The 20 Rules of Negotiation
What is negotiation?
Negotiation is the process of reaching an agreement with another party through communication and persuasion. Negotiation is a vital skill for personal and professional success, as it helps us to achieve our goals, resolve conflicts, and build relationships. However, negotiation is not always easy or effective, as it can be influenced by various factors, such as the interests, emotions, and power of the parties involved. Therefore, it is important to follow certain rules and strategies to negotiate efficiently and ethically. Here are the 20 rules of negotiation, based on some of the web search results that I found, and some imaginary examples to illustrate them.
One of the first rules of negotiation is to avoid negotiating unless you have a good reason to do so. Negotiating can be time-consuming, stressful, and risky, and it may not always result in a satisfactory outcome. Therefore, before entering a negotiation, you should consider whether you have a clear goal, a strong alternative, and a legitimate authority to negotiate. If not, you may be better off accepting the existing offer, walking away, or seeking another solution.
Example:
Alice wants to buy a car from Bob, who is asking for $20,000. Alice thinks that the price is too high, but she does not have a clear budget, a good alternative, or a strong bargaining position. She decides not to negotiate with Bob, and instead looks for other car dealers who offer better deals.
Rule #2: Never negotiate with yourself
Another key rule of negotiation is to never negotiate with yourself. This means that you should not lower your expectations, make concessions, or reveal your weaknesses before or during the negotiation. Negotiating with yourself can undermine your confidence, credibility, and leverage, and it can encourage the other party to demand more from you. Therefore, you should stick to your position, focus on your interests, and wait for the other party to make the first move or respond to your proposal.
Example:
Charlie wants to sell his house to David, who is offering $300,000. Charlie thinks that the offer is too low, but he is afraid of losing the deal. He decides to negotiate with himself, and lowers his asking price to $280,000, hoping that David will accept it. However, David sees this as a sign of weakness, and asks for more concessions from Charlie.
Rule #3: Never accept their first offer
A third rule of negotiation is to never accept their first offer. This means that you should not agree to the terms or conditions that the other party initially proposes, as they are likely to be unfavorable or unrealistic. Accepting their first offer can make you lose value, opportunity, and respect, and it can prevent you from exploring other options or creating value. Therefore, you should always counter their first offer, ask for more information, or propose alternatives.
Example:
Eve wants to buy a painting from Frank, who is asking for $10,000. Eve thinks that the painting is worth much more, and she is tempted to accept the offer, as it seems like a bargain. She decides not to accept the first offer, and instead asks Frank for more details about the painting, such as its origin, history, and condition. She also suggests other ways to make the deal more attractive, such as a payment plan, a warranty, or a discount for buying more paintings.
Rule #4: Never make the first offer (if you can avoid it)
A fourth rule of negotiation is to never make the first offer, if you can avoid it. This means that you should not be the first one to suggest a price, a deadline, or a solution, as it can limit your bargaining range, expose your intentions, and weaken your position. Making the first offer can also make you vulnerable to anchoring, which is the tendency to rely too much on the first piece of information that is presented. Therefore, you should always try to get the other party to make the first offer, or at least do your research and prepare a realistic and reasonable offer.
Example:
George wants to sell his laptop to Harry, who is looking for a good deal. George does not know how much to ask for, but he is eager to make the sale. He decides to make the first offer, and asks for $500, hoping that Harry will accept it. However, Harry is not impressed, as he knows that the laptop is worth much more, and he has seen similar laptops selling for $800. He decides to use George's offer as an anchor, and offers $400, hoping that George will lower his price.
Rule #5: Listen more and talk less
A fifth rule of negotiation is to listen more and talk less. This means that you should pay attention to what the other party says, how they say it, and what they don't say, and show interest and respect. Listening more and talking less can help you understand the other party's needs, motivations, and concerns, and identify their strengths and weaknesses. It can also help you build rapport, trust, and cooperation, and avoid misunderstandings and conflicts.
Example:
Isabella wants to buy a dress from Jane, who is running a boutique. Isabella likes the dress, but she is not sure if it fits her style, size, and budget. She decides to listen more and talk less, and asks Jane open-ended questions, such as "How did you choose this dress?", "What are the benefits of this fabric?", and "How can I accessorize this dress?". She also nods, smiles, and makes eye contact with Jane, and acknowledges her answers. Jane feels that Isabella is genuinely interested and respectful, and she is more willing to share information and offer suggestions. She also feels more confident and comfortable, and she is more likely to give Isabella a good deal.
Rule #6: Never give free gifts
A sixth rule of negotiation is to never give free gifts. This means that you should not offer something of value to the other party without getting something in return, such as a concession, a commitment, or a favor. Giving free gifts can reduce your leverage, devalue your offer, and create a sense of entitlement or expectation. Therefore, you should always make your offers conditional, reciprocal, and proportional, and use them as a means to create value and reach a win-win outcome.
Example:
Kevin wants to buy a guitar from Laura, who is asking for $1,000. Kevin thinks that the price is reasonable, but he wants to get a better deal. He decides to give Laura a free gift and offers to pay $900 in cash, hoping that Laura will appreciate his generosity and accept his offer. However, Laura sees this as a sign of desperation and asks for more benefits from Kevin, such as a case, a strap, or a tuner.
Rule #7: Always watch for the salami
A seventh rule of negotiation is to always watch for the salami. This means that you should be aware of the tactic of slicing, which is when the other party asks for small and seemingly insignificant concessions, one after another, until they get what they want. Slicing can make you lose more than you realize, and it can erode your trust and confidence. Therefore, you should always keep track of the concessions you make, set limits and boundaries, and ask for something in return.
Example:
Lisa wants to sell her bike to Mark, who is offering $200. Lisa thinks that the offer is fair, but she wants to get more money. She decides to use the slicing tactic, and asks Mark for small and additional concessions, such as $10 for the helmet, $5 for the lock, $3 for the bell, and $2 for the basket. Mark agrees to these requests, thinking that they are not a big deal. However, he ends up paying $220 for the bike, which is more than he intended to.
Rule #8: Don't fall for the rookie's regret
An eighth rule of negotiation is to don't fall for the rookie's regret. This means that you should not second-guess yourself or feel dissatisfied after reaching an agreement, as it can make you doubt your skills, regret your decisions, and damage your relationships. Rookie's regret can be caused by various factors, such as lack of information, unrealistic expectations, or emotional attachment. Therefore, you should always evaluate the agreement objectively, celebrate your achievements, and learn from your experience.
Example:
Mike wants to buy a watch from Nancy, who is asking for $500. Mike thinks that the watch is worth less, but he likes it very much. He decides to accept Nancy's offer, and pays $500 for the watch. However, he feels unhappy and regretful after the deal, as he thinks that he paid too much, that he could have negotiated better, or that he could have found a better watch elsewhere. He blames himself and Nancy for the outcome, and loses his confidence and trust.
Rule #9: Negotiate with integrity
A ninth rule of negotiation is to negotiate with integrity. This means that you should be honest, respectful, and ethical in your communication and behavior, and follow the rules and norms of the negotiation context. Negotiating with integrity can help you maintain your reputation, credibility, and self-esteem, and foster long-term and mutually beneficial relationships. Therefore, you should always avoid lying, cheating, or manipulating, and treat the other party as you would like to be treated.
Example:
Olivia wants to sell her book to Paul, who is looking for a good read. Olivia knows that the book has some flaws, such as typos, errors, and missing pages, but she does not disclose them to Paul. She decides to lie, cheat, and manipulate, and asks for $50 for the book, hoping that Paul will not notice the defects. However, Paul discovers the truth, and feels angry and betrayed. He accuses Olivia of being dishonest, unprofessional, and unethical, and refuses to buy the book or deal with her again.
Rule #10: Learn and improve
A tenth rule of negotiation is to learn and improve. This means that you should always seek feedback, reflect on your performance, and identify your strengths and weaknesses. Learning and improving can help you enhance your knowledge, skills, and confidence, and achieve better results in future negotiations. Therefore, you should always ask for suggestions, review your outcomes, and apply your lessons.
Example:
Rachel wants to buy a sofa from Steve, who is asking for $800. Rachel thinks that the sofa is worth less, but she does not have much experience in negotiating. She decides to learn and improve, and asks her friend, who is a skilled negotiator, to accompany her and give her advice. She also reviews the negotiation process and outcome, and identifies what she did well and what she could improve. She learns from her mistakes and successes, and becomes a more competent and confident negotiator.
Rule #11: Use silence as a tool
An eleventh rule of negotiation is to use silence as a tool. This means that you should not feel obliged to fill every gap in the conversation, as it can make you reveal too much information, lose focus, or agree to something you don't want. Silence can be a powerful way to create pressure, show confidence, and elicit a response from the other party. Therefore, you should use silence strategically, such as when you want the other party to make the first offer, when you want them to justify their position, or when you want them to reconsider their offer.
Example:
Sarah wants to buy a necklace from Tom, who is asking for $200. Sarah thinks that the price is too high, but she does not want to offend Tom. She decides to use silence as a tool, and does not say anything after Tom makes his offer. She just looks at him calmly and waits for him to speak. Tom feels uncomfortable and nervous, and wonders if Sarah is interested or not. He decides to break the silence, and lowers his price to $180, hoping that Sarah will accept it.
Rule #12: Use questions as a weapon
A twelfth rule of negotiation is to use questions as a weapon. This means that you should ask smart, open-ended, and probing questions to the other party, as they can help you gather information, test assumptions, expose weaknesses, and challenge arguments. Questions can also help you control the direction and pace of the negotiation, and make the other party think and talk more. Therefore, you should use questions effectively, such as when you want to clarify something, when you want to explore options, or when you want to persuade the other party.
Example:
Ben wants to sell his camera to Anna, who is offering $300. Ben thinks that the offer is too low, but he does not want to reject it outright. He decides to use questions as a weapon, and asks Anna why she is interested in his camera, what features she is looking for, and how she plans to use it. He also asks her how she came up with the offer, and what other cameras she has considered. Ben uses these questions to understand Anna's needs, preferences, and alternatives, and to show her the value and benefits of his camera. He also uses them to make Anna justify and reconsider her offer, and to persuade her to pay more.
Rule #13: Use emotions as a tool
A thirteenth rule of negotiation is to use emotions as a tool. This means that you should be aware of your own and the other party's emotions, and use them to your advantage. Emotions can have a positive or negative impact on the negotiation, depending on how they are expressed and managed. Positive emotions, such as happiness, excitement, and gratitude, can enhance trust, cooperation, and creativity. Negative emotions, such as anger, frustration, and fear, can reduce trust, cooperation, and creativity. Therefore, you should use emotions wisely, such as when you want to build rapport, when you want to motivate the other party, or when you want to influence the other party.
Example
Emma wants to buy a ticket to a concert from Ryan, who is asking for $100. Emma thinks that the price is reasonable, but she wants to get a better deal. She decides to use emotions as a tool, and expresses her enthusiasm, appreciation, and curiosity to Ryan. She tells him how much she loves the band, how grateful she is for his offer, and how curious she is about his experience at the concert. She also shows some disappointment, hesitation, and concern about the price, and asks him if he can lower it a bit. Ryan feels flattered, respected, and empathetic, and he is more willing to negotiate with Emma and give her a discount.
Rule #14: Use time as a tool
A fourteenth rule of negotiation is to use time as a tool. This means that you should be aware of the time factor, and use it to your advantage. Time can have a positive or negative impact on the negotiation, depending on how it is used and perceived. Time can create urgency, pressure, and deadlines, which can motivate the parties to reach an agreement quickly. Time can also create delay, patience, and flexibility, which can allow the parties to explore more options and create more value. Therefore, you should use time strategically, such as when you want to speed up or slow down the negotiation, when you want to create or reduce tension, or when you want to leverage or avoid deadlines.
Example:
Jack wants to sell his bike to Lily, who is offering $150. Jack thinks that the offer is fair, but he wants to get more money. He decides to use time as a tool, and tells Lily that he has another buyer who is interested in his bike, and that he needs to make a decision by tomorrow. He also tells her that he likes her better, and that he is willing to give her the first option. He hopes that this will create a sense of urgency and competition for Lily, and that she will increase her offer. However, Lily does not fall for Jack's trick, and tells him that she is not in a hurry, and that she is happy to wait until tomorrow. She also tells him that she has other options, and that she is not willing to pay more than $150. She hopes that this will create a sense of patience and flexibility for Jack, and that he will accept her offer.
Rule #15: Use leverage as a tool
A fifteenth rule of negotiation is to use leverage as a tool. This means that you should use your sources of power and influence to gain an advantage over the other party. Leverage can come from various factors, such as your alternatives, your authority, your expertise, your reputation, or your relationships. Leverage can help you persuade, pressure, or reward the other party, and make them more likely to agree to your terms. Therefore, you should use leverage wisely, such as when you want to make a strong offer, when you want to overcome resistance, or when you want to close the deal.
Example:
Sam wants to buy a software from Tina, who is asking for $5,000. Sam thinks that the price is too high, but he does not have many options. He decides to use leverage as a tool, and tells Tina that he is a well-known blogger, who can write a positive review of her software and promote it to his followers. He also tells her that he has a large network of contacts, who might be interested in buying her software as well. He hopes that this will make Tina see the value of his offer, and lower her price.
Rule #16: Use creativity as a tool
A sixteenth rule of negotiation is to use creativity as a tool. This means that you should use your imagination and innovation to generate new ideas and solutions that can benefit both parties. Creativity can help you overcome impasses, create value, and satisfy interests. Creativity can also help you differentiate yourself from the competition, and make your offer more appealing and unique. Therefore, you should use creativity effectively, such as when you want to expand the pie, when you want to find a win-win outcome, or when you want to make a memorable impression.
Example:
Zoe wants to sell her painting to Alex, who is offering $1,000. Zoe thinks that the offer is too low, but she does not want to lose the sale. She decides to use creativity as a tool, and offers Alex a package deal, which includes the painting, a personalized signature, a video of her painting process, and a one-hour online session with her. She also offers Alex a referral bonus, which gives him a 10% discount on his next purchase, if he introduces a new customer to her. She hopes that this will make Alex see the value and uniqueness of her offer, and increase his offer.
Rule #17: Use collaboration as a tool
A seventeenth rule of negotiation is to use collaboration as a tool. This means that you should work with the other party as a partner, rather than as an opponent, and seek mutual gains and benefits. Collaboration can help you build trust, rapport, and understanding, and foster a positive and cooperative atmosphere. Collaboration can also help you share information, resources, and risks, and achieve better and more sustainable results. Therefore, you should use collaboration constructively, such as when you want to establish a long-term relationship, when you want to solve a complex problem, or when you want to create a joint vision.
Example:
Max wants to buy a car from Amy, who is asking for $15,000. Max thinks that the price is fair, but he wants to get a good deal. He decides to use collaboration as a tool, and tells Amy that he is looking for a reliable and comfortable car, and that he likes her car very much. He also tells her that he has a limited budget, and that he needs some extra features, such as a GPS, a stereo, and a sunroof. He asks Amy if she can help him find a way to meet his needs and goals, and suggests some possible options, such as a trade-in, a loan, or a discount. He hopes that this will make Amy see him as a partner, and work with him to find a mutually beneficial solution.
Rule #18: Use humor as a tool
An eighteenth rule of negotiation is to use humor as a tool. This means that you should use appropriate and relevant jokes, anecdotes, or stories to lighten the mood, break the ice, or make a point. Humor can help you reduce stress, tension, and boredom, and increase enjoyment, energy, and motivation. Humor can also help you connect with the other party, show your personality, and make your message more memorable and persuasive. Therefore, you should use humor carefully, such as when you want to create rapport, when you want to diffuse conflict, or when you want to emphasize a key point.
Example:
Mia wants to sell her bike to Leo, who is offering $100. Mia thinks that the offer is too low, but she does not want to offend Leo. She decides to use humor as a tool, and tells Leo a funny story about how she bought her bike from a clown, who gave her a balloon and a pie in exchange. She also tells him that her bike has a special feature, which makes it play a funny sound when she brakes. She hopes that this will make Leo laugh, relax, and appreciate her bike more. She also hopes that this will make him see her as a friendly and humorous person, and be more willing to negotiate with her.
Rule #19: Use empathy as a tool
A nineteenth rule of negotiation is to use empathy as a tool. This means that you should try to understand and appreciate the other party’s feelings, thoughts, and perspectives, and show them that you care and respect them. Empathy can help you gain insight, trust, and rapport, and reduce hostility, resentment, and misunderstanding. Empathy can also help you address the emotional and psychological needs of the other party, and make them feel valued and satisfied. Therefore, you should use empathy sincerely, such as when you want to acknowledge emotions, when you want to resolve disputes, or when you want to build relationships.
Example:
Jake wants to buy a guitar from Lily, who is asking for $500. Jake thinks that the price is reasonable, but he wants to get a better deal. He decides to use empathy as a tool, and tells Lily that he understands how much she loves her guitar, and how hard it must be for her to sell it. He also tells her that he shares her passion for music, and that he admires her talent and style. He hopes that this will make Lily feel understood, respected, and appreciated, and be more open and cooperative with him. He also hopes that this will make her see him as a fellow musician, and be more flexible and generous with him.
Rule #20: Use feedback as a tool
A twentieth rule of negotiation is to use feedback as a tool. This means that you should give and receive constructive and honest feedback to the other party, and use it to improve your performance and outcome. Feedback can help you identify your strengths and weaknesses, correct your mistakes, and learn from your experience. Feedback can also help you recognize and appreciate the other party’s efforts, achievements, and contributions, and make them feel motivated and rewarded. Therefore, you should use feedback positively, such as when you want to evaluate the process, when you want to celebrate the result, or when you want to learn and improve.
Example:
Anna wants to sell her book to Ben, who is offering $20. Anna thinks that the offer is too low, but she does not want to lose the sale. She decides to use feedback as a tool, and asks Ben for his opinion on her book, and what he likes and dislikes about it. She also tells him what she thinks of his offer, and what she expects and hopes for. She hopes that this will make Ben give her honest and constructive feedback, and help her improve her book and offer. She also hopes that this will make him see her feedback as helpful and respectful, and help him improve his offer and satisfaction.
Conclusion
Negotiation is a skill that can be learned and improved with practice. It involves understanding the interests and needs of both parties, finding common ground, and creating value for everyone involved. Negotiation is not a zero-sum game, where one side wins and the other loses. Rather, it is a collaborative process that aims to achieve a win-win outcome.
Some of the rules of negotiation that can help you achieve this goal are:
PREPARE well before the negotiation, by doing your research, setting your goals, and anticipating the other side's position and arguments.
LISTEN actively and empathetically to the other side, by asking open-ended questions, paraphrasing, and acknowledging their emotions and concerns.
COMMUNICATE clearly and respectfully, by using positive language, avoiding assumptions and accusations, and expressing your interests and needs.
FOCUS on the problem, not the person, by separating the people from the issue, avoiding personal attacks, and finding areas of agreement.
BE CREATIVE and flexible, by generating multiple options, exploring trade-offs, and finding ways to add value for both sides.
KNOW YOUR BATNA (Best Alternative To a Negotiated Agreement), by having a clear idea of what you will do if the negotiation fails, and being ready to walk away if the deal is not satisfactory.
By following these and other rules of negotiation, you can improve your chances of reaching a mutually beneficial agreement that satisfies both parties. Negotiation is not a one-time event, but a continuous process that builds trust and relationships. Therefore, it is important to follow up after the negotiation, by honoring your commitments, providing feedback, and maintaining communication.