Common Business Negotiation Tactics And How To Use Them

There are many tactics and ploys used in business negotiations. Here we will cover the tactics most often used within a commercial context. You will note that each description contains an indication of the negotiation strategies it supports.


CAVEAT: I want to make sure I am clear here: some of these tactics are going to seem unethical or negatively manipulative to you, and you are right to feel that way about them.


My point in sharing them with you is not to advocate for their use but to equip you to recognize when they are deployed against you, so you can formulate an appropriate response or countermeasure—and this is key—without becoming a victim of reciprocity. There is an old expression among negotiators that states, “You should never approach the negotiation table pointing a gun, but you should always know where the guns are.”


I am often amused when I watch the evening news and see some of these tactics employed by politicians or activists. As you study them, you will likely recall times when you have seen them used. That will anchor the image in your mind so that you will recognize it in real negotiation scenarios. Some of the names we have assigned to these tactics might be different from what you might have heard them called in the past. Don’t let that distract you. The point is to recognize the behavior and internalize an appropriate response.


The Puppy Dog

Compatible With These Strategies: Collaborate, Compromise, Accommodate, Compete

What It Looks Like:

Allowing your counterpart to experience the product, solution, or service that you are proposing before closing a deal. Many local animal shelters give a two-week “family fit” trial where the customer gets to keep the puppy long enough to form a bond. Like bringing a new puppy into your home, the longer your customer has to get comfortable with the new arrangement, the more attached they will become.


Example:

Software provided as a free trial for thirty days with no obligation to buy.


How To Deal With The Puppy Dog:

Make sure that you agree with all the possible terms and agreements before participating in trying out the free product, service, or solution. Once you decide to buy the product, service or solution based on your experience with it, you are likely to pay more than you would have if you didn’t try it first due to your perception of the reduction in the quality of the available alternatives.


The Trade-Off

Compatible With These Strategies: Collaborate, Compromise, Accommodate, Compete,

What It Looks Like:

Any time your counterpart tries to renegotiate terms, or there is a change to an agreement due to the other party’s fault, there is an opportunity to ask the other side to compensate for the difference.


Example:

“I understand that things have changed on your side and that you didn’t plan things to end up this way. I will try my best to convince my boss, but I will need something to give her as she had given her sign-off based on what we discussed earlier. What can you give me to compensate?”


How To Deal With The Trade-Off:

Always make sure that you enter negotiations with high aspirations so that you can make concessions if you need to. The principle of reciprocity will play an important role here. If you are asked to concede due to things changing on your side, you should clearly state the fact that you are prepared to concede since things changed. This should serve as a precedent moving forward.

One On One Strategy Call

If protecting market share, margins and revenues is a high priority, why not schedule a no obligation negotiation strategy session with me to explore potential common ground? I will help you prioritize your approach to business negotiations and even if we don't decide to work together, I will tap into my almost 20 years of experience delivering business negotiation coaching and training assignments to Fortune 500 corporations in 65 countries to set you on course for improved results from your sales, purchasing and executive negotiations.

Click Here To Book A Strategy Session With Jan Potgieter Now To Formulate A Plan To Level Up Your Business Negotiation Results.

The Set Aside

Compatible With These Strategies: Collaborate, Compromise, Compete, Avoid

What It Looks Like:

When faced with a complicated issue, you might try to ignore the problem, park it for the time being, and move on to another point.


Example:

“Why don’t we come back to this later on and first explore the key reasons you want to pursue this project?”


How To Deal With The Set Aside:

Politely point out to your counterpart that the issue is of critical importance to you and that it is not possible to talk about other points until you’re able to understand the point they’re trying to set aside fully. “I agree that we should also explore the key reasons why we want to pursue this project, but before we can do that we need to understand this key point. Otherwise, it might be difficult for us to get the resources we need to ensure the success of any potential project.”


Association

Compatible With These Strategies: Collaborate, Compromise, Accommodate, Compete

What It Looks Like:

People like to do business with well-connected people. Position yourself as an expert in your counterpart’s industry by presenting testimonials, references, and associations with esteemed companies and individuals.


Example:

“The last time I spoke with Bill Gates, he asked me the same question. He faced similar issues to what you’re facing, and he contracted us to take care of it. This is how we addressed his issues.”


How To Deal With Association:

You have to be aware that you will be more likely to move in your counterpart’s direction if they can offer examples of people or organizations that you respect as having taken similar action to what they would like you to consider. Be cautious about name-dropping, however, unless you know for sure that your association will stand up to scrutiny.

Funny Money

Compatible With These Strategies: Compromise, Compete

What It Looks Like:

Offer financial arrangements that make it appear that the price is lower than it is. This is often done by spreading the cost over time (buy now, pay later).


Example:

“You’ve made a great decision. Let’s complete the lease agreement, but before we get started, I should mention that for only $10 per week, you can add the service plan. The amount is so small you probably won’t even notice it.”


How To Deal With Funny Money

Make sure that you state upfront that agreement is dependent on agreeing on all terms. In other words, there is no agreement until there is agreement on all terms. You could also use Funny Money in reverse—for example: ‘Does the lease agreement include the service plan?’


Print & Policies

Compatible With These Strategies: Collaborate, Compromise, Compete

What It Looks Like:

People lend more weight to the written word and company policies than just the spoken word.


Example:

“I’m sorry, this is just company policy. I’m not able to move outside of the parameters allowed by the policy.”


How To Deal With Print & Policies:

You could ask very diplomatically if you could be sent a copy of the policy to help your internal discussions. In some cases, when you do this, you will notice that a way can be found around the policy issue. If your counterpart does send you a copy of their policy, you can respond by asking what the process is to review and change the policy or what has been done in the past to gain exceptions to policies.


The Vice

Compatible With These Strategies: Compete

What It Looks Like:

Continuously asking for unreciprocated concessions until your counterpart refuses to make any more concessions.


Example:

“Thank you for your proposal. I’ve spoken to our finance director, and we would like you to improve your offer.” After the other side comes back with a price reduction, the process is repeated. “Thank you for the improvement in price. Unfortunately, we need you to sharpen your price some more.”


How To Deal With The Vice:

Whenever you are asked to improve your offer, you have to respond by asking for a target or a budget. For example: “Thank you for your feedback. I’m not sure that we’re able to improve our offer, as it already is our best offer. What is your budget so that I can take this back to my colleagues to workshop whether something could be done to bridge the gap?”


Planted Information

Compatible With These Strategies: Compete

What It Looks Like:

You are probably often presented with information that is not strictly true by your counterparts, and it can appear to be especially compelling if the information is learned by chance rather than explicitly provided by your counterpart themselves.


Example:

One of your counterpart’s team members passes a note to one of their team members stating more favorable terms than what you’re offering. During a break, they leave the note lying on the table so you can see it.


How To Deal With Planted Information:

Be aware that planted information will serve to anchor your expectations. Being adequately prepared is your best defense against planted information. Specifically, you should be very familiar with the competitive landscape so that you significantly reduce the likeliness of falling prey to this tactic.


The Hot Potato

Compatible With These Strategies: Collaborate, Compromise, Compete

What It Looks Like:

Your counterpart attempts to make their problem your problem in the hope that you will assume responsibility for solving it.


Example:

“We would love to move ahead with your $50,000 offer, but unfortunately our budget is limited to only $35,000.”


How To Deal With The Hot Potato:

Pass it right back. For example: “Oh, ok. If you only have $35,000, do you want to reduce the scope of work for now and take some time to see if you can increase your budget?”

One On One Strategy Call

If protecting market share, margins and revenues is a high priority, why not schedule a no obligation negotiation strategy session with me to explore potential common ground? I will help you prioritize your approach to business negotiations and even if we don't decide to work together, I will tap into my almost 20 years of experience delivering business negotiation coaching and training assignments to Fortune 500 corporations in 65 countries to set you on course for improved results from your sales, purchasing and executive negotiations.

Click Here To Book A Strategy Session With Jan Potgieter Now To Formulate A Plan To Level Up Your Business Negotiation Results.

The Flinch

Compatible With These Strategies: Collaborate, Compromise, Accommodate, Compete, Avoid

What It Looks Like:

A physical reaction such as gasping for air or a visible expression in response to a statement, anchor, or offer.


Example:

‘Wow. I didn’t realize that your price would be twice as high as your nearest competitor.”


How To Deal With The Flinch:

Make a conscious decision to expect the flinch from your counterpart, particularly when you’re up against professional buyers as the flinch is “Buying 101.” Often, the flinch will be followed by silence. Make sure that you don’t fill the silence with a concession. Get comfortable with silence.


Limits

Compatible With These Strategies: Collaborate, Compromise, Compete

What It Looks Like:

Your counterpart lets you know that they have set limits for money, time, capacity, personnel, etc.


Example:

“I’m only authorized to sign off on amounts below $100,000, and the project must be delivered within a maximum of three months. If you’re not able to bring your price down to below $100,000 and guarantee delivery within three months, we won’t be able to proceed.’


How To Deal With Limits:

You should ensure that you have leverage by creating scarcity around your recommended course of action. In other words, if there is nothing unique about your offering and suggestions, then there is no incentive for your counterpart to find a way to exceed their limit (artificial or not).


Competition

Compatible With These Strategies: Collaborate, Compromise, Accommodate, Compete

What It Looks Like:

Your counterpart tells you that they have other options available.


Example:

“Your competitor offered us a price that is thirty percent lower than the price you offered.”


How To Deal With Competition:

Professional buyers never go to a shortlist of one. You should fully expect any buyer to tell you that they have a better offer from your competitor(s). Remember that making concessions in negotiation is what creates satisfaction for your counterparts. This means you always need to leave yourself some room to make concessions. The target should not necessarily be to beat your competition’s offer, but to establish value in support of your offer—while also making small concessions and demonstrating to your counterpart that you are prepared to move in their direction.


Deliberate Mistake

Compatible With These Strategies: Compete

What It Looks Like:

This unethical tactic is intended to gain an unreciprocated concession from you.


Example:

A seller may deliberately leave out or under-price one of the elements of a proposal.


How To Deal With The Deliberate Mistake:

Don’t accept this tactic. The whole negotiation should be reopened if the terms need to change in any way after an agreement has been reached. Using this tactic might very well damage the relationship beyond repair.


Cherry Picking

Compatible With These Strategies: Compromise, Compete

What It Looks Like:

Buyers attempt to create their dream deal by asking for a detailed breakdown of your offer. In some cases, they may deliberately invite you to quote for more features and elements than what they are expecting to buy because they expect to get a reduced bundle price. Then, once you’ve submitted the offer, they ask you to break it down into its constituent parts, and they demand to pay the same price for only buying single elements of your offer.


Example:

“Thank you for breaking down your cost estimate. We would like to only proceed with items A, B, and C, and won’t be needing any of the other items quoted. Of course, we would expect the bundle discounted price to be kept in place for all items quoted.”


How To Deal With Cherry Picking:

Make sure that in your terms and conditions there is an obvious statement that says that the price quoted is conditional on purchasing the entire bundle. Even better, price each of the elements of the package at an individual rate and then clearly display the discount that is put against each item as it becomes part of the package. This way your counterpart can cherry pick all they want, and you will still make a margin on the individual elements.


Personal Attacks

Compatible With These Strategies: Compete

What It Looks Like:

Personal attacks are often deliberate attempts to throw you off balance and get you to respond emotionally.


Example:

“Your approach is completely amateur. You and your company cannot be trusted. Get your manager to send me someone capable of making a decision.”


How To Deal With Personal Attacks:

Never respond to personal attacks by defending yourself or returning the favor and attacking your counterpart personally. The best response is to reframe the negotiation or to call for an adjournment. Example: “If I were you, I probably would have said the same thing. I would like us to focus on your key objectives for a moment as I would like to invest the best effort possible in attempting to meet your needs.”

Reliance On Authorities

Compatible With These Strategies: Collaborate, Compromise, Accommodate, Compete

What It Looks Like:

The validity and gravity of your argument are enhanced when someone who is deemed to be an expert in the field supports the view and recommendations that you are proposing.


Example:

“As you can see from the research study done by Awesome Research Company, our recommendation is in line with what the top three companies in this industry are doing.”


How To Deal With Reliance On Authorities:

In the first instance, you should be aware of the powerful impact of this tactic on how you view the information presented by your counterpart. Secondly, you should ensure that you highlight the issues/features that are unique to you and your organization and therefore make you less similar to the references that they are citing.


Take It Or Leave It

Compatible With These Strategies: Compete

What It Looks Like:

A tactic that communicates the willingness of your counterpart to walk away from the table if certain conditions are not met.


Example:

“I’m afraid that it will not be possible to reach an agreement based on the terms that you’ve suggested.”


How To Deal With Take It Or Leave It:

You have two options. If you don’t have any viable alternatives available, you may have to be accommodating to ensure that you can close the deal. If you do have workable options available—or you wish to avoid creating precedents—then you should do a “soft walk away” when confronted with the take-it-or-leave-it tactic. For example: “I’m really sorry, but it doesn’t look like we will be able to reach agreement on the terms proposed. We stand ready to continue discussions at any time, but fully understand that you will need to take time to review your position. If anything changes, I can commit to prioritizing our response to get the negotiation moving forward.”


The Hustler

Compatible With These Strategies: Collaborate, Compromise, Accommodate, Compete

What It Looks Like:

The value of a service rendered diminishes quickly after it has been delivered. In other words, a concession that you’ve made to your counterpart will soon lose its value if not reciprocated immediately. This means you may be asked to provide a service and then after you’ve delivered the service that resolved your counterpart’s issues they can take all the time they need to pay you, or not even pay you at all, since their problem is now solved.


Example:

“Will you please just focus on getting the project done; we can talk about the money later on.”


How To Deal With The Hustler:

Always ask for a reciprocal concession when you make a concession. Agree on the final price and terms before you start work. If you don’t have an established relationship, don’t pay upfront in full before the project commences. Stagger the payments to match completed milestones.


Precedents

Compatible With These Strategies: Collaborate, Compromise, Accommodate, Compete

What It Looks Like:

A precedent serves as a guide or justification for subsequent situations. Lack of precedent can also be used as a reason for turning down an argument or specific point.


Example:

“You’ve charged us $10 per widget for the last twelve months. There is no objective justification for a price increase.” Or “I can see that you are new. You guys always offer us at least a 15% discount, as do your competitors.”


How To Deal With Precedents:

When you make concessions on key points, you should include a clause that states explicitly that it is a one-time concession and will not apply as a standard operating procedure in the future. You can use this to your advantage by citing previous conduct by your counterparts as justification for the course of action you wish them to pursue this time.


Good Cop/Bad Cop

Compatible With These Strategies: Compromise, Compete

What It Looks Like:

The idea behind this tactic is to increase the other party’s stress level on the one hand (bad cop) and induce cooperation on the other hand by using the emotional appeal (good cop).


Example:

“I’m not even going to show your proposal to my boss. She’s not going to be happy that your price is so much higher than all your competitors and I want to protect the relationship between our companies. I’m going to give you a chance to go and review your proposal and reduce your price substantially before I show it to her for her approval.”


How To Deal With The Good Cop/Bad Cop:

The first thing is that you should be aware that this is very often a planned tactic. The intent of this tactic, and all tactics for that matter, is to get you to soften your position and offer an unreciprocated concession. When you recognize this tactic, you should remember to connect any concession you may make to receiving a counter-concession of equal or similar value.


Extreme Offers

Compatible With These Strategies: Compromise, Compete

What It Looks Like:

Asking for significantly more than you expect to settle for eventually. This tactic has a definite cultural connotation and is viewed as an acceptable tactic in some cultures (usually cultures where there is a tendency to allow your counterpart to save face). In Western cultures, the use of this tactic will often result in parties walking away from the negotiation.


Example:

“We would expect to only pay $ 20,000 for this type of solution ($40,000 in reality).”


How To Deal With The Extreme Offer:

If you suspect that the extreme offer tactic is being used, it is imperative that you re-anchor the outrageous offer with your own equally extreme counter-offer without defending your offer or attacking your counterpart’s offer. This will create room for your counterpart to ‘save face’ and move in your direction. If you choose to defend your proposal or attack your counterpart’s offer, then you will be very unlikely to reach an agreement.


The Trial Balloon

Compatible With These Strategies: Collaborate, Compromise, Accommodate, Compete

What It Looks Like:

You float a possible solution to see if your counterpart might run with it or discard it. This is useful for exploring possibilities that could lead to closing a deal.


Example:

“Would the price change if we increased the volume by thirty percent?”


How To Deal With The Trial Balloon:

Should your counterpart use this tactic, it is usually a good sign that they are prepared to be at least compromising in their approach. If the suggestion doesn’t meet your expectations, you could respond to the trial balloon by “floating” your own trial balloon.


Splitting The Difference

Compatible With These Strategies: Collaborate, Compromise, Compete

What It Looks Like:

Agreeing to settle at a point that is halfway between your stated position and your counterpart’s. It could be seen by both parties as a fair way to end discussions and display compromising behavior.


Example:

“You asked for $10 per unit and our budget is $5 per unit. Shall we settle on $7.50 per unit?”


How To Deal With Splitting The Difference:

If your counterpart suggests splitting the difference you can respond in one of two ways:

  1. Accept their offer to split the difference, and thereby demonstrate that you are willing to compromise (this could only work if the suggested strike position is within your bargaining zone).

  2. Suggest splitting the difference between their suggested amended position and your stated position, for example:“If you are prepared to pay $7.50, I would be able to split the difference between $7.50 and $10.00 and settle at $8.75.”

The Decoy

Compatible With These Strategies: Compromise, Compete

What It Looks Like:

A tactic used to take your counterpart’s attention away from the real issue in the hope that you would offer concessions for the decoy issue. This effectively creates a fake bargaining position to get a concession from your counterpart on issues that are important to you.


Example:

“I will need delivery to take place within thirty days (knowing that ninety days is the minimum delivery time).”


How To Deal With The Decoy:

This tactic is particularly prevalent in contract negotiations. A demand may be made for you to agree to unreasonable guarantees in terms of liability in the full knowledge that you won’t agree. This is done so that your counterparts can demand a concession from you in return for them altering that contract clause. The best thing to do if you are expecting the decoy to be used is to voice your own equally unreasonable decoy expectation in return, which may then assist you trading a red herring for a red herring.


Deferring To Higher Authority

Compatible With These Strategies: Compromise, Accommodate, Compete

What It Looks Like:

Being unable to agree without the approval of someone with a higher level of authority.


Example:

“Your proposal looks great; I just need to run it past my board of directors.” When they come back, they state: “The board of directors won’t accept your offer unless you reduce your price by fifteen percent to match the available budget.”


How To Deal With The Higher Authority:

When you first start your negotiations, ask the question, “In addition to you, who else needs to sign off on a final agreement?” This question honors your counterpart as being a vital part of the decision making process, yet at the same time allows you to uncover other stakeholders.


The Bottom Line

Compatible With These Strategies: Compromise, Compete

What It Looks Like:

You ask your counterpart to disclose their bottom line with regards to a negotiated issue in an attempt to get them to decrease the size of their bargaining zone.


Example:

“We appreciate the time you’ve taken with your proposal. We need something much simpler—what would be your best price for this?”


How To Deal With The Bottom Line:

Hold your ground. You should let them know that you’ve quoted your best price possible for the conditions offered. If the price does not meet their expectations, it may be reviewed alongside other supporting conditions (payment terms, volumes, logistics, etc.).


Preconditions

Compatible With These Strategies: Compete

What It Looks Like:

An attempt to gain concessions from your counterpart before the negotiation has even started. Negotiation will then (supposedly) only start based on compliance with the precondition.


Example:

“We will only accept proposals from suppliers who agree to our one hundred and twenty-day payment terms.”


How To Deal With Preconditions:

You should indicate that you are not compliant with the preconditions but that you are happy to negotiate a transaction premised on mutual gain, should they wish to continue discussions after reviewing your proposal.


The Nibble

Compatible With These Strategies: Compromise, Accommodate, Compete

What It Looks Like:

Just before the deal is closed, an additional item or request is made that seems insignificant against the overall value or context of what is being agreed.


Example:

“Just before we sign off the deal, I have to let you know that our standard payment term is ninety days rather than the thirty days that you indicated in your proposal.”


How To Deal With The Nibble:

Make sure that you summarize the conditions upon which your offer was prepared so that no ambiguity can be exploited by your counterparts. For example, “Our price of $10,000 is based on payment terms of thirty days, delivery in seven days and subject to receiving your signed agreement by the end of this week.”


Moral/Emotional Appeal

Compatible With These Strategies: Collaborate, Compromise, Accommodate, Compete

What It Looks Like:

An appeal being framed as the “fair” or “right” way. The intent is to make the counterpart feel that by disagreeing with the proposal, they are unfair or politically incorrect. The tactic is designed to rely on your emotions rather than the facts that support the negotiation.


Example:

“Your proposal will lead to fifty families having no income anymore. It will not make you look good, never mind the fact that the media will have a field day and you will not feel very proud of your decision.”


How To Deal With The Moral/Emotional Appeal:

Re-frame the negotiation to bring the focus back to the reason that the negotiation is taking place in the first instance. For example, “I appreciate your insight on this matter. As we stated when we started our meeting, let’s move towards agreement on terms that make sense to us both.”


Delaying Or Stalling

Compatible With These Strategies: Compromise, Compete, Avoid

What It Looks Like:

Delaying and stalling is a tactic that is designed to wear you out and get you to be more flexible. It can also be used when your counterpart needs more time to think or get their affairs in order.


Example:

“I’m sorry, but we’ve had to postpone deciding on this matter for at least a month. Please send me your very best pricing proposal so that we have a clear view of where you are positioned when we meet to reach a decision in a month.”


How To Deal With Delaying Or Stalling:

Be aware that if you’re representing a publicly-listed company, professional buyers will often postpone coming to a final agreement to the end of quarter or end of the financial year, as they know you will be more likely to offer discounts at these times. Leave yourself room to make a last-minute concession so that you don’t have to move outside of your objectives when they stall until the end of the quarter. They will likely offer you the opportunity to get the deal done before the quarter closes, as long as you can make some concessions that favor them.


eAuction

Denying your counterpart the opportunity to negotiate with you because you see what they’re providing to you as a commodity.


Example:

Invitations to participate in eAuctions on eProcurement platforms.


How To Deal With eAuctions:

Prepare to make several concessions during the process. These concessions don’t have to be significant, but you want to demonstrate that you are prepared to move in your counterpart’s direction. Make sure that you don’t become too emotionally involved in the process and as a result, go beyond your limits. It may even be advisable to have someone who is not involved with the deal administer the e-auction response process, as this will go a long way towards protecting you from becoming emotional in your responses.

One On One Strategy Call

If protecting market share, margins and revenues is a high priority, why not schedule a no obligation negotiation strategy session with me to explore potential common ground? I will help you prioritize your approach to business negotiations and even if we don't decide to work together, I will tap into my almost 20 years of experience delivering business negotiation coaching and training assignments to Fortune 500 corporations in 65 countries to set you on course for improved results from your sales, purchasing and executive negotiations.

Click Here To Book A Strategy Session With Jan Potgieter Now To Formulate A Plan To Level Up Your Business Negotiation Results.


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