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.