🤝 Mastering the Art of Negotiation

There is so much to cover in negotiation, but I want to focus on providing some tactics to help you become a better negotiator. In 2021, I interviewed Kwame Christian (🎧Ep 17) on mastering the art of negotiation. Among many accolades, Kwame is the founder and CEO of the American Negotiation Institute and host of the Negotiate Anything podcast. We uncovered common negotiation mistakes, identified better questions to ask, and broke down his compassionate curiosity framework to make negotiation simpler and more effective. You can use many of the lessons here for all the negotiations of daily life. 

Today’s posts are the key lessons I learned from Kwame and other strategies and tactics from Chris Voss and Andy Rachleff. 

Here’s what you can expect to take away from this newsletter:

• Understanding the keys to better negotiating

• How to use the compassionate curiosity framework

• The importance of labeling and mirroring

• How to prepare, even if you only have 3-minutes

• The power of anchoring

• When to walk away

Please share this post with a friend, colleague, or family member that would find this valuable. 

🗝 Key to Better Negotiations

Negotiation is an essential skill that can help you save money, increase earnings, and improve relationships. Many people struggle with it because the process is intimidating. The problem is they think about negotiation from the lens of what they need to say or how they say it. Instead, negotiation is more about listening and asking insightful questions.

You’ll get better results if you listen more and ask better questions.

🤔 Compassionate Curiosity

Negotiation is a logical game tied up by emotion. Even the most well-crafted arguments and statements won’t land if the person on the other side is in the wrong mental place to appreciate what you’re saying. It’s because you’ve done such a poor job of managing the emotional side of the conversation.

This is why Kwame created the Compassionate Curiosity framework, which can be used in highly emotional and challenging workplace and home conversations.

It’s a 3-step framework:

• Acknowledge and validate emotions

• Get curious with compassion

• Joint problem-solving

You seek to hone in on emotion by asking open-ended questions, summarizing what’s being said, demonstrating understanding through empathy. Repeat steps 1 and 2 until emotionality reduces; only then can you transition into more substantive problem-solving conversations.

Here’s what this framework achieves:

• Reduces that emotional distress at the beginning so that people can discuss at a higher level

• Gathers more information in a compassionate tone so people don’t get afraid to share information

• Creates an environment to work with the other side to figure out what works

This framework relies heavily on active listening, fully engaging with the other person’s perspective and emotions. It’s crucial because active listening builds trust and rapport.

🏷️ Labeling

Labeling is one tactic you can use in line with the Compassionate Curiosity framework. In his book, Never Split the Difference, Chris Voss talks about the power of labeling because it names the other person’s emotions to show that you understand and acknowledge their position.

Here’s how it works in practice:

Let someone talk in an emotional situation, rant, or aggressive discourse. When it’s your turn to speak, label.

• Detect the other person’s emotional state

• Summarize what they say and follow it with

  • “It seems like…”

  • “It sounds like…”

  • “It looks like…”

• Be quiet and let the other person talk

If your label is correct, they will agree and feel heard. If your label is wrong, they will correct you, and you lock in on the right emotion.

Here’s an example of negotiating a salary increase with your boss, but your boss is hesitant to give you the raise you’re asking for:

• You: I’ve been consistently outpacing my quota and taking on additional responsibilities; I’d like to talk to you about a raise.

• Your boss: I know you’ve done a great job, but I’m not sure now is right with our tight budget.

• You: It seems like you’re concerned about the budget and whether we can afford to give me the raise I’m asking for. Is that right? 

Labeling their concern about the budget shows that you understand their perspective and acknowledge their position. 

• Your boss: Yes, we are currently under some budget constraints.

• You: I understand that budgets are tight right now, but I think my contributions to the company justify the raise I’m asking for. Can you help me understand what budgeting constraints you have and how we might be able to work around them?

By labeling your boss’s concern about the budget, you’ve diffused any potential conflict and shown that you are willing to work with them to find a mutually beneficial solution.

📣 Mirroring

Where labeling makes someone feel understood, mirroring encourages someone to keep talking so you can gather more information. It’s another technique that Voss recommends, and it is the process of mimicking body language, tone of voice, and word choice to demonstrate similarity and connection. When negotiating, Voss says you should only focus on mirroring words. 

To use it effectively, repeat the last three words (or the most critical three) the person just said. By doing so, they will keep talking to maintain the connection with you.

Mirroring works so well because it taps into the human tendency to like and trust people who are similar to us. When we see someone who behaves similarly, we tend to feel more comfortable and open with them. This is known as the “liking” principle in psychology, which states that people prefer and be influenced by people they like.

Don’t just mimic everything; you want to mirror enough to show that you pay attention, but not too much that it comes across as insincere or manipulative.

Here’s an example of using mirroring to uncover more details about what your potential client is willing to spend before sharing the price:

• Client: We have a limited budget and want to get the most out of it.

• You: Limited budget?

• Client: We don’t want to spend more than $10,000 and want to ensure we’re getting the best value.

• You: Is getting the best value your top priority?

• Client: Yes, we care about value more than anything, even more than the timing of completion.

In this example, you learned about the $10,000 and that the client cared more about getting value on price than the timing.

This technique can uncover critical information, keep the negotiation going, and give you more opportunities to reach a mutually beneficial agreement.

✍️ How to Prepare

Preparation is the most crucial step in the negotiation process. When stressed, your body produces cortisol, a stress hormone that makes it difficult to think clearly. You must be sharp in negotiations, and cortisol prevents this.

Try role-playing as a part of your preparation:

• First, role-play as the person you’re going to talk to because you’ll start hearing yourself making arguments you never thought of before, which forces you to find validity and legitimacy in their statements.

• Second, role-play with a partner, colleague, or friend pretending to be the other party, and focus on what you fear most in the conversation. Start by sharing exactly what you’re afraid of. Ask your partner to ramp up the level of emotion to an unrealistic level but within the boundaries of the conversation.

You’ll be beyond prepared whenever you have the actual negotiation.

 

If you want access to Kwame’s negotiation prep guide, you can find it here.

The 3-Minute Prep

Sometimes, you don’t have days to prepare. That’s okay; try this 3-minute process.

Ask yourself:

1. What do I want and why?

2. What do they want and why? (Use your best guess, verify during the conversation)

3. What are all of the open-ended questions that I could ask?

❓ Open-ended Questions

Knowledge is power and power in a negotiation is leverage. The most valuable information is only found within their mind. So no matter how many Google searches or AI-powered prompting you do, open-ended questions are a necessary tool.

Ask open-ended questions because it creates that narrative response and leads to more explanation.

In transactional negotiations (like trying to get a hotel upgrade or reduce the price of a car), Kwame’s favorite is “What flexibility do you have?” It’s open-ended; it contains the assumption that there is flexibility, and it’s non-threatening.

Another powerful open-ended question is one that doesn’t even end in a question mark, “Tell me more about this” or “Help me understand that.”

The goal is to get the other person to expand and share their thoughts with as many words as it takes to get there.

🙊 Talk Less

Kwame uses the 70/30 rule: Listen 70% of the time, talk 30%.

If you let people talk about things they enjoy, it creates dopamine in their system, and they’ll associate positive feelings with you. It builds more trust and becomes self-fulfilling because they feel better about themselves. They start to like you more during the process, become more vulnerable, and provide excess information.

⚓ Anchoring

Anchoring is a negotiation tactic involving setting a reference point by making the first offer (price, deadline, etc.). The first offer serves as the “anchor,” which the rest of the negotiation revolves around. It works well because people tend to rely on the first piece of information they receive when making decisions. You can shape the other person’s perception of what’s reasonable and increase your bargaining power.

Here’s how anchoring can impact our decision-making, even when the anchor has no real relevance to the situation at hand:

Dan Ariely is a behavioral economist who conducted a famous study on anchoring at MIT. In the study, he asked participants to write down the last two digits of their social security numbers and then asked them to bid on various items, such as wine and chocolate.

The participants with higher two-digit numbers ended up bidding significantly more for the items than those with lower two-digit numbers. This is because the higher numbers served as an anchor point for their bids, even though the numbers had nothing to do with the actual value of the items being auctioned.

In negotiation, anchoring has the same psychological impact. But making the first offer might not always be in your best interest. Here’s Kwame’s rule of thumb:

• If you have as much or more information as the other side, you make the first offer.

• If you have less information, you let the other person make the first offer and then counter because every offer has to be substantiated by information, and that’s how you learn.

How to defend against anchors?

Now that you know about the power of anchors, you will have to defend against them. Sometimes, people will throw out an anchor and try to read your body language and see how you’re responding to it. When the anchor is outside the range of possibility, you should clarify that it’s not in the range of possibility so the negotiation doesn’t continue to revolve around it. 

Once the anchor is dismissed, Kwame suggests acting as if it was never even said because the more you talk about the anchor, the more legitimate it becomes and crystallizes in everyone’s mind.

That means that when you’re the one doing the anchoring, it’s best to find creative ways to anchor repeatedly so the other party will increasingly get comfortable with it the more you mention it.

If you aggressively receive an anchor, your reaction might be to attack the anchor. When you attack, the other person must defend it, forcing them to argue why that anchor is valuable and relevant.

This creates a psychological entrenchment scenario and makes the anchor even stronger. You want to shift the conversation away from the specifics of the anchor and instead try to figure out the rationale behind it.

🤝 Negotiating with Trust

One of the best lessons I’ve learned from legendary investor Andy Rachleff (🎧 Ep 19) wasn’t even on investing; it was negotiation. His usual tactic takes a different approach to anchoring. He prefers to give the other party your trust by telling them to “make me a fair offer, and I’ll take it.” Most people don’t want to be thought of as taking advantage of you, which means rarely will someone offer something unfair. If they make an unfair offer, you can always walk away, which is why he often describes this tactic as: “Put the gun in the other person’s hand. If they fire, you don’t work with them.” 

I’ve used this tactic countless times, and it’s become my go-to for negotiatin. The only situation where it doesn’t work well is when you’re negotiating with someone with much less information about what might be fair. In that case, I usually share my information with them. For example, I’ve shared market compensation data with prospective employers and asked them to make an offer that’s fair to the market. I’ve also been on the other side of a hiring situation for some freelance work and given similar market comp data to someone and just asked them to let me know a fair rate for their work.

So far, I haven’t come across an unfair person, but I usually don’t like working with people that try to take advantage of others, so in a way, this tactic is also a great way to filter out people you might not want to work with in the first place.

🚶 Walk Away

Walking away is an art and a science.

When to Walk? It depends on how much you need the deal and how much time you have to close it because there’s an opportunity cost to continue. Kwame suggests having a defined stopping point to avoid wasting your time in a negotiation. 

However, disclosing your stopping point can be risky because it can weaken your position. It is generally not recommended unless you have strong leverage or are confident that the other party will not take advantage of the information. If you are at a stalemate, disclosing your stopping point may encourage the other party to be more flexible in their offer.

Sometimes the worst outcome is a deal that should have never happened.

How to Walk? Don’t just throw your hands up and say, “I’m never coming back.”

Instead, try this (from Kwame):

“Based on the way the circumstances are right now, this isn’t a deal that could work for me/us…But if anything changes on your end [person’s name], let me/us know, and we would be more than happy to continue the conversation. And similarly, if anything changes on my/our end, we’ll do the same.”

You don’t want anyone feeling like a loser in a negotiation. You’ve given both yourself and the other side an out. If a party was bluffing, they could now use the excuse of more information to continue the conversation without losing dignity and respect. And if things legitimately changed, then the door is still open.

👪 Compassionate Curiosity & Family

Funny enough, a lot of what I shared above is also relevant at home. I have two young children…and my oldest daughter is at a point where the negotiations have started. For the parents reading this, I want to share an example where Kwame used compassionate curiosity with his son, who didn’t want to go to bed.

• Kwame: It sounds like you don’t want to go to bed right now.

• Kai: No, I don’t want to go to bed.

• Kwame: Okay. That makes sense. Can you tell me a bit more about that?

• Kai: I don’t want to go to bed right now. I want to stay up, and I want to cuddle with you and Mommy on the couch and watch TV until it gets later, until you all go to bed.

• Kwame: So, it sounds like the reason you don’t want to go to bed is because you want to spend time with me and Mommy, is that right?

• Kai: Yeah.

• Kwame: That makes sense; we like spending time with you. So what is it about going to bed that’s important?

• Kai: I have to go to bed, so I can get smart.

• Kwame: Okay. What else is good about getting sleep?

• Kai: Well, if I go to sleep, then I could grow up and be big and strong, like you.

• Kwame: So, what do you think we should do right now?

• Kai: I should probably go to sleep.

• Kwame: Okay. Sounds good; I’ll see you later.

Using this framework helps Kai think for himself and develop his conclusions. As parents, your voice becomes the internal monologue for your children’s decisions, so instead of being the judgmental father, Kwame wanted to be compassionately curious.

Sometimes negotiations don’t go how you want them to, especially with your kids.

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