The best answer you will hear, when negotiating, is No (find out why)
No sets a boundary. And once you know why your clients says No to your proposal, you have a foundation to work off. Cutting price is not always the best approach.
In this article, I will give you a serious edge when negotiating by sharing a few psychological techniques. These techniques rely on typical human behaviors. Use them to avoid a sterile approach to negotiating and give yourself an upper hand.
The fact is that most people like to win, and win for a clear and obvious reason. Negotiators don’t always strive for the outcome they have been given as an objective – a deeper psychological imperative is to come out on top on a number of levels, and the moral high ground is one of them, as is a position of superiority. It’s not just about winning the best deal, it’s about winning the personality game. If you want to come out as the best personality, then forget this next section as your emotions will get the better of you. To win in a negotiation, you have to put emotions aside.
The Un-comfort Zone
Why does the outbreak of tears turn a row into a reconciliation? What effect does pity have on an outcome? The answer is that they create an uncomfortable situation. Human beings like their comfort zones. And they do whatever it takes to avoid stepping out of it. This is a fact of human behavior that you can use to your advantage.
It’s like this: in any negotiation, who will most likely win – the guy in the sharp-suit and perfect hair, manicured nails, with a 100-page presentation and $800 pen, or the guy who bumbles, stumbles on words, with fingernails like a garden laborer and appears fragile?
If you guessed the first guy, then think again. The second guy will win most negotiations.
Why? It’s about the comfort zone. The first guy feels comfortable. The outward display of rigor and splendor says ‘I am comfortable, and I am safe’. He will probably be thinking that the other guy is not comfortable, and feel even safer in this belief. He probably thinks that he will win the negotiation because he looks more successful, he demonstrates the fruit of success in the sharp-suit and pen, and his well prepared presentation. He will feel in total control. He lacks belief that his opponent can put up a good fight, and any action on their part is random at best.
But the other guy… well do you remember the TV detective Columbo? He was a master of appearing inferior, and controllable to his adversaries. His dirty coat and beaten up car portrayed an image that encouraged criminals to feel no threat. He would appear to bumble around, turn away, and on his way out ask the killer question as if it was an after-thought. The criminal is totally unprepared for it.
What happens is that the second guy above, and Columbo, both step into the un-comfort zone.
The un-comfort zone enables negotiators to lure their opponents into a false sense of security, and then use it. Let your more ‘comfortable’ opponent in a negotiation feel safe and secure in their belief that they have the upper hand.
OK, for those people that really do enjoy the morale high ground, this might seem a totally manipulative tactic, but I say this: in a negotiation, a win:win is a false prophecy.
Let me explain why. You’re a business-person. You have bills to pay, a living to enjoy and a future to invest in. So out of any deal, you need to make sure you get what you require to make it worthwhile and valuable to you. Anything less, you should walk away from it. It doesn’t matter if your client ‘wins’. All you should care about is a ‘win’ for you – that it meets your financial objectives and fits your personal values.
But if your definition of ‘win’ includes the psychological prizes of feeling superior and having the upper hand, then you’re trying to step into your comfort zone. This isn’t a win, it’s a hollow emotional victory. Winning this is like my son finding his lost ‘taggie-blankie’ that he won’t go to bed without.
But it’s highly likely that your client will be wanting their blankie too…. so let them have it whilst making sure you get the result *you* want. The cost of appearing goofy is nothing compared to your desired commercial outcome.
Don’t confuse my point about the pointless win:win. There is always the ‘virtuous spiral’ that comes with providing great service to a client who gives you valuable repeat business. It’s not about screwing people and damaging the chance of this outcome. It is about giving your clients the outcome they desire, and if a superiority complex is part of that outcome then hand it to them. Give them that (their taggie-blankie) and take the rest!
Negotiate with a clean slate
Another psychological tactic is to take everything said at face value and not build up expectations. This is perhaps better explained by an example I remember from two years back.
A friend was negotiating a price for a large piece of work with a high profile client. At the outset, the client said that the potential duration of the project would be 24 months, and would like my friends best price. So he set the price at a daily rate of $800 for that project, a discount of $300 off his usual daily rate. But what then happened is the client said that they would give him a 3-month contract at that rate! He hadn’t priced for a 3-month deal, he set the price for a 24-month deal. So he then was in a hell of a situation to negotiate the price upwards, which of course he couldn’t.
What happened was he had built up an expectation of a 2-year project and had priced on that expectation. He saw the dollar signs of a guaranteed 24-months work with no gaps and became over-excited. His positivity got the better of him. He fell into a classic trap. With hindsight, he should have negotiated the price against a contract rather than pure potential.
The flip-side to this is negativity. Some clients like to screw you on price (probably because they feel that they have achieved some emotional upper-hand, see the un-comfort zone). They start with a price that you can’t make profit off. So what do you do? Rookie negotiators create an expectation that unless they can come close to that price, they will lose the deal. So what they do is to find the lowest price that they can turn a tiny profit (or break even). The skilled freelance negotiator doesn’t fall for this. They don’t make such assumptions, and build such expectations. They return with a price that works for them and waits for a Yes, or No, and negotiates the factors (price, time, quantity, quality) from there.
The trick, in both situations, is to listen your inner-voice and check that you’re not making assumptions. In a negotiation, unless it’s explicitly stated, don’t factor it.
Summary
Negotiation can be a game of conniving and trickery. If you believe that your client wants to achieve a win:win then you’re opening up the serious possibility that you will be the loser. Don’t assume the worst though, in fact don’t assume anything. When negotiating, begin with knowing what you need to make the deal work and don’t compromise. Go for *your* win. Forget whether your clients wins or loses – that’s their concern. Equally, they will think the same of you.
Stay tuned for more freelancer negotiation tips. I’ll soon be discussing ‘factoring’ in more detail. Subscribe to my RSS feed to discover when I do!
Simon,
Those are some fun “tricks”.
When I was in IT sales, my company was a big fan of the Sandler method. One of their tricks I really liked was to look for a way to say NO in the first five or ten minutes of a meeting.
Let’s say you’re introducing your company to a new prospect and the prospect says something like “for us to do any work together you’ll need to respond to our vendor qualification document put out by the Purchasing department.” Now, we all know these “qualification” processes generally lead nowhere good. So I might have responded “I appreciate where you’re coming from Mr. Client, but my company has a policy of not participating in vendor qualification programs. We find that purchasing-led efforts to qualify technology vendors to be very ineffective, even detrimental to eventual project results. In the interest of maintaining our reputation in the marketplace, we will only work with company leadership with a direct, vested interest in the actual project.”
Now there is a real possibility you may lose the business here, so you have to be prepared for that. But Sandler would tell you that if you do, it’s probably not business you wanted anyway.
The upside is that if the prospect “comes to your rescue”, then psychologically they are now in your corner and the odds are very good you will close some business.
Sandler is all about not wasting time pursuing eventual NO’s. I found this to be a valuable technique to identify more YES’s.
@Dave Crain: thanks for your comment Dave. The quip you shared is great – I can imagine saying that right now.
You make a good point – sometimes clients put things in the way to create a smoke screen whilst they determine whether they really want your product/service or not, or find a way (or pluck up the courage) to say No, Goodbye for good. It’s a common cause of the Maybe.
If our client is niggling about price then we tend to get No (a position that can be negotiated from.) If it’s the long drawn out Maybe then these ‘qualification’ tactics or similar are used to get us to walk on our own accord!
Very interesting article Simon. I can completely understand your points, however I still think I shall be keeping my nails clean 🙂
@David – let me know if these tips work for you whilst you build your freelancing empire! Good luck with your negotiations…