TOPIC 7.

Negotiating tactics and counter tactics

Tactics are a part of nearly every negotiation. If negotiation is a game, tactics are the
plays, the parries and thrusts. For every tactic (offensive manoeuver) there is a counter-tactic, or
defence. If you want to be a great negotiator, you will need to be familiar with a wide range of
tactics, and you must also know how to defend against them with an appropriate counter-tactic.
Negotiation is a game, and as in most games there are many different tactics and counter-
tactics. You need to be able to juggle them around and choose the best ones for any given
situation.
WHY DO WE NEED TACTICS?????
Some of the hallmarks of this style of negotiating are joint problem solving, effective
communication, trust, fairness, and maintaining healthy and mutually rewarding long-term
relationships. The relationships issue is key here because we are, in essence, negotiating with
partners rather than adversaries. With all of these high-minded ideals, you may be wondering,
“Why bother with tactics? Aren‟t tactics just a bunch of dirty tricks?”
Have you ever noticed that, in a bargaining situation, sellers tend to ask for a higher price
than they are willing to accept? And that a buyer‟s first offer is usually less than he is willing to
pay? It‟s a classic example of the old dictum „Buy low and sell high‟. This highball and lowball
opening gambit is one of the most frequently used negotiating tactics.
As this simple tactic is so common, we almost expect to encounter it whenever we
bargain. In fact, we would find it hard to believe that an opening bid could be anyone‟s true
bottom line. Consequently, when we hear the opening price stated, we naturally begin to bargain.
No doubt our counterpart would respond in the same way.
Remember, negotiation is a game. Some tactics are expected, even between such intimate
negotiating partners as husbands and wives. We are expected to use certain tactics as part of the
game.
There is another reason why you need tactics and counter-tactics. You are learning how
to become a win-win negotiator. However, your counterpart may be an old-school, adversarial
negotiator. She may use tactics against you, so it‟s important that you are able to recognise and
counter them.
Negotiation tactics are not always black and white, fair or unfair, ethical or unethical.
There is a lot of grey. You need to be prepared for whatever may come your way.
INITIAL OFFERS AND COUNTER OFFERS
As we‟ve just seen, most negotiations involve a dance around high and low opening
offers and counter offers. If you want to dance, you need to learn the steps. No one expects a first
offer to be a best offer. This is one reason why you should never accept an opening offer. You
know your counterpart is highballing or lowballing. You know you can negotiate for a better
offer, and it would be foolish not to. But there is another reason you should not accept a first
offer. It would make the other person feel he had been taken advantage of. Imagine you are at a
neighbour‟s yard sale and see a wonderful antique cabinet. You ask the owner how much, and he
replies $200. Immediately, you say “I‟ll take it!” and whip out your wallet. The seller would
have been willing to accept less after a little give and take. When you quickly agreed to his first
highball offer, he was surprised. Now, he feels that you know something he doesn‟t and got a
fantastic deal, and he is a sucker. Even though you accepted his price, he feels like he was on the
losing end of a win-lose transaction. He expected to play the game, his expectations were not
met, and he is dissatisfied. Your neighbour would probably resent you, and the bad feeling could
impact any future relationship.
On the other hand, suppose you had counter-offered $150, and ultimately agreed on $175.
You would have gotten a better deal, and the seller would feel that he got a fair price. His
expectations of haggling and meeting in the middle would have been satisfied, and he would be
happy. Never accept the first offer.

Even if you are delighted with their first offer, express some reluctance. Your counterpart will
feel better.
WHO GOES FIRST?
The opening offer and counter offer dynamic is simple to understand. More complicated
is the question of who should make the opening offer. Some people feel it is better to open the
negotiation themselves. Others advocate never making the first move. Which is correct? There is
evidence in support of both positions. Let‟s consider each approach.
Approach #1: Let the other party make the initial offer whenever possible
Your counterpart‟s initial offer might be more favourable than you expected. It might be
better than anything you would have dared to ask for. If so, good for you. But remember, don‟t
accept a first offer immediately. Haggle a bit so your counterpart feels like a winner. People are
more satisfied when they work for it.
You learn something when your counterpart makes the first offer. Regardless of whether
the first offer is high or low, it tells you something about your counterpart‟s mindset, aspirations,
confidence, and perhaps his sense of reality. It gives you a bit more information about him
before you begin bargaining. If the initial offer is not favourable, you can start bargaining. Even
if you do not like his first offer (and there is a good chance you won‟t), you can always make a
counter offer and begin bargaining. You have nothing to lose by listening, as long as you heed
the next paragraph.
If the initial offer is way out of line, dismiss it firmly but politely. Do not respond to an
unrealistic offer. Flinch) and explain that you really cannot respond to such an offer, then wait
for something more reasonable. Once you make a counter offer, you have in effect legitimised
his initial offer, which becomes an anchor point for the entire negotiation.
That first offer, combined with your counter offer, establishes a negotiating range.
Chances are that any agreement will be somewhere near the middle of that range, and how
favourable that middle figure turns out to be will depend on the first figure from your counterpart
that you respond to. As you can see, there is ample support for letting the other party make the
initial offer. Let‟s consider the alternative.
Approach #2: Make the initial offer yourself
The initial offer is a powerful anchor. It establishes one end of the negotiating range, and
thus influences the settlement price. It is to your advantage to set the initial anchor point
yourself, rather than allow your counterpart to do so. Your initial offer should be at the high end
of your aspiration range, and within or close to your counterpart‟s acceptable range. As you will
probably have to make concessions anyway, it‟s best to start from a high figure and make your
counterpart work for any concessions. Don‟t give anything away before you begin bargaining.
However, you don‟t want to start out too high. Try to set a high anchor, but a realistic
one. If you set it too high you could lose credibility, and your counterpart will resent you. Make
sure your initial offer is attractive to you and something your counterpart could conceivably
accept.
It‟s usually good practice to use an odd number. Exact figures look as if they were
calculated according to a precise mathematical formula and have an aura of permanence about
them. It is harder to dispute an odd number than a nice round figure that looks as if it was made
up without any thought.
 Imagine a salesman saying “$10,000 is my absolute bottom line.” Would you believe
him? Probably not. You‟d wonder why not $9,999.95 or $9,990? If he had said “I can‟t go a cent
below $9,987.64” you might think he had sharpened his pencil as much as possible, and you
would probably accept the figure without question.
Support your offer with reasons, but invite and be open to their counterproposal. Once
you have presented your initial offer — an odd figure from the high end of your aspiration range
— explain why that figure (which probably seems high to your counterpart) is fair. Ask him
what he thinks, and listen attentively. Wait for his counter offer and carry on from there. Just
remember that if his initial counter offer is unrealistic, do not allow it to take hold as an anchor
point.
There are certain situations where it is especially advantageous for you to make the first
offer. If it is a complicated negotiation with many elements other than price, your proposal
becomes the benchmark. Your counterpart may use your proposal as the basis for future
discussion, a reference for comparison with his own ideas. Your offer sets the tone for the
negotiations that follow.
Other tips for making offers and counter offers
 Do not appear too eager for a deal. If the other party senses you want it badly, she will
make you pay dearly for it.
 Do not get emotional about the subject of the negotiation, for example, a house or a car.
Remember, there are plenty of fish in the sea. Focus on your objective of getting what you want
at a fair price and on good terms.
 Do not make a counter offer too quickly. A counter offer is a rejection of the previous
offer. People take rejection personally. When the rejection is immediate and without apparent
thought, it can be taken as a sign of
 disrespect. Take some time to think about every offer, especially when it is a complicated
proposal rather than a simple price. People like their ideas to be taken seriously.
 Give reasons when making a counter offer. Tell the other party what you like about their
offer and what you would like to change, and why. People like to know why.
 Be prepared for any response, and control your reaction. You never know what the other
party might say or do. Whatever the response, maintain your composure. Wear your poker face.
 Get offers and counter offers in writing. Putting it in writing makes your offer seem more
official and persuasive. People take written words and figures more seriously than spoken ones.
Writing also protects against memory lapses, genuine or otherwise.
 ANCHOR POINTS IN USING NEGOTIATION TACTICS
The first offer in a negotiation and the ensuing counter offer serve as anchor points.
These are reference points that we use because we like to make comparisons. We use them as
starting points when considering whether to accept an offer or what counter offer to make.
Other references also serve as anchor points. The list price of an item at retail is perhaps
the best known. Have you ever been impressed with an item‟s „sale‟ price as compared with its
regular price? Taken on its own, a sale price may not be attractive by any objective standard, but
when compared with a higher figure it looks appealing.
A list price, a bid price, the price of a similar item, or a previous price for a similar or
identical item can also be seen as anchors. An anchor draws us to an arbitrary figure and makes
the eventual settlement price appear more attractive by comparison.
We use references and comparisons as short cuts. However, if you‟ve ever walked down
a dark alley late at night you know that short cuts can be dangerous. By relying on an anchor
point, we suspend our objectivity. And we do rely on anchor points all the time, even if they
have no basis in reality. A number thrown out at random, completely unrelated to the subject of
the negotiation, can affect the settlement price in the negotiation. And while you may make some
correction when evaluating anchor points, it is commonly not enough. The important thing is to
understand how anchor points work, and be vigilant against their effects. This example may help.
Study case
Imagine you are on holiday on some exotic tropical island. A local approaches you in the market
with a string of beads made by the natives. “Good morning sir. Would you like to buy this
beautiful necklace? The usual price is $30, but for you, only $15.” Yo u might think you’re
getting a huge discount and take it. Or you might remember that you should never accept a first
offer, and make a counter offer of $10. In that case, you may end up buying the necklace for
about $12 or $13. Or you might counter of fer $5, in which case you would probably end up
paying about $10 if you decide to buy it. If the initial pitch had been “Usual price is $30, but for
you, only $20,” you would have paid more, depending on your counter offer. The price you
agree on is a function of the anchor points.
Our discussion of initial offers, counter offers and anchor points yields a few rules:
 Always ask for more than you expect to get.
 Always offer less than you think the other party will accept.
 Never accept the first offer.
 Be aware of a nchor points, and don‟t let your counterpart set an unrealistic anchor.

Anchor points determine the negotiating range and influence the settlement price
 EXAMPLES OF NEGOTIATION TACTICS
1. The flinch
The flinch is another classic manoeuvre that we all expect. When done well, it works —
even when we know the tactic is being used! The flinch, or wince, is when you express shock or
surprise at an offer.
The intent is to send a message that the offer is oppressive, in the hope that the offerer
will retract his extreme offer and replace it with a more reasonable one. In this way you get an
immediate concession without making one yourself.
A flinch
• creates doubt in the mind of the offerer.
• can help prevent an anchor from being set.
• may cause the offerer to improve his offer before you respond.
How do you counter a flinch? When your counterpart flinches, do not respond with a
better offer right away. Instead, explain why you feel your offer is fair. Now you are discussing
the offer, which legitimises it and helps it take hold as an anchor. If you choose to moderate your
offer, your counterpart will have worked for it, and perhaps made a concession. You will not
have reduced your offer unilaterally.
2. Reluctance
I suggested earlier that you should never appear too eager for a deal. It‟s always best to
play it cool. When you express reluctance you are essentially „playing hard to get‟. As in love,
feigned disinterest often makes the suitor work harder to win you over.
3. The squeeze
You can often squeeze further concessions out of your counterpart without making a
concession yourself simply by responding with a comment such as, “You‟ll have to do better
than that” or “You need to go back and sharpen your pencil.” If this tactic is successful, your
counterpart may improve his offer beyond your expectations. If not, you can continue the
negotiation from there.
The counter-tactic to the squeeze is to reply “How much better?” Now, the squeezer is on
the spot and needs to commit to a figure. If you are the squeezer, anticipate the use of this
counter-tactic and have a specific figure in mind. If it is not accepted, continue negotiating as
before.
4. Good guy/bad guy
You‟ve seen this in the movies: the bad cop intimidates the prisoner, then the nice cop
comes in. The prisoner confesses to the nice cop, thinking he will be better off dealing with a
„friend‟. He focuses on the stylistic differences between the good and bad guys, overlooking the
fact that they are both on the same team and have the same objective. This happens in business
negotiations as well. The roles can be played by a team of negotiators, a businessman and his
attorney, or even a husband and wife making a major purchase. It is an effective way of
pressuring the other side into making bigger concessions.
The counter-tactic to this ploy is to expose the culprit. Let them know you are on to them
and tell them you don‟t want to play games. Just say it in a good natured way.
5. Timing as a tactic: deadlines and delays
Timing is an important element of any negotiation. Either party can manipulate the clock
to his advantage. One party might impose a deadline to rush the other party to action. “The 50
per cent off sale ends tonight. Tomorrow this bedroom set will go back to its usual price.”
Or a party may drag his feet, hoping to prompt his counterpart into offering hasty
concessions. “Well, I‟m not sure, I‟d like to think about it...” Timing is a pretty intuitive matter
to employ. You just know when it would serve you to speed things up or slow things down. On
the other hand, it is not always easy to see when your counterpart is manipulating the clock, nor
is it obvious how to handle it. Here are two things you need to know about timing tactics so that
you can deal with them effectively:
 Deadlines are usually arbitrary. They are set just to get you to act. You can always
negotiate a change in a deadline. Even court and tax filing deadlines can be extended!
 The counter-tactic to a timing tactic is to do the opposite. If you feel pressure from
a looming deadline, ask for more time.
If your counterpart cites policy, ask to speak with a higher-up. Explain that the
negotiation is important, and both parties deserve adequate time to consider the merits. The
bedroom set will still be there in the morning.
If you feel the negotiation is dragging on, impose a deadline yourself. Remind your
counterpart that you have other alternatives, and need to decide by such and such a time.
6. Competition
It‟s sometimes a good idea to casually let your counterpart know that you are talking with
other parties and considering other alternatives. Let him know that he has competition and will
have to win your business. Remember, never appear too eager for a deal. Your counterpart also
has alternatives, in the form of your competitors. Remind him of what makes you unique,
whether it‟s your quality, reputation, experience, or some other differentiating factor. Remind
yourself that he is negotiating with you for a reason.
 7. Authority limits
Whenever you negotiate, it‟s always a good idea to limit your authority. Having someone
to check with is convenient when the other side is pressuring you for a commitment you may not
want to make. Perhaps you are not as well prepared as you thought, or would like more time to
think it over. Car salesmen use this tactic all the time. After hearing your offer they disappear to
“check with their manager”, then return to tell you their “hands are tied”. Many people let their
egos get the better of them during a negotiation. They may say something like: “I‟m the boss, I
can do whatever I want, I don‟t need permission from anybody.” Once you have said that, the
other party may press you to agree to a proposal you may be unsure about.
But what if you really are the boss, and the other side knows it? There is no one higher
you can defer to. So what can you do? You can defer to someone lower than you. For example,
you can say, “I‟ll have to check with my accountant before I commit to that figure,” or “I need to
run that past my marketing team and get back to you.” As the boss, you would do well to
delegate certain responsibilities to others you trust, and it is only natural to value and rely on
their input.
Some negotiators like to ascertain at the beginning of the negotiation that they are dealing
with a person with decision-making authority. This is a good practice. However, if they try it
with you, don‟t take the bait. Tell them you have authority to a point, and will need to check with
others beyond that point. Do not name a specific person, or they may want to get his approval on
the spot. Your higher authority should be a vague entity, such as a committee, management, or
the Board of Directors. Negotiations are unpredictable. Always leave yourself an out. Even if
you don‟t use it, you will be more comfortable — and confident — just knowing it‟s there.
8. Silence
Most people are uncomfortable with silence. During an awkward pause, they say
something — anything — to break the tension. This is usually a mistake. Learn to be
comfortable with silence. Let the other party do the talking. She just might say something that is
music to your ears.
Suppose your counterpart makes a concession. You remain silent. She is wondering what
you‟re thinking, and might assume you feel her concession is inadequate. As the silence becomes
uncomfortable, she opens her mouth to speak — and offers you a bigger concession. She is now
negotiating with herself.
If your counterpart clams up on you, don‟t give anything away. Repeat your last
comment, ask her what she thinks about it, read through your papers, stare her in the eyes, or
excuse yourself to make a phone call or use the restroom. Do anything to break the dynamic
without conceding more. Just make sure you don‟t break into nervous giggles.
9. Bundling
You walk into a fast food restaurant for lunch. You order a burger and a medium drink.
Then you notice that you can get the same burger and drink with fries for just a bit more. It
seems like such a bargain. When you stop eating and stare at the remaining piece of burger and
fries that you can‟t finish, you wonder why you ordered so much food. You‟ve been bundled!
Sellers often bundle a set of related items at a special price to entice you to spend more.
Sometimes it is a bargain, like when you really do want a burger, drink, and fries. Often it is just
a tactic to separate you from your money.
To counter the bundling tactic, focus on your interests. Determine which items in the
bundle you want and which you do not want. Negotiate for a package that includes only what
you want. Do not be swayed by a package of unnecessary extras just because it looks like a good
deal.
Star Tips for using negotiating tactics and counter-tactics
1. Understand tactics not only so you can use them, but also so you can defend against
them with the appropriate counter-tactic.
2. Weigh the pros and cons before deciding whether to make the first offer.
3. Never accept a first offer.
4. Aim high when making an opening offer, but don‟t insult the other party.
5. Understand that initial offers and counter offers can serve as anchor points. They
establish the negotiating
range and strongly influence the settlement price.
6. Play hard to get by using the flinch and reluctance tactics. This often results in a
sweeter deal.
7. Use the clock to your advantage, but remember that most deadlines are arbitrary.
8. Limit your authority. Allow yourself an out by being able to defer to others on certain
points.
9. Be comfortable with silence. Don‟t blurt out something you‟ll later regret simply
because the silence feels awkward.
10. Watch out for bundles. Accept only the items you want.