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15 Rules of Negotiation (Skills & Tactics)

22 November 2020

Hello Aluxers and welcome back to a special Sunday motivational article which you’re gonna love, because you’ll get to test-run the information immediately in both your personal and professional life as we’re taking a look at rules of negotiation.

Every interaction you have is more or less a negotiation for a desired outcome. From asking your crush out on a date, to signing a multi-million dollar client, it all boils down to your skill set.

Fundamentally, you can negotiate anything if you know the following 3 things:

  1. exactly what you want,
  2. how little you’re willing to accept, and
  3. what you’ll do if the deal doesn’t work out.

Everything else we will be discussing is just here to support these 3 things and give you the biggest edge you can get.

If you prefer visual content over text, here’s the video version of this article:

With that said, here are the 15 most valuable negotiation skills and tactics!

1

Figure Out What You Really Want or You’re Gonna Lose

You would not believe just how many people get into negotiable situations without having a clear understanding of what they REALLY want and having a way to clearly put it clearly into words.

Here’s a very common situation:

“Ohh you want to earn more per month?”

“sure.. Here’s 20% more work for you to do and we’ll increase your pay by 20%” “we’ve given you just what you asked for”.

But that wasn’t what you wanted was it?!

You see.. There’s another important rule in life that goes like this:

You don’t get what you want in life, you get what you’re willing to negotiate.

And for you to negotiate effectively, you need to have a clear understanding of what you want specifically and what you’re willing to exchange in order to get it.

2

Negotiate EVERYTHING

We personally negotiate everything and you’ll find out that most rich people do the same. There’s never a circumstance where the rich won’t try to get a better deal, because historically they’ve always been offered one when they asked for it.

Another big rule is:

If you don’t ask, you don’t get!

Starting today, everywhere you go ask for a better deal. Without doing anything you’re likely to get a 5 to 10% discount just because you asked for it, which otherwise you would’ve spent out of pocket.

We negotiate cars, jewelry, business deals, terms, even in everyday shops. We got big discounts in both Luxury stores and commercial ones like Zara just because we were willing to pay cash.

As a pro tip, always ask the person who is able to make this kind of decision:

What can you do to get me a better deal?

Or if you’re talking to a clerk, have them reach out to the person who’s able to make those kinds of calls and get back to you.

3

The One Who Prepares More Wins

By this point we expect you to have made and effort and figure out what YOU want from an upcoming negotiation, so it’s time to take it a step further.

Ask yourself the following questions:

Who are you going to negotiate with?

Is this the person who is able to make the kind of decision you’re looking for? – another pro tip: the boss will always be more flexible than middle management.

What is this person like? What are their values? What do they look for in a partner?

What is important to them?

What do they expect to get out of this negotiation?

What is negotiable and what isn’t?

What is there for them to lose if this doesn’t work out?

How can you come up with a creative way to get both of you what you want?

This is an old WAR STRATEGY that comes into play in everyday life all the time. The tale goes like this:

When two generals go to war, both of them are trying to simulate what the other general will do on the battlefield. The one who is closer to the truth wins!

This is why preparation is so important!

Here’s something important every one of you should know:

If you realize you’re not adequately prepared to negotiate, it’s okay to reschedule and walk away.

The worst thing you can do is go to war without being properly prepared. You’ll just get slaughtered.

4

Mirroring Works, Until It Gets Creepy

We know you guys are interested in secret techniques and tactics so this one’s actually pretty efficient.

All negotiation is, is listening to the other side and building enough trust that you can move forward in the relationship: be it personal or professional.

This technique focuses on starting your sentences the same way the other person finishes theirs in order to build a report. Make sure to use the key words that they used in their speech.

This is commonly known as mirroring and people have been using it in both verbal and non verbal communication

Begin your sentence with the last 3 words and then add what you’re going after.

All mirroring does is signal the other person that you two are very much alike and will get along great. It’s no rocket science that people are more likely to engage with those they find similar in nature.

Here’s a pro tip we really want you to know:

Do not overuse specific techniques!

People pick up when you’re doing something on purpose and it’s a major red flag. Just because you’ve once read in a book that you should look a person in the eye when talking to them, it’s more than ok, actually you MUST, avert your gaze away in the span of a 20 minute conversation if you don’t want to come off across as a weirdo.

Our advice is for you to practice these technique until they become involuntary and natural.

5

Tactical Empathy Is Your Most Valuable Tool

Tactical Empathy is one of those things that have changed the way negotiations are being done in the modern world.

It all boils down to making your partner feel safe, in control and build the feeling of good faith between you two.

Effective negotiation rests on building at least the perception of mutual gains.

There are specific strategies and skills you can deploy in order to get the best outcome you can get:

Here’s a list of the most important ones

  1. Demonstrate that you are negotiating in good faith. – you’re not looking to screw them over.
  2. Be genuinely interested in what drives the other side. – if you know what they’re willing to achieve you can tailor your offering to their liking.
  3. Don’t suppress emotion – use them to keep the ball rolling
  4. Deactivate negative feelings and magnify the positive ones – this slowly builds trust and will get you where you need to go.
  5. Look for tells – people will signal what they really want even if they don’t verbalize it.

We’ve learned a lot about negotiation through practice but these type of specific skills you can only find with professionals who’ve been doing this their entire lives. The ultimate book on this topic is called: Never Split the Difference and it’s written by a former FBI hostage negotiator. In our opinion it is hands down the one you should get if you’re looking to improve.

Even better, if you go to alux.com/freebook right now and sign up, you can get the audiobook version of never split the difference for free thanks to our partnership with Audible.

6

Smart People Search for Smart Trade-Offs

Always look for smart trade-offs, no matter what you do in life.

Here’s what we mean when we say smart trade-off.

There are some cases, where very little effort on your behalf could make the entire difference for someone else.

On a personal level: calling your parents or your grandparents illustrates it perfectly. It will require 10 minutes of your time and it would make their entire day.

Low effort leads to big outcomes.

You can find these in business as well if you know where to look.

One phone call or recommendation of someone you’ve worked with in the past can solve a really expensive problem for the person you’re interested in doing business with and this will carry a lot of weight in your relationship.

The smartest negotiations are those that allow you to cut down on high effort. Check out 15 Reasons Why Working Hard Is Dumb.

7

Make at Least 2 Offers at the Same Time and Have Them Pick Between Them

This is an interesting approach that helps you figure out what is the best way to approach the situation in order to get what you want out of it.

Structure the deal in 2 different ways and have the other person pick one. This will signal to you what they value more and what is the right way to win them over.

Once they pick, you have the control of the situation despite allowing them to be the ones to “call the shots”.

A very important thing to note is:

If you have the power in a negotiation, do not talk about it.

Keep your mouth shut and play the game until the end.

8

When Negotiating With People You Care About, Reputation Trumps an Ultimate Win

This takes a level of maturity to pull off.

Sometimes, winning is too expensive.

This happens in marriages all the time. Would you rather not talk to your wife for a week just to prove you were right? Probably not. You’re stupidly winning the round but losing the game!

When it comes to the reputation play, let’s say you’re dealing with someone you care about, you’re doing business with a friend or relative. Although you might have all the cards and could easily dry them out, your reputation becomes more valuable than the extent of the win, for you’re probably gonna win anyway, might as well win respectably.

This builds goodwill in your life and goodwill is important. People will recommend you because of it and the long term returns are greater than the short term win.

9

Never Let Emotions Block You From Getting What You Need

Sometimes you won’t like the person you’re negotiating with on a personal level, but you find yourself at the table because you need something.

We people are all different. We grew up in different places, have different upbringings, different levels of education and ethics. Knowing how to navigate this sea of personalities is one of the most valuable skills you can have in your arsenal.

There’s a fine line between tolerating and deciding to walk away.

We’ve learned that this line moves depending on how badly you need the result to go your way.

Ideally, emotions wouldn’t be a variable in a negotiation, facts would trump everything, numbers would do the talking and deals would close without a word spoken, but that’s not how it is.

Emotions, not logic usually determines the outcome of a negotiation.

You need to master yours and then learn to read and change your approach according to what the other side is feeling.

10

Get to “That’s Right” as Quickly as Possible

“That’s right” is a magical phrase in negotiation. It means that both parties are in agreement and that’s how successful negotiations are conducted.

The more one side agrees with the other, the more in line their objectives are, the more likely the deal is to close.

Too many people go into a negotiation not thinking about the other side or what their goals are.

Decisions come from a part of the brain that’s usually left unguarded. That’s the same spot where agreement is as well, that’s why you know deep down if you’re going to say yes or no to a proposal, it’s from within.

The more you can get someone to agree with you the more that pattern of behavior will show itself in the negotiation.

In Goal Mastery we show you step by step how to get a pay raise or negotiate with other people on how to always get what you want.. Believe it or not we give you the exact words and what to say and we can’t wait for you to try it and put it to good use this next year.

For those interested, we’re currently in post-production and we’re estimating the launch to be in the first quarter of 2021. If you’re not on the waiting list, go to alux.com/goals and be sure to leave your email there.

11

You Cut, I Pick Method

This is one of our all time favorite ways to settle disputes. It works from high end business deals to the children in your own household.

To explain it simply, it goes like this:

Let’s say you have 2 children, you are fighting over a piece of cake. They’re both fighting over it and don’t know how to share it so the other one doesn’t get more cake than they do.

The You Cut, I Pick rule, has one of the brothers cut the cake in half and the other gets to pick which side they want.

This way both parties have control over the outcome. Ideally, the brother will slice the cake perfectly in the middle, because if they try to do anything shady, they’ll lose more of their piece when the other person gets to pick.

Use it wisely!

12

Negotiation Is a Mix Between Sales & Therapy

Some people never listen… some people never ask.

In order to be a successful negotiator you need to understand both and know when to use each.

There’s a time for selling and there’s a time for listening and it just so happens that the more you listen the more you understand when is the right time to sell!

Why do people go to therapy? They already know what’s happening inside their minds.. They’re just trying to make sense of it.

That’s what happens in a negotiation. You enter a negotiation trying to figure out how to make it work and get what you want. That’s what both parties want.

You’ve met to solve a problem and the solution can benefit both parties.

Anything else than that isn’t a negotiation, it’s a hostile takeover.

Same as in therapy, asking WHY do you want something is often times more valuable than WHAT do you want.

Understanding the reasoning behind their decision will lead to creative solutions where other things get put on the table that you didn’t even consider.

When it comes to selling we have a great video titled How to sell anything that’s a 5-minute watch. Check it out.

 

13

Never Share Your Reserve Point

The reserve point is the lowest option you’d still consider taking.

All your strength lies in keeping the negotiation as far away from your reserve point as possible.

Never let people know the minimum you’re willing to take.

The more you think about negotiation the more you understand that it is simply a game between two parties that try to guess each other’s reserve point

If you can guess the other party’s reserve point, you win.

14

Never Give Anything Without Getting Something in Return

The worst thing one can do in a negotiation is give anything away for free.

Unless you’re feeling charitable, this is also true in life. Too many employees pick up additional work without asking for anything in return. That’s how you end up working so damn much and get paid so little.

There’s an old saying: “You scratch my back, I’ll scratch yours” that one should always remember when going out of their way to make something happen for someone else.

This is probably the only place where the Rule of Equivalent Exchange, mentioned in Fullmetal Alchemist applies to real life.

In order to get something, you have to give something in return.

15

Always Have a Back-up Plan

The worst thing you can do entering a negotiation is not having a back-up plan.

If you don’t have a back-up, all you’re doing is bluffing. It takes away a very powerful tool: your option of walking away!

The back-up plan even has a specific terminology in negotiation. It’s called: BATNA

BATNA stands for “Best alternative to a negotiated agreement”

This is the type of info they used to teach us at Business School btw, we never used the terminology since; but there’s some truth to it.

How good is your alternative? What kind of differentiator are we talking about? Quality? Price? Time to delivery?

You need to consider all of these. Think of it like this: if you go and ask for a raise knowing you have another job lined up at a different company if your boss says no, how does your approach differ? Would you feel in control and powerful enough to stand your ground? Sure you will.

BATNA is all about acquiring as much control on your side as possible.

Which brings us to today’s question: What’s one thing you wish to negotiate in the near future?

We’re always excited to hear from the community and we’re always blown away by the support you Aluxers show one another in the comments!