Aggressive is Not Good – Unless Used Strategically
A common mistake negotiators make is asking for everything they want at the beginning of the negotiations. This aggressive approach is tantamount to forcing your counterpart to eat an entire elephant in one bite. They’ll be offended and suspicious and likely walk away from negotiations. From their perspective, you’re too difficult and, since they haven’t spent a moment negotiating with you and they haven’t invested time and resources into you or your client, you’ve given up the other negotiation tactic – the sunk cost gambit. The better approach is to deliver the elephant in something smaller than a bite – nibbles.
What is Nibbling?
The Nibbling Tactic is used at the end of negotiations when the deal is almost finalized. Your counterpart is thrilled that the deal is about to close and they’ve made up their mind to buy, sell or lease. Since people like be consistent with their actions and hate “losing” time spent on negotiations, they’re likely to stay the course even if they have to give up earlier demands. At this point – right before you sign the agreement – start asking for a few concessions.
For example, you’re about to buy a car and sign the purchase agreement. As your pen hovers you say “this comes with a full tank of gas, right?”. The sales person will likely agree because: they feel like they’ve already made the sale and have a positive attitude, which makes people more likely to give things away. Not to mention the thought we’ve all had: “we’re so close, what’s a few bucks to close the deal?”. Had you asked for everything upfront, however, I can promise you that you would have to have given up the gas tank request in order to shave off a few dollars on the purchase price.
Warning: Use the tactic only after commitment is clear
This tactic works because people are less anxious and confrontational after they’ve made a decision to buy, sell, lease or gamble. A study at a Canadian racetrack showed that people who hadn’t yet placed a bet were anxious and unsure about what they were about to do (i.e. gamble). Once people had made the decision to bet, this anxiety dissipated and they felt good about their decision to gamble. In fact, once they continued on the course of their decision they reinforced their actions by gambling even more! The same behaviour applies in negotiations. You have to coax your counterpart into the negotiations and convince them to close the deal. Once it’s clear that the deal is going to be done, ask for a concession. Your counterpart will likely give in to reasonable-ish requests to keep the deal alive and to be consistent in behaviour (I’ve acted committed this far, I can’t turn back now!).
Prevent your counterpart from nibbling on you
The problem with the nibbling tactic is that it can happen to you too! These simple tips will help you avoid this outcome:
- Write down a list of all of the concessions you’ve already made and show them that you’ve sacrificed a lot to get to this point
- Counter with a causal nibble – “what about the return policy, let’s make it 90 days”.
- With a big smile say, “Oh, come on! You’ve negotiated a great deal already, don’t make us give up everything and go red on this deal!” Make your opponent feel cheap, but in a joking way.
- Negotiate all of the details important to your counterpart up front, but don’t make any demands until the end.
And, when in doubt as to timing or aggressiveness of your request, just say it with a smile.