'll seem like heaven. It takes skill to be ableto ask for more, and you expect to get and still have the seller working with you. This is something that you should practice in your day to day negotiations, so that when it comes to the important stuff, you'll be unfazed by a typical reactions and also be ableto ask more effectively 24. 23 Bracketing & The Silent Close: you might still be wondering just how much you should ask for before presenting your opening position. You should assume that whatever it is that you offer is gonna end up somewhere in the middle of your offer and whatever figure that the opponent is named for you. This exploits an intuition that we seem to have in the Western world called Splitting the Difference. You can improve on this approach by leveraging the principle of bracketing. Here's how it works. In your initial conversations with the opponent, you'll gather information about the relevant pressure points for them. So when you make your offer, you say, If we can meet these relevant pressure points, what is the least you are willing to accept? In price? You'd be amazed at how far down they'll drop their price just by you saying this. What you do here is you get them to commit to a figure that's below the initial asking price without even making an offer. Yet after the opponent commits to a specific number, you repeat this number in an exasperated surprise tone, and then shut up. This is what's known in the sales world as the silent close. What's gonna happen is is gonna be an awkward air of silence, and you're gonna want to resist the urge to be the one to speak. First, just let the awkwardness carry and have the opponents speak first. The rule is the first person to speak loses. The seller will likely not know what to make of this, and they will react to it in one of two ways. They're either going to justify the price or they're gonna come down. If they justify it, they're going to reveal more information to you. If they don't, they're going to negotiate themselves down before you again. Even made an offer again. You'll be amazed to see just how low they're willing to drop from their apparent, least acceptable rock bottom price. It's important that you act surprised. You have to really put some emotion in this, the reason being, if you don't, they may feel as if they had given you too much and be a little reluctant to work with you going on. The other downside is that if you just accept that price, you may seem flexible, and that gives an opportunity to add to that later on. A negotiation So now you have the seller committed to a much lower price than was originally asked for. Next, you do your meeting in the middle math, and you present your initial offer because you've trimmed away your seller's price from the asking price to this new price you put in your initial offer. The negotiation objective now becomes bracket here, with the result likely ending up somewhere in the middle. 25. 24 Reluctant Buyer: if your opponent refuses your offer without even a counter, just know that in the world of negotiation, this count is an open position. Leave the door open and say something like, Listen, if you decide to lower your price, I want to be the first to know Fair Remember that you're trying to get as close their MPP as possible. If they accept your offer, this probably means that you offered too much. If you get a counter, don't be tempted to say yes right away. The counter is an indication that there's still a bit of room between the MPP and the counter offer they presented. When you get the counter, play the reluctant buyer and say something like, I'm sorry, but you're gonna have to be better than that. Experienced negotiators know this tactic, and they're gonna respond by saying something like exactly how much better trying to bracket you with a number. What you'll say instead is, I don't exactly know at this point at the moment we're reviewing to other options. Why don't you think it over and let me know if you can do better than I could bring it to my superiors or partners and see if they'll go for it. This move will lie to squeeze just a little bit more and let the seller know that you're willing to walk away. 26. 25 Section 5 Exercise: I have attached a pdf resource for this exercise. What I'd like you to do is get comfortable asking for more than you expect to get. Well, I'd like you to do is have a phone call with someone, preferably a phone call. If it has to be a text or an email, that's okay too. What you want to do is let the person that you're calling know that you would like to go away for the weekend, but that you have a whole bunch of chores that you gotta do. You gotta get the car fixed. You got to clean up. You gotta take out the trash. Whatever the case may be, let them know that you've been aching to go on vacation forever, and you finally have a weekend. But you just don't have time to take care of all these chores by asking for more than you expect to get your answer. Maybe. Ah, yes. Which would be fantastic. Or it will be a no. In this case, you give him an alternative, let them know. Okay, Look, I'll take care of all the other stuff. Can you please just take care of this one by bringing your request down. It'll be a lot easier for them to accept it again. You're bringing them. Bring them to Earth. But it seems like having at this point, because the idea spending weekend doing your chores will be total Help. Practice this a few times if you can, and make sure that you get in the habit of asking for more than you expect to get comfortably and reward yourself if you get this request. 27. 26 Let Me Talk To The Manager: now that you've bracket your opponent and squeeze them for a little bit more, you're at the middle stage of the negotiations where a different technique is gonna apply here. You want to maintain the flow of the negotiation and the technique you're gonna uses an old car sales technique called appeal to higher authority Gambit. If you've ever tried to buy a new or used car, you know that after the sales agent has sold you on that vision of you driving the car and feeling super great, they're gonna try to up sell you or you're gonna try and talk him down. In any case, they're gonna respond with something like, um, I don't know about that. Let me check with the manager after they slipped in the back and grab a coffee or check their Facebook page or whatever, They're gonna come back to you with either good news that they've helped you win by meeting your demands or bad news that the stodgy old manager just won't budge. What the sales agent is doing here is communicating to you that they do not have the authority to make decisions. Why is that important? By leaving the decisions up to an unapproachable or fictitious entity. The sales agent is strengthening her position. What she's doing is effectively rejecting your proposal while looking like a friend and making it seem as though her options are the only options available to you. The appeal to higher authority gambit works best with a vague entity such as a board or a committee. If someone tries the old check with manager routine, you can simply just say, Listen, I'm sure that they would love to help me make a decision today. Why don't we just bring them out so we can resolve this here and now? Don't fall for this trap. Use a vague entity such as a group superiors, partners, whatever the case may be. And put that off onto something that your opponent cannot call out. The opponent may try to use vague entity on you. So here's what you do before you even bracket early on negotiations, you say I want to ask you something. And if the answer is and maybe please just tell me no. If we were able to create a proposal that met all of your requirements, is there any reason you couldn't give me a decision today. What this does is exploits another cognitive function where the opponent will commit to something and carry on through to the end, even if it's to their disadvantage. 28. 27 Challenging A Bluff: Sometimes the sellers will try to convince you that doing the deal as you presented it will lead them to a net loss. But this is not your problem. You're not the one who put them under the certain pressures to sell at a discount to you. That's their problem. What you've done is come along and solve this problem before it's become a disaster. The real reason you to do this is that there's a chance that the sellers might be bluffing . As a buyer, you want to get a reaction from the seller to gauge whether or not they're being honest about what they're saying. So here's what you do. You say. I understand that that's what you're going through right now. So here's what I'll do. I'll take it back to my superiors and see if they'll go for it. Just so I understand if they decided to go with one or both of the options that reviewing right now, is there any sense in me coming back to talk to you again? If they're bluffing, they'll make a small concession to get the deal done. If they're not, you may have gone blow their MPP, and there's no point in doing a deal with you. 29. 28 Tit For Tat: I remember when I was starting out as a real estate investor that the first couple of deals that I put together started off great. What happened was near the end of it, the seller would come back to me and asked for one small concession and then another and then another and another, and eventually the deal would become almost unattractive. So here's what you want to do. If the seller comes back to you requesting a small concession, you nip this problem in the bud For every concession that they request from you, you request one right back by going tit for tat with the seller, you do two things. First, you send the message that nothing in life is free. If they really want the concession bad enough, they're gonna have to give you something. What you do is you tell them Well, I'll run it by my superiors. But if I do this for you and get it done, what can you do for me? The second is you want to make sure that you stop this problem before it gets worse. You nip it in the bud by sending back a concession for the concession. You prevent them for one to come back to ask for more 30. 29 Section 6 Exercise: please find a pdf resource attached in this lesson. The exercise right now is for you to think of a time in which you had an issue that you try to resolve on Lee be blocked by the old vague entity. I'll check with the manager routine. If they came back and gave you a result. Was it the result that you wanted? Or did you end up giving them something? And why? If not knowing what you know now about the appeals, a higher authority, what would you have done differently to change the result? 31. 30 Good Cop, Bad Cop: we're now at the stage of negotiation where we're drawing towards the conclusion. And just like the other stages of negotiation, this stage is gonna have different factors at play. There gonna be applying the ending Gametes, which are able to do here, is to resolve the negotiation without conflict and leave your opponent with the sense that they want. One of the best examples of any negotiation conflict is using the old good cop bad cop routine, and we know how this works. So when there's a crime that's committed, there's a suspect. The suspect is taken in for interrogation, and what happens is the good cop walks into the room with a nice big cup of warm coffee, offers it to the suspect and lets the suspect know that they believe them. They want to work with them shortly after that, For some reason or other good cop gets called away the scene and then the maverick bad cop comes in a bad cup is a lot less sympathetic Back hop rails, this suspect, letting them know that they believe that they're the ones who did the crime. They've already got their partner rolling over on them and have enough evidence with the win. They just want a confession. They hammer out these details, or at least try to, and the suspect gets a little rattled. At this point. Naturally good cop is gonna walk in to save the day. She lets bad cop know that the chief wants to speak to her and reassures the suspect that she's willing to work with him if she if he just reveals a minor detail now, this is very interesting. So good cop knows a little bit about cognition here. Asking the suspect to give a minor detail she knows will lead to larger details later on interrogation. What happens next is course the suspect trusting good cup reveals a minor detail that gives good cop a lot of information. She encouraged. The discussion. Keeps it going. Suspect keeps rambling on until course Good cop has enough to make an arrest in the middle stages of negotiations. You communicated to the seller that you are not in a position to make decisions without checking with higher authority. First, this sets you up to be the ally as the good cop. The way this works is you put all the power and negative emotion towards an entity that your opponent is never gonna meet. That's the bad cop. Also, at this point, negotiation, there's a bit of attention. So your opponent is going looking for relief in this tension, and they're going to seek it out from you. And you can do this because again you are the good cop. As the good cop, you tell your opponent that you're willing to go to bat for them. You're gonna present their counter to the superiors on their behalf. Course you're gonna return later with bad news. You say something like, Look, I'm sorry. I really love to do the deal, but it looks like they just won't go for it. And I just don't have any leeway here. Now you can make a suggestion to them. You say, Look, I know they're being really difficult. Why don't we see if you can come down a little bit more? Maybe 7%? I think that they'll accept that you leave them with that suggestion and then you let them come back to you a little bit later. If they accept this, you just got them to come down another certain percentage. But This is still a counter, which you'll take back to your superiors for review. You can always come back with them and say, Listen, unfortunately, they're only gonna take 10% squeezing a little bit more out of that negotiation. Or, if you like to come back and say, I've got great news I was able to talking down and ask them to keep it just to 5% giving them 2% back and helping them feel like they won. If the opponent tries to scam bit on you, call them out on it. Maybe with a little bit of a laugh or a smile, you say, Ah, the old good cop, bad cop routine. Look, let's not go down that road from here on out. I'm just gonna assume that whatever he's saying is coming from you, this is gonna kind of throw them off a little bit, a little bit embarrassing to get caught with this common technique, so they'll probably clumsily walk away and try, and we worked their plan. Just remember that both good cop and bad cop want to make an arrest. Both parties that you'll be negotiating with also want to get the deal on their terms. And you're not gonna let this happen? Remember that everyone involved negotiation. It's not on your side. The opponent. They're all bad cops in your eyes. 32. 31 Nibbling: in the early stages of negotiation, you weren't able to help your opponent win, and at that time they were still building up trust with you. So at this stage of the negotiation, you're able to ask for much larger requests. So, just like with the good cop bad cop routine, the good cop knew that those small decisions would lead to the bigger confession later on. And now, at this point where you're able to get that bear confession out of them. So here's what happens in Congress. Science. There's something called cognitive dissonance and this is what happens when you are met with inconsistent beliefs that creates a little bit of tension inside the mind. And what this does is it forces you to engage in behavior that will restore cohesion of those beliefs. So in this context here, because they spend so much time with you, they're now committed to the idea that you are someone that can trust and going against. That commitment will lead to cognitive dissonance. They don't want this. So, in orderto have the relief that they're looking for, they will agree to give you these much larger requests when they wouldn't have done so early on in the negotiation. This larger request is gonna look like something like I mentioned earlier. Where I was talking about the example of the person is in a position where they want to sell to you and their little bit desperate. So what you want to do is make enough of a payment to keep the wolves at bay. But hold off on paying the entire balance until you've seen that you've gotten the value from the product of service that they say that they can bring you. So it's very difficult to negotiate this with a perfect stranger, someone who doesn't have trust in you because they have toe wait a certain amount of time relying on you to make this payment, someone who is in a situation at this point negotiation will be confronted with cognitive dissonance and want to look for the relief. So rather than disagreeing with it, they'll go ahead with this large request and maintain cohesion amongst the beliefs 33. 32 Winning Gambit: Sometimes negotiations will fall apart, just as they're about to wrap up. Usually it will be for trivial reasons, and sometimes it can even be for reasons that neither you or the seller or even aware of. For instance, maybe you find yourself dealing with an inexperienced, dictator style negotiator. This person has told their friends, their family or their boss that they're gonna get a terrific deal and not to leave anything on the table. And they're gonna look like a hero after they have met with you. They find that they can't manipulate you, and now their ego is gonna get in the way. When you're at the end of negotiation and we're going to get the sense that someone's ego is threatening the deal, what you want to do is make a concession. You need to go overboard. In fact, it could be a consistent that you're planning on giving them anyway, just a long as you get that concession out there. Before they turn the negotiation into a kamikaze situation, you'll be able to relieve that ego able to relieve that tension and make them feel as though they've won at the end of your negotiation as the good cup. You might want to say something like Justus. I thought they didn't go for your proposal is requested. I did, however, mention your situation to them. When I was able to do was to increase that amount that we're gonna pay upfront from 20,000 to 28,000. This should give you enough to carry things forward and give you a little bit of breathing space for the following month. What you're doing here is you're relieving the possibility of them going kamikaze on you by giving them more than they expected to get. This gesture will stroke their ego a little bit and invoke the law of reciprocity, making sure that they'll see the deal towards the end because you worked with them. 34. 33 Section 7 Exercise: And now for the exercise for this section, please find the reference to this pdf attached in this lesson here, we're gonna give you three scenarios and what I want you to do is to find ways in which you can nibble for more in each one of them. 35. 34 Negotiation Is A Skill: you have just been bombarded with a tremendous amount of content. And even if you could remember everything and recall it as the need arises, chances are you're not gonna walk away from your desk today. As an expert negotiator, negotiation is a skill, and just like every other skill, it'll start off maybe a little bit rocky and with more and more practice in overtime, you'll become more proficient at it. People always underestimate what can be accomplished in the long term and overestimate what I accomplished in the short term. Don't fall victim in that trap. The good news is that there's no such thing as a day without negotiation. There are so many opportunities for you to look for symptoms of pressure points in business is that you walk into every day you conspire. The different negotiation style is based on how people engage with one another. You could monitor your own cognitive biases, and you can use the different gambits in your day to day negotiations with people moving forward. I encourage you to get into the habit of becoming interested in people. See if you can't find out what their problems are and what kind of creative solutions you could bring up to solve those problems. This is the crux of negotiation. You'll find that the more interested you are in people, the more interesting they'll become. And if you find that you're solving these problems, you're gonna find more problems to solve. Make negotiation your default habit. You're gonna build it up now. So when the time arises, you'll have all the intuitions you need. And you'll have the information you learned here today to refer to as well in the future to apply to a win win negotiations for yourself, your company and for the opponent. 36. 35 PDCA Model Of Development: after you got this habit of building in negotiation in your day to day life, do with professional athletes. Do and take on the plan. Do check. Adjust model P. D. C. A. I always find it fascinating that you'll have, on one hand the stereotype of the dumb jock. Yet on the other, when you watch them in their game, they are geniuses. Now. Talent isn't the answer. I can't tell you how many stories are of the talented loser or the loss potential. This is not the answer. The answer is P D. C. A. Professional athletes know how to use this to become masters in their craft. Here's how professional athletes do this. First they have their plan, so they have a goal they want to reach. They know where they're at now, and they know where they want to go. The plan is what fills in this gap, and usually what they do is the work with a coach the coach is gonna tell in the different habits. They have to create a different exercising to go through and the routines, eating schedules and all this different kind of stuff after they get the plan together professional athletes just do it. This is the do portion. They act on these behaviors, and they create the habits through all these routines that their coaches told them about next. They want to check everything they've been doing because they want to make sure that what they're doing is leading them closer to their goals and not away from it. So when they have a game, for instance, the whole game is monitored and they're able to review the performance afterwards, they can check and see if they're following their plan. Lastly, what they do, of course, is they adjust. So if they find that based on the game, when they've checked it, that they're doing all the behaviors they want in their get the results they want, what they do is they adjust. They increase the intensity to become even better. And if they of course, don't find the results they want, they go back and they have to make sure that they figured out what part of that plan went wrong or what part of that behavior went wrong. That's all part of that checking process. So that's the PDC a model plan. Do check, adjust all professional athletes do this and I mean professionals because not all athletes do this. Onley pros do it, They become masters of their craft, and they continue on with their mastery well into the rest of their career plan. Do check, Adjust. I encourage you to keep a journal or a log so you can track your progress in your career. As a negotiator, you'll use this journal log two P. D. C. A. Or write down your plan. You're gonna perform your plan, and you're gonna check that and adjusted where necessary. What you should do is in every one of your conversations, record it, getting audio recording of it. Take notes on how you did and see the things that you like, things that you didn't like. That maybe the direction of the negotiation that it took because you intended to or didn't intend to. Whatever you could do, make notes on these. This is gonna be your checking part of your doing process after you get this bit of habit down. I mean, I know it's a little bit tough at first, but when you keep hammering at it, I guarantee you it will greatly increase. Your chances of success is negotiator because you'll have the plan. Do check adjust model on your side 37. 36 Build Momentum & Stay Motivated: Zig Ziglar, the famous author and speaker, has a great quote. He says that people say that motivation doesn't last well, neither does bathing. That's why I recommended daily one of the best and easiest ways for you to stay motivated is to turn your car into a university on wheels. So rather listen to the radio, which is really just advertisements and songs you already know. Try listening to personal development material. There's lots of great speakers out there, and there's no end to it. There's also podcast that you can subscribe to and download if you're in that kind of thing . I'm a little school, so I do the CDs still in the car. But that's what works for me. Not only will this influence your mood and make you feel great, but you'll get to see how these different thinkers use creativity, positive thinking, to change their lives and also lives Their clients remember, too, that life is constantly in motion. There's always a momentum, and you're either going with afford momentum or a back of momentum, and you're never staying. Still, negotiation is a skill. It takes time, and it will push you outside of your comfort zone a little bit, so you may experience sometimes of frustration, maybe even a little bit of embarrassment. You make mistakes. It's bound to happen. But just like every other skill, you're gonna get better with it over time. What's important to remember is that you have to keep yourself emotionally engaged with this vision. This new direction you're going with getting better as negotiator, celebrate all of your winds, even the small ones, and keep yourself emotionally charged up because vision keeps you moving in a forward momentum. 38. 37 Conclusion A Short Story: well, that brings us to the end of negotiation fundamentals. In this programme, I presented how, using the diplomatic style negotiation, you can lead your opponent emotionally with a vision toward a win win resolution. You learn how to get power negotiation by communicating in the cellar that you have more options than they do and by leveraging the cognitive biases in the four different pressure points time, financial, informational and psychological. You also discovered the five negotiation styles you're gonna come across, along with the different stages of negotiation and the techniques that you can apply to turn average deals into great deals that are win win for you and your opponent. I want to end this program with a short story. There's two brothers and a pop bottle. They're fighting over it, and in the heat of this battle, they end up calling each other really mean names. This leads to a wrestling match, with one trying to dominate the other, trying to get control over this prized possession. The fight is so rambunctious that the mother enters the scene and becomes involved in the negotiation. Here. She separates the boys and says, What on earth do you two Think you're doing? Let me show you how to share. She opens the pop, pours two glasses, totally even and handed to the boys. One of the boys proclaims, I don't care about the pop. I want to take the ball on recycling for five cents. The other boy says, You dummy. The prize in the cap is worth Maurin five cents. The mother seeing the situation for what it really is, applies a little bit of diplomacy, which she does that she takes the two glasses and consolidates in the one, takes the cap of the pop bottle and give it to her one son. She gives the empty bottle to the other and then ask. Now, does everybody have what they want? Both boys not in agreement. One chugs down the pop, the other one scoots off to the recycling plant, and everybody's happy. Many negotiations end up in unnecessary conflict and compromise. The reason is that both parties involved can't seem to find a way to work creatively and collaterally towards a solution that works for everyone. Put yourself in your opponent shoes. Think for a minute about what they're going through and find out really what the situation is by asking questions and gathering information. Successful negotiations come about through agreement. I want to thank you for allowing me to be your instructor for the duration. This program. I trust that the information contained here will serve you well today and in the years to come. I encourage you today and every day to practice what you've learned here to ensure that you will be successful negotiator in the future. Bye for now.