Intimidation by Raising the Stakes
Negotiating in an environment where the stakes keep rising has all the tension of a high stakes poker game. A good bluff can make the other player drop out...
A friend of mine was involved in a divorce action. He and his wife had already settled on a number of issues. The major issue remaining was the amount of alimony and the length of time it would be paid. His wife insisted on $5000 a month for eight years. My friend was willing to pay $3500 a month for five years. Neither would budge from that position. Talks broke down.
At that point his wife decided to raise the stakes. She backed away from previous agreements and increased her demands in every area. She demanded a certified audit of all their assets. Her lawyer initiated actions to tie up major business assets so they could not be sold, transferred or borrowed against.
Suddenly my friend was faced with a difficult choice. If he continued to hold out for the $3500 which he felt fair and affordable, he faced potentially disastrous consequences. His business would be tied up for years. Legal costs would soar. If the case went to a judge, there was even some chance that alimony payments might be more than $5000 a month and continue permanently. The stakes were high. My friend settled for $4700 a month for eight years.
Industrial buyers sometimes raise the stakes when dealing with distributors. One negotiation I recall involved an electrical distributor who had serviced our Los Angeles division for four years. Because the economy was depressed, we were anxious to reduce costs. We decided to open distributor bidding on our total California requirement. This represented a dollar volume four times greater than the Los Angeles account. Low bidder take all. The stakes were high.
For the Los Angeles distributor, this was a difficult choice. He could hold the price and risk losing his position in Los Angeles, or he could bid low and win the much larger contract covering California. The distributor chose to bid low, but not low enough. Another distributor reacted to the high stakes by dropping prices almost 20 percent.
What is face negotiation theory? When was the last time you were having a conversation with someone and noticed their facial reactions? What did you do? Did it alter the way you pushed the conversation forward? In most cases, this is precisely what happens. While some may see an emotional reaction and take advantage of it to press their needs or desires, others may shift their manner of speech, change the subject, or otherwise be more concerned with how that individual is reacting or responding...Read More
Whether you’re negotiating for a better price on lunch or a new car or a multi-million dollar deal at work, how you listen matters. Of all the life skills we develop from childhood, listening is actually one of the most overlooked and underappreciated...Read More