Top Ten Negotiation Traps and How to Avoid Them

Negotiation Tactics are more than just having a set of tools. The great negotiator is aware of the negotiation tactics being employed by the other party. Sometimes the person you are dealing with will use a number of Negotiation Traps, the purpose of which is to trip you up and make you concede more than you had intended.

Here are my Top Ten Negotiation Traps and how to avoid or deal with them.

1. Hot and Cold

This is where the person you are negotiating with suddenly seems to lose interest in the deal. They blows hot and cold. There is a marked change from their initial enthusiasm. They have started to go quiet on you. You start stressing, and feel the emotion is creeping in. Are you losing them? You ask yourself. Should you offer another concession to grab their attention retrieve their enthusiasm? When negotiating with people who are hard to judge it is difficult. This type of negotiator is deemed a low reactors.

As ever, remain calm, and do not panic. Keep asking open ended questions so it forces them to talk and respond, and restricts their opportunity to play the silent card. But also do not forget, do not be afraid of the silence.

2. Rolling Concession or “Eleventh Hour” request

So you are at the point where you think the deal is about to close. You are keen to close, it is within touching distance, when, all of a sudden the other party just says “actually, could I just get one more point.” Then if you concede just to close this damn deal, they say, “Oh yes… and another thing”. And then another. You get the picture. Your emotions will be high as you want to close the deal, and your cool judgement maybe impaired, by the emotion and adrenaline of thinking the deal is about to be done. Research has shown that more concessions are conceded in the final few minutes than at any other time during the negotiation.

It pays to list all the points that need addressing at the beginning of the deal, so there are no surprises.

3. Heavy Investments

When you have spent a lot of time on the deal, there is a real eagerness to close. You have invested heavily in terms of time and emotion, and this investment heightens your want to close the deal. The other party, knowing this keenness on your part, may spot a weakness, and start to ask you to do more and more, and jump through an ever increasing amount of hoops. These could be in the form of more documents, tenders, presentations, feasibility studies etc. You maybe emotionally drained, and more likely to concede these requests. All of these requests may make you think you are failing, and in a desperate attempt to get the deal back on the course where you think it was, the more likely you are to drop the price. You have invested so much time and energy you may start thinking that you might as well drop the price to save that investment.

Remember, they want to do a deal as well, so a little bit more work here and there is fine. Stick to the key elements of the deal proposal and do not waiver. Do not let emotion fog your thought process and ultimate goal.

4. “If you throw in…. then it is a deal”

This plays along the similar lines to the Heavy Investment approach. Again, it relies on you being close to the end, maybe emotionally exhausted and champing at the bit to close the deal. Then at the final moment, just as you are about to seal that deal, the other side asks for one last offer. Maybe they suggest it a favour, or a sweetener for the deal. If you are not careful, at this stage of the deal you are likely to concede too easily, and what they ask may have a heavy price. This trap is all about the timing, you are so close to the end, and they seemingly move the goal posts at the last second.

Do not forget, that both parties have invested a lot of time and energy in this deal. They want this deal as much as you do (maybe even more). They are more than likely just trying it on. Stay focused and keep firm. They are probably just trying their luck.

5. “Not Having the Mandate”

All of a sudden the other party suddenly says it does not have the authority or mandate to agree the deal. They have gone a head and accepted all your concessions, but needs to ask line manager. The line manager then of course objects to one of the third party’s concessions, and so the third party has to withdraw that concession for the deal to go through.

Establish at the outset that the third party you are dealing with has the mandate and the authority, or whether they have to confirm the deal with anyone else.

6. Changing of the guard

Suddenly you negotiator you were dealing with changes to someone else. This new negotiator denies all knowledge of the concessions that were made by their predecessor.

You have a couple of choices here. You can insist that the previous commitments made are honoured, and if you keep notes when you negotiate, and have been clarifying and establish the key deal points as you go, this should be easier. Alternatively, start the negotiation again. Wipe the slate clean and start a fresh.

7. Dutch Auction

Have you ever been in a situation where you have been played off against a competitor. If you are not careful you can find yourself being used as a pawn in a an attempt by the third party to push the price or value of the deal lower and lower. They tell you that a competitor can offer the same thing for X% less. So you offer a reduced price. What do they do? They just go to the competitor and tell them they have been offered a better price, in the hope that the competitor offers them a revised, lower price. Then they come back to you and say the competitor has reduced their price again. And so on, and so on. Before you know it you are in a Dutch Auction, where the price goes down and down.

If you have any inkling that you are being played like this, you need to be tough. Here the bull negotiator needs to come to play. Stay firm and tough, and stick to your price.

8. The Unknown Competitor

Like the Dutch Auction outlined above. The other negotiator refuses to inform you who the competitor is. They state they have an NDA in place and for ethical reasons they cannot. The point here is, that without knowing who this so called competitor is, you cannot judge effectively whether what they are offering is inferior to what you are offering.

You should ask questions about this so called offer from the unknown competitor. What sort of terms they offer? Such as delivery terms, payment structures, etc. You will soon be able to ascertain whether your opposite number is bluffing or telling the truth. Remember to have faith in your product or service. If it is not a fair comparison with this unknown competitor, then demonstrate why what you have to offer is far better.

9. The High Baller

You have a figure in mind, and then the third party comes in with a really high (or low) figure. This completely knocks you for six, and you start adjusting your figures and prices accordingly. You have begun doubting whether your original figures were right. Here the negotiator you are facing has made you change your game plan. They have taken control of the negotiation.

Remember, if you have done your planning, you will know why your price is a realistic price, and any high balling on their part is just posturing. Do not be put off, and justify your position and why what they are suggesting is not realistic. If you challenge their figures and the third party can not back up their original offer you will undermine their credibility in the negotiation. You will be able take control of the negotiation.

10. The Spontaneous Negotiation

There are many occasions when we find ourselves in a negotiation we were not expecting. You are walking down the corridor, when all of a sudden you meet a colleague your are negotiating with internally, or say the phone goes and you are in the middle of something and it is a third party who wants to negotiate with you. There is no time to prepare and so the potential exists for an agreement that may not be best for you in the long term.

As an experienced negotiator you need to decide whether you should engage or not. The other party may be using this negotiation tactic of surprise to gain advantage. It may well be better to negotiate later or avoid negotiation all together, until you can prepare more fully. Be pro-active in agreeing a time and place to re-engage.

As negotiators we can sometimes all be guilty of laying some of these traps ourselves when applying our negotiation tactics. I know I have done in the past, without really thinking. If you are aware of these traps, or use them your self, you will be more aware of when they are used against you. Look out for them, keep focused on the prize, and try to avoid being too emotionally tied up in the deal. Many of these negotiation tactics play on your emotion. So keep cool.



Source by Clive Illenden