Do you make the first offer? How high should it be? Should you counter? This guide explains powerful negotiation tactics and techniques.
Before the Negotiation
Determine the type of deal that you should be receiving.
Negotiating a job offer? Get data on salaries (e.g., PayScale, LinkedIn, recruiters). Without this knowledge, you’ll be at the mercy of your counterparts.
In any negotiation, you can boost your power in two ways:
- Importance. Which party needs the agreement?
- Alternatives. How many alternatives does each party have?
The second factor is called a BATNA: Best Alternative to a Negotiated Agreement (Fisher, Ury, & Patton, 2011).
You can boost your power by raising the (a) quantity, (b) quality, and (c) plausibility of your BATNAs (Kim, Pinkley, & Fragale, 2005).
Negotiating a job offer? Interview at multiple companies so that you reduce your reliance on any single company.
Weather has a powerful effect on behavior. You’re more likely to help other people during pleasant weather (Cunningham, 1979).
You feel happier in good weather, so you misattribute these positive emotions to the surrounding context.
If you need to negotiate during bad weather, discuss the weather before negotiating. This discussion will eliminate the negative effects (see Schwartz & Clore, 1983).
Suggest an early time, perhaps 8:00 to 10:00am.
First, you’ll have ample time to negotiate. If you extract a longer investment of time, your counterpart will be more invested in finalizing an agreement (Malhotra & Bazerman, 2008).
Second, you trigger a primacy effect: Information early in a sequence will become entrenched in long-term memory (Murdock, 1962).
Strive to be the first candidate in any sequence of interviews. While managers choose the best candidate, your interview will pop into their mind more easily – and they will misattribute this ease with a desire to hire you (see Whittlesea, 1993).
If an early time isn’t possible, choose a later time (perhaps 4:00 to 5:00pm). If you can’t be the first interview, strive to be the last interview to trigger a recency effect.
Should you negotiate via face-to-face or email?
Face-to-face builds more rapport, and it promotes more clarity because of the nonverbal cues (Drolet & Morris, 1999; DePaulo & Friedman 1998). Some studies argue that it’s more effective than email negotiations (Valley, Moag, & Bazerman, 1998).
However, other studies found the opposite: Email was better. Negotiators can leave an email thread more easily, so the parties are more motivated to reach an agreement (Hatta, Ohbuchi, & Fukuno 2007; Croson, 1999).
So, which is better?
Surprisingly, it depends on gender (Swab & Swab, 2008). Face-to-face has more tension and arousal, so people resort to their instinctive gender roles:
- Women are caring and communicative.
- Men are dominant and aggressive.
Negotiating with men? Reduce their urge to show dominance by removing nonverbal cues from the conversation — negotiate via email or phone. At the very least, minimize eye contact in person.
Do the opposite for females: Increase nonverbal cues.
Negotiation has a bad reputation in Western cultures. It seems combative — only one winner can emerge.
This philosophy influenced negotiation styles. Rather than look for mutual gains, people fixate on defending and reinforcing their position — which weakens the final deal for both parties (Fisher, Ury, & Patton, 2011).
To earn the best deal, you need a cooperative mindset. How? Choose your words carefully.
Avoid words that frame the discussion as a negotiation. Even simple words like “accepting” and “rejecting” increase aggressive tendencies (Larrick & Blount, 1997).
Use cooperative words (e.g., collaborate, brainstorm, work together). Even 1st person pronouns (e.g., us, we, our) boost cooperation (Perdue, Dovidio, Gurtman, & Tyler, 1990).
Your counterpart will negotiate less aggressively if you schedule a future time to meet (Murninghan & Roth, 1983).
When social dilemmas involve repeated interaction over a period of time, people often develop a readiness for mutual cooperation… [This] implies that the only way to succeed is to get the other(s) to cooperate. (Pruitt, 1998, p. 474)
Perhaps you could schedule a future meeting to review the contract.
Group your name with their name.
In my work, I’ve argued that “gestalt grouping” is the mechanism behind empathy. We desire to help other people because our brain groups our identity with them — it feels like we are helping ourselves (see my video on The Origin of Human Empathy).
Grouping your names will trigger this effect.
If your counterpart sees your name next to their name, the positive feelings from their name will transfer to your name.
It’s similar to classical conditioning. Pavlov conditioned his dogs by pairing an emotional stimulus (food) with a neutral stimulus (bell). Their name is the emotional stimulus. Your name is the neutral stimulus. Positive emotions from their name will transfer to your name (see Chapter 4 of my book The Tangled Mind for other examples).
During the Negotiation
Don’t underestimate schmoozing.
People receive better deals when they schmooze beforehand:
…schmoozing greases the wheels of sociality and commerce, allowing relationships and deals to develop despite the friction involved in negotiations. (Morris, Nadler, Kurtzberg, & Thompson, 2002, p. 99)
Personal information (e.g., what’s happening in your life) is particularly effective (Worthy, Albert, & Gay, 1969).
This tactic seems cute — but it’s devious.
Bring pastries and coffee to your next negotiation. It does four things:
- Mimics Their Behavior. Both of you will be eating — and this mimicry builds rapport (see Chartrand & Bargh, 1999). Research confirms that eating improves negotiations (Maddux, Mullen, & Galinsky, 2008; Balachandra, 2013).
- Provides an Unsolicited Favor. Even if your counterpart hates pastries and coffee, this unsolicited favor will trigger an urge to reciprocate (e.g., make concessions; Cialdini, 2006).
- Increases Their Glucose. People behave aggressively if their glucose is low (Donohoe & Benton, 1999). Conversely, increasing glucose can boost cooperation (Denson, von Hippel, Kemp, & Teo, 2010). Pastries and coffee increase glucose levels, so they should reduce aggression (Lane, 2011).
- Activates Physical Warmth. Our brain confuses physical warmth with personal warmth. Holding a warm beverage (e.g., coffee) boosts our interpersonal warmth and cooperative behavior (Williams & Bargh, 2008).
Humans experience psychological reactance.
If they believe that someone is trying to influence their behavior, they resist (Brehm, 1966).
Be careful with any slideshow or formal presentation. Once they see your slides, your counterparts will think: Hmm, okay. These slides are meant to persuade me.
Whoops — they will now resist anything you say (DeCarlo, 2005).
How can you prevent this harmful mindset? Simply reframe your slides by saying: Yeah, I’ll show you. We have a slide deck for new employees. It has information about our company.
It’s the same presentation, yet this subtle framing bypasses reactance because it’s no longer a “sales” presentation. These slides were designed for new employees.
Change the body language of your counterpart to reduce their power. For example, give them a soft and low chair for these reasons:
- Upward Angle. Your counterpart should look up at you. These angles boost your power. Even white rice seems more powerful with an upward perspective (Van Rompay, De Vries, Bontekoe, & Tanja-Dijkstra, 2012). If you’re negotiating through video chat, you could achieve a similar effect by tilting your camera upward.
- Contracted Posture. Ideally, give them an awkward chair — small enough so that they need to cram into it. This posture will trigger a biological response that weakens their power (Carney, Cuddy, & Yap, 2010).
- Flexible Negotiation. Why a soft chair? Because a rigid chair will extract rigid behavior. In one study, people who sat in hard chairs were more rigid while negotiating — their counteroffers were less flexible (Ackerman, Nocera, & Bargh, 2010). It seems weird, but refer to my book The Tangled Mind for the reasons behind this sensory confusion.
Be honest with your BATNAs (DeRue, Conlon, Moon, & Willaby, 2009).
Negotiators who are perceived to have many (rather than few) alternatives (1) will be considered more attractive negotiation partners, (2) will be less likely to have others negotiate aggressively with them, (3) will more easily reach an agreement, and (4) will capture a higher percentage of the value in negotiations. (Malhotra & Bazerman, 2008)
Plus, this disclosure gets your counterpart to be honest as well (Collins & Miller, 1994). You’ll hear a more accurate portrayal of their needs — which can lead to better outcomes for you and them.
Sometimes you will negotiate with a “powerful” counterpart, such as your boss. In these scenarios, you might feel pressured to use disclaimers:
- “I know this might sound like a lot, but ______.”
- “I hate to ask for this, but ______.”
- “Would you possibly consider ______?”
Eliminate these words. Your counterparts will negotiate more aggressively, giving you a worse deal. (Van Kleef, De Dreu, & Manstead, 2006). You receive better deals when you are firm and confident (Tiedens & Fragale 2003).
In later stages of negotiations, show anger and disappointment to get larger concessions (Van Kleef, De Dreu, & Manstead, 2006, Van Kleef, De Dreu, & Manstead, 2004).
Caveat: Your response must be reasonable (Steinel, Van Kleef, Harnick, 2008).
Plus, there’s another benefit of disappointment.
Most people guess that the most important outcome of a negotiation is the economic value of a deal (i.e., money). But there’s a bigger factor: Perceived performance.
MBA graduates were more satisfied with their job (and stayed longer) if they believed they performed well in their job negotiation. Their actual salaries had no effect (Curhan, Elfenbein, & Kilduff, 2009).
Therefore, your counterpart will feel better about their deal if you show signs of disappointment (Thompson, Valley, & Kramer, 1995).
Caveat: Your counterpart might also develop a negative perception of you (Kopelman, Rosette, & Thompson, 2006). Consider using this tactic only for short-term relationships. And always direct your anger toward the offer – never at the person.
In negotiations, your biggest enemy is a fixed pie mentality.
Consider a job negotiation. The employer offers $110,000. But you want $130,000. With a fixed pie, at least one party needs to concede. Typically, both parties concede to the middle — in this case $120,000.
But this final agreement is worse for both parties. With the right approach, your deals can be favorable to both parties.
How? Avoid fixating on a single metric (e.g., salary).
Instead, you need to address all terms. For job negotiations, address the terms beyond salary:
- Vacation days
- Working from home
- Scheduled raises
- Other perks
By listing all terms, your negotiation becomes more flexible. You might accept the $110,000 salary if you can work from home for two days each week.
After listing the terms, rank them in order of importance:
…information about positions and preferences is more distributive in that it highlights differences, whereas information about priorities is more integrative in that it identifies potential trade-offs. (Weingart & Olekalns, 2004, p. 146)
Ranked lists will help you see the areas of flexibility: You might place a large value on commissions, and your employer might be more flexible with commissions.
However, never address terms sequentially. Don’t resolve salary. THEN commissions. THEN vacation days. Resolve everything at once. Lumping everything will maintain your bargaining power. You can concede in less important areas to receive value in more important areas.
Which option is better:
- You find a $20 bill
- You find a $10 bill. Then another $10 bill
Both outcomes are the same, yet the second outcome feels better (Kahneman & Tversky, 1979).
Follow that guideline in negotiations. Consider this benefit:
- The project will be completed under budget by May 3
You could separate that benefit into smaller pieces:
- The project will meet all quality requirements
- The project will be completed under budget
- The project will be completed by May 3
Voila. You turned one benefit into three. Your counterpart will perceive more value in the deal (Malhotra & Bazerman, 2008).
People care about relative value. How much do they receive compared to you?
In one study, researchers asked people to participate in an experiment:
- One group was offered $7.
- Another group was offered $8 (but they were told that other participants were paid $10).
The second group was less likely to participate, even though they were offered more money (Blount & Bazerman, 1996).
In negotiations, you need a sense of equality. Your list of benefits should never seem visually longer (Petty & Cacioppo, 1984).
Always make the first offer:
When I poll executives, more than three quarters believe that it’s usually best not to make the first offer…There’s only one problem with this assumption: it’s wrong. One thorough analysis of negotiation experiments showed that every dollar higher in the first offer translates into about 50 cents more in the final agreement. (Grant, 2013).
First, your counterpart will focus on the best qualities about your offer.
…a high list price directed real estate agents’ attention to the house’s positive features (such as spacious rooms or a new roof) while pushing negative features (such as a small yard or an old furnace) to the back recesses of their minds. (Galinsky, 2004)
Negotiating a job offer? Requesting a high salary will orient this employer to look for your best qualities that justify this cost.
Second, you trigger an anchoring effect (see Epley & Gilovich, 2006).
Most employers are considering a range of salaries, such as $70k – $95k. Your requested salary ($100k) will pull them to the higher end of their range ($95k).
Without an anchor, your salary would settle near the midpoint of their range — in this case $82.5k (which is $12.5k less than you would have received).
While negotiating, you should ask for a range of prices. Researchers compared different requests for an $80k salary:
- Backdown Range: $70k – $80k (target at top)
- Bracketing Range: $75 – $85k (target in middle)
- Bolstering Range: $80k – $90k (target at bottom)
- Bump Up Point: $90k (single high point)
A bolstering range produced the highest salary (Ames & Mason, 2015).
You should also request a precise range (e.g., $81k to $84k).
Precise numbers activate a precise mental ruler. One interval in this scale is less distance than one interval in a “zoomed out” scale.
…the resolution of this scale might also influence the amount of adjustment. X units of adjustment along a fine-resolution scale will cover less objective distance than the same number of units of adjustment along a coarse-resolution scale. (Janiszewski & Uy, 2008, p. 121)
Your counterpart will be less likely to move away from a precise range because this movement feels larger.
Paradoxically, you can enhance your offer by asking for more value.
Research confirms that contingencies are persuasive: Hmm, I could sell the product for $64 if you agree to post a review afterward (Blanchard & Carlson, 2016).
Contingencies make it seem like you are sacrificing. Thus, buyers want to reciprocate by accepting.
This strategy can bypass the tug-of-war in salary negotiation: You request $95k…they counter with $85k… you meet at $90k.
Instead, a contingency can distract them from this instinctive compromise: I could do $95k if there’s a good benefits package.
Perhaps you already know they offer good benefits. It doesn’t matter — this mere request will frame your offer as a sacrifice. Your counterpart will perceive less room to negotiate.
Decisions are made via simulation.
If you ask for a salary of $95k, your counterpart will imagine giving you $95k to gauge how it feels (see my book Imagine Reading This Book).
Subtle words can influence this mechanism. Compare these two questions:
- How much is monthly revenue?
- How much is yearly revenue?
Both questions ascertain the amount of revenue. Yet the second framing — yearly revenue — is better.
This question orients their focus toward a larger version of revenue. While simulating your offer, they will imagine withdrawing $95k from this larger number, which feels easier and less painful.
Your counterpart made a generous offer that you don’t want to counter. At this moment, pause for a few seconds before accepting.
Your silence will make them uncomfortable — and they might preemptively enhance their offer before you answer:
- Them: How is $85,000 for the salary?
- You: [pause for 5 seconds]
- Them: We could go up to $90,000.
If they interject, then great. If not, then accept or counter. Either way, your silence was simply a moment to ponder the offer.
If anything, immediate concessions can be harmful. Counterparts feel regretful, as if they are overvaluing your offer:
…concessions, especially immediate ones, will be interpreted as signaling a defective or overpriced object that the other party is trying to unload rather than a conciliatory move designed to aid the focal negotiator. (Kwon & Weingart, 2005, p. 4).
Don’t be greedy — but counter their first offer.
Countering is good for you and the counterpart. Why? Because they will be happier with the deal (Galinsky, Seiden, Kim, & Medvec, 2002).
If you accept their first offer, they feel regretful — as if they received a suboptimal deal. Countering will make them happier with the final deal. Now, should you counter a counteroffer?
Never counter for the sake of countering. Compare this counteroffer to your benchmark data. What deal were you hoping to secure? If this offer is generous — and it matches your intended deal — then accept.
Your boss tells you that a raise isn’t doable. No reason. No explanation. Just…no.
Always diagnose the reason: What’s the issue? Budget? Timing? Performance?
Once you get these answers, find a solution. When will the budget open up? When will the timing be better? What will it take to earn that raise?
After the Negotiation
Get written proof as quickly as possible. Follow up via email and thank your counterpart for the opportunity to talk. Use this email to summarize the terms that you discussed.
Confirm a response so that you’ll have written proof while drafting the formal agreement.
When possible, you should draft the contract.
Not only will you finalize the agreement faster, but you can also control the terms.
…the party who introduces its boilerplate contract will have a significant advantage in the negotiation: even strategically placed defaults on important contractual elements (such as contract length, penalties, and termination clauses) are likely to be stickier when they are pre-written into the contract. (Malhotra & Bazerman, 2008, p. 18)
Don’t be manipulative. Always be transparent with the agreement. But take this initiative so that you can structure the terms.