Many people ask me if they should negotiate face-to-face, by telephone, or through e-mail. In many instances the answer will be dictated by considerations of cost, location, timing and convenience. In other instances, you will have a choice.
Negotiating face-to-face is more formal, but fosters better communication and understanding. After all, you have the benefit of observing facial expression, body language, and other non-verbal cues. As a result, face- to-face negotiation is more likely to result in a win-win outcome. This makes it suitable for negotiating more substantial matters.
Many negotiations are now conducted by e-mail. E-mail communication is more likely to be misinterpreted than face-to-face or telephone communication, but it might be the best choice for small matters, or where there are time, travel or cost constraints. However, negotiating by e-mail is least likely to result in a win-win outcome.
Negotiating by telephone is a quick, low cost option. This channel ranks in between face-to-face meetings and e-mail exchanges in terms of clarity of communication. It is good for routine matters, or those not weighty enough to justify face-to-face contact.
There are a few other advantages to telephone negotiations:
They take less time than face-to-face meetings. Sometimes a simple •
face-to-face negotiation is drawn out simply to justify the time and effort required to travel to your counterpart’s office.
It is easier to say “no” over the phone. The telephone provides a buffer •
and eliminates the need to look into the eyes of the disappointed party.
The telephone is less intimidating than face-to-face meetings for less •
assertive negotiators, so this helps the less powerful party. Disappointed eyes are bad enough, but an intimidating face is even harder to handle!
It gives substance and logic more weight relative to style and form. •
There may be some pomp and circumstance in a face-to-face meeting, whereas a telephone negotiation allows you to cut to the chase.
The more important the negotiation, the more desirable it becomes to negotiate face-to-face.
Concessions
Almost every negotiation requires concessions before you can reach an agreement. A concession is when you moderate your position to move closer to your counterpart. For example, raising the amount of your offer, lowering your asking price, or offering other value to your counterpart are all forms of concession. It is important that you make concessions the right way.
Suppose you are a buyer negotiating to purchase an item. You are prepared to pay up to $1,000 more than your initial offer. How should you pattern your concessions?
First of all, don’t offer a concession right away. If you appear too willing to give concessions, your negotiating partner will assume you will give more as the negotiation progresses. Make your partner work for it. The harder he works, the more he values the result.
Secondly, do not offer a large portion of your $1,000 at once. This also signals that more concessions are on the way. Start with a modest concession, with later concessions of diminishing size. As your concessions get smaller, you signal that you are approaching your bottom line. Thirdly, avoid giving a concession without getting one in return. If you are asked for a concession, ask for something in exchange. For example, you could say “I could do X for you if you will do Y for me.” If you do find yourself making a unilateral concession to get a stalled negotiation moving again, make sure you don’t give another one until your counterpart concedes something to you. If you give two concessions in a row, your counterpart will ask for a third, and a fourth and a fifth.
Ultimatums
An ultimatum is a demand that something be done by a certain deadline, with a punishment for non-compliance. It is a threat that may or may not be believed by the recipient, and may or may not be carried out by the issuer. There are four ways in which an ultimatum can play out:
Successful bluff.
• The issuer doesn’t mean it, but the recipient believes it. The issuer got lucky.
Failed bluff.
• The issuer doesn’t mean it, and the recipient doesn’t believe it. The issuer loses credibility.
Successful ultimatum.
• The issuer means it, and the recipient believes it. The issuer gets his way.
Failed ultimatum.
• The issuer means it, but the recipient doesn’t believe it. The issuer must follow through with the threat or risk losing credibility.
The way I pattern my concessions will send important signals to my counterpart and influence his responses.
Aha! Moment
Make your concessions sparingly, taper them as the negotiation progresses, and always ask for something in return for every concession you give.
Issuing an ultimatum is a risky gambit. The result will depend in part on the resolve of the issuer and in part on whether the recipient believes it. The issuer may be more or less convincing, but he cannot be sure how the recipient will respond.
When you say, “That’s my final offer” or “Take it or leave it,” you put yourself into a corner. If you follow through with your ultimatum, you may lose a deal you wanted. If you don’t follow through, you lose credibility. Either way, you offend the other party.
If you must issue an ultimatum, give a gentle one rather than a harsh one. “Take it or leave it” is abrupt and insensitive to the other party. He will be offended. You can convey the same either/or message in a much nicer way. For example: “It’s the best I can do; work with me.” This does not sound like an ultimatum; it sounds like a plea for help. The recipient will not be offended, and may even be sympathetic.
Give your ultimatum with a less desirable alternative so your counterpart can choose. For example, “I know you could probably get your asking price eventually, but this is all we have in our budget.” The recipient might not like the prospect of waiting for a better offer, so your gentle ultimatum sounds appealing.
What should you do if your counterpart issues you an ultimatum? You have a few options:
Danger Zone
Do not give an ultimatum unless you are sure of yourself and really mean it. Explain why you are forced to insist on it — people like to hear a reason. Make it believable.
Offer a partial agreement and try to negotiate further. •
Make a counter offer. It is rarely either A or B. Offer them C — they •
might accept.
Ignore it and continue talking. Suggest they think about it and get back •
to you later. This reduces the pressure to follow through on their threat to maintain credibility, and allows them a face-saving way to back down. The more time that passes, the less likely they will follow through with their threat.
Walk away, but be civil. Circumstances change, and you may find •
yourself back at the negotiating table with them later. Or you may exercise your Plan B.