Now we’re really getting down to brass tacks: the actual bargaining. This is the part of negotiating that makes people the most nervous. But you can get the upper hand if you’re able to accurately size up your counterpart.
As always, beneath the swirl of offers and counteroffers are deeper psychological currents that drive hidden wants, fears, and desires. Your job as a good negotiator is to identify them.
You need to identify their negotiating style, as well as your own. Whatever your style is, don’t project it onto your counterpart. Think of this as the inverse of the famous Golden Rule: treat others as they want to be treated.
There are three negotiating styles. We’ll cover advice on what to do if you’re dealing with that style, and tips if you are that style.
These are people-pleasers. They value the time spent building a relationship with their counterpart. Accomodators tend to be sociable and agreeable, but also poor time managers.
When dealing with an accommodator, focus your calibrated questions on implementation. This is because they’ll often agree to things that they can’t actually follow through on, since they’re so eager to make you happy.
If you’re an Accommodator, 1) don’t sacrifice your reasonable objections because you’re afraid of conflict. Remember, most good decisions are borne of conflict and discomfort. Lean into it and avoid negotiating with yourself. Also, 2) avoid excess chitchat, especially if you’re face-to-face with a non-Accomodator. As you’ll see below, Analysts will want to get straight down to the facts, while Assertives want to be the ones doing all the talking instead of listening to you.
These are methodological and diligent people. They want to assess all the facts before committing to a decision. As a result, they’re fairly unconcerned with time and less likely to be pressured by deadlines.
Analysts can be uncomfortably distant and cold, because they’re focused more on the results of a negotiation than on forging a human connection with their counterpart. They see you and the negotiation with you as completely separate entities.
When dealing with an Analyst, use clear, unambiguous data to back up your assertions. Don’t ad-lib, and avoid giving them any surprises. Also, don’t ask too many questions, even calibrated questions. Analysts will tend to not answer them until they have all the information they feel they need to respond: they’ll just treat your questions as just more data to analyze, which will take up a lot of your time.
If you’re an Analyst, don’t cut off your most valuable source of info: your counterpart. You’ll learn more from creating some empathy and connection with them than you can from all of your external research and number-crunching. Be sure to smile when you speak to put your counterpart at ease and get them to be more forthcoming.
Assertives are highly achievement-oriented. They want to get things done. They hate wasted time and care a lot about meeting and beating deadlines. They also tend to have an aggressive personal style and can’t listen to you until they feel they’ve been heard. In short, they’re the classic hard-bargainer, the sharks, the type of adversary that many rookie negotiators fear going up against.
But you can use their aggressiveness and their need for tangible accomplishments against them. They’ll be especially vulnerable to time pressures, since the biggest defeat to them is making no deal at all. If you can back them into a corner where they’re facing a deadline, you’ll be in a great position to dictate the terms.
Fundamentally, you need to put an Assertive at ease and get them feeling in control. Use a mix of labels, mirrors, and calibrated questions to prompt a “That’s right” from them. This shows them that you see and understand their worldview and gives you credibility (without them feeling like they’ve conceded something to you).
Mirrors are particularly effective with Assertives. They love hearing themselves talk, so hearing you mirror what they’re saying will boost their ego and convince them that you’re listening.
If you’re an Assertive, watch your tone and use calibrated questions to make yourself more approachable. Remember, browbeating your counterpart into concessions can backfire: they might just be agreeing with you because they’re intimidated by your aggressive style and won’t actually be able to implement the terms.
You need to be prepared before you head into a negotiation, regardless of which type you’re dealing with. Know your calibrated questions, mirrors, and labels before you go in. You don’t need a script, but you do need a plan.
But it’s not enough to just have your own moves thought out in advance. Like a boxer, you also need to be quick on your feet, anticipate your counterpart’s moves, and punch back. You can’t become tunnel-visioned by your own plan. You have to be flexible and pay attention to changing circumstances.
Remember, you’re not just pushing buttons into a computer to produce a desired output. You’re talking with a real-live human on the other side of the table, with complex emotions and motivations. You need to respond in real-time to the things they say and do.
For example, seasoned counterparts will often use extreme anchors as their opening move. As we discussed, this is to try and get you to split the difference: even if the number you settle on is far more to their advantage, it looks reasonable in contrast to the first offer.
They do this to throw you off-balance and to get you to negotiate with yourself against your own best interests. Below, we’ll explore specific dodge and counterpunch tactics you can use when you’re facing down a tough negotiator.
Let’s say you’re looking to sell your house and you think you can get around $250,000 for it. If a prospective buyer comes along and throws you an extreme anchor by making you a lowball offer of $175,000, how do you respond?
Calibrated questions are a great way to say “no” without actually using the word. In this context, you would say, “The listed price is $250,000. I’m willing to negotiate, but you’re offering less than I paid for it: I’d be losing money. How can I do that?”
If the extreme first offer is monetary, as in this case, you can pivot to non-monetary terms. Ask questions like, “Let’s put price aside for now. What else can you offer for this house that would make this a good deal for me?”
You also need to be prepared to hit back. Remember not to get angry. Sure, your counterpart might be intimidated into making big concessions. But since they’re being made under duress, they might end up promising more than they can really deliver, leading to problems of implementation.
Instead, use strategic umbrage. This means being genuinely angry (not faking it), but in control of your emotions. If you get an unworkable offer, saying “I don’t see how that could ever work” in a displeased, but measured tone is a good way to leverage a little bit of anger to your advantage. You’re angry at the offer, not the person.
“I” statements are also effective. They put the other side’s focus on you as a person, which triggers their empathy. “I’m sorry, but that doesn’t work for me,” is a great way to hit the pause button on a bad dynamic.
Lastly, you need to be willing to walk. No deal is better than a bad deal. If you suspect that your counterpart is lying, you should kill the discussion right way. There’s no point in negotiating if you can’t get accurate information from your counterpart or if they’re acting in bad faith.
Even if they’re not lying per se, you should walk if your counterpart has no ability to follow through on the deal (despite what might be their best intentions). This comes back to implementation: if your counterpart can’t actually pull the trigger because outside forces won’t allow them to act, you have nothing to gain by speaking with them.
However, you should always maintain collaboration with your counterpart: you might need to work with them on some future deal. Avoid emotional escalation if you need to shut down the negotiation and never look at your counterpart as an enemy.
The Ackerman Model is a good alternative to traditional, old-school negotiating schools of thought. It’s an offer-counteroffer system, but it crucially avoids the counterproductive “split the difference” approach that dissatisfies both parties.
(Shortform note: the book presents this in the context of your bargaining for a lower price, as in buying a house. If you’re bargaining for a higher price, as in negotiating a salary, then invert the advice.)
First, set a target price. This should be ambitious, but reasonable. You don’t want to negotiate with yourself and set your target price too high (if you’re the buyer), but you also don’t want to set it so low that your counterpart would never agree to it. Doing some research beforehand will help you set your goal.
Next, you establish your first offer at 65 percent of your target price. If your target price is $100,000, you first ask for $65,000. This establishes an extreme anchor and throws your counterpart off their heels.
Get your counterpart to negotiate against themselves. When they throw you an unacceptable counteroffer, use a calibrated question like “How can I pay the price you’re asking for this?” Get them to think about how they can solve your problems.
Next, you plan your counteroffers. For these, use three increases—but each time, you reduce the size of the increase.
There’s also great power in the decreasing increments of your offer increases. They fool your counterpart into thinking that they’re squeezing you for every last penny. This makes them feel like they’re in control and that they’re earning hard-won concessions from you. Of course, you know that you’re still well below your target price.
Next, use a precise, non-round figure for your final number to give it added weight and credibility. We mentioned this earlier when we discussed framing effects, but it bears repeating: $101,321.94 sounds like a much firmer, non-negotiable number than $100,000. This will signal to your counterpart that this number is the product of a great deal of calculation and analysis on your part and that, therefore, it can’t be negotiated.
Lasty, throw in a non-monetary item along with your final offer to signal that you’re truly at your limit. By pivoting to something other than money, you’re sending a message to your counterpart that the monetary portion of the negotiation is over and done with.
Negotiating Rent: The Ackerman Model in Practice
A student who was paying $1,850/month for an apartment was presented with an unacceptable offer by his landlord: the rent would go up to $2,100/month if he wanted to renew.
How did the student respond? First, he did his research on rents for comparable buildings in the area and set his target price at $1,830: less than he was already paying!
When the student met with the landlord, he emphasized how much he enjoyed living in the building and that he wished to renew, but that there were comparable buildings in the area that offered lower rents. He asked his first calibrated question: “How am I supposed to pay $250 extra per month?”
> The landlord, however, didn’t budge and pointed out that the building could be charging even more than they were asking the student. Then, the student responded with his first offer: “I understand that you have a great building and could be charging a premium, but it’s simply outside my price range. Would $1,730 be reasonable?”
> The landlord didn’t accept this figure, which the student expected. But he wisely avoided getting pulled into a tit-for-tat. Instead, he asked another calibrated question: “How much does it cost to refurbish an apartment after a tenant leaves?”
> The landlord responded that it could cost up to $2,000 just to clean and renovate the apartment to get it ready for a new tenant. The student knew he had an opening: he pointed out that not reaching an agreement meant that the landlord could face both the refurbishing costs and the foregone income from rent. Now, the landlord was thinking in terms of loss aversion.
The landlord then came back with an offer of $1,950. This time, the student used a label to say “no” without actually saying it, by telling the landlord, “That offer is very generous, but I still can’t make that number work. It seems like you’d prefer to roll the dice and risk leaving it unrented than work this out with me.”
> The landlord gave the student the “no” he was looking for by saying, “No, that’s not the case at all, we want to work out a renewal with you, we just can’t offer below market.”
At last, the student pulled out his final, non-round number. He told the landlord, “All right, I see you’re being reasonable and working hard to address my concerns. The most I can do is $1,829.”
The landlord was impressed with the number. “You seem very precise about that figure,” he observed. “I think we can make that number work.” And that’s how this student used the Ackerman Model to turn a rent increase into a rent cut.