One of the cardinal rules of Power Negotiating is that you should ask the other side for more than you expect to get. Henry Kissinger went so far as to say, “Effectiveness at the conference table depends upon overstating one's demands.”
Think of some reasons why you should do this:
- Why should you ask the store for a bigger discount than you think you have a chance of getting?
- Why should you ask your boss for an executive suite although you think you'll be lucky to get a private office?
- If you're applying for a job, why should you ask for more money and benefits than you think they'll give you?
- If you're dissatisfied with a meal in a restaurant, why should you ask the captain to cancel the entire bill, even though you think they will take off only the charge for the offending item?
If you're a salesperson:
- Why, if you are convinced that the buyer wants to spread the business around, should you still ask for it all?
- Why should you ask for full list price even if you know it's higher than the buyer is paying now?
- Why should you ask the other person to invest in the top of the line even when you're convinced they're so budget conscious that they'll never spend that much?
- Why should you assume that they'd want to buy your extended service warranty even though you know they've never done that in the past?
If you thought about this, you probably came up with a few good reasons to ask for more than you expect to get. The obvious answer is that it gives you some negotiating room. If you're selling, you can always come down, but you can never go up on price. If you're buying, you can always go up, but you can never come down. What you should be asking for is your MPP-your maximum plausible position. This is the most that you can ask for and still have the other side see some plausibility in your position.
The less you know about the other side, the higher your initial position should be, for two reasons:
1. You may be off in your assumptions. If you don't know the other person or his needs well, he may be willing to pay more than you think. If he's selling, he may be willing to take far less than you think.
2. If this is a new relationship, you will appear much more cooperative if you're able to make larger concessions. The better you know the other person and his needs, the more you can modify your position. Conversely, if the other side doesn't know you, their initial demands may be more outrageous.
If you're asking for far more than your maximum plausible position, imply some flexibility. If your initial position seems outrageous to the other person and your attitude is “take it or leave it,” you may not even get the negotiations started. The other person's response may simply be, “Then we don't have anything to talk about.” You can get away with an outrageous opening position if you imply some flexibility.
If you're buying real estate directly from the seller, you might say, “I realize that you're asking $200,000 for the property and based on everything you know that may seem like a fair price to you. So perhaps you know something that I don't know, but based on all the research that I've done, it seems to me that we should be talking something closer to $160,000.” At that the seller may be thinking, “That's ridiculous. I'll never sell it for that, but he does seem to be sincere, so what do I have to lose if I spend some time negotiating with him, just to see how high I can get him to go?”
If you're a salesperson you might say to the buyer, “We may be able to modify this position once we know your needs more precisely, but based on what we know so far about the quantities you'd be ordering, the quality of the packaging and not needing just-in-time inventory, our best price would be in the region of $2.25 per widget.” At that the other person will probably be thinking, “That's outrageous, but there does seem to be some flexibility there, so I think I'll invest some time negotiating with her and see how low I can get her to go.”
Unless you're already an experienced negotiator, here's the problem you will have with this. Your real MPP is probably much higher than you think it is. We all fear being ridiculed by the other. So, we're all reluctant to take a position that will cause the other person to laugh at us or put us down. Because of this intimidation, you will probably feel like modifying your MPP to the point where you're asking for less than the maximum amount that the other person would think is plausible.
Another reason for asking for more than you expect to get will be obvious to you if you're a positive thinker: You might just get it. You don't know how the universe is aligned that day. Perhaps your patron saint is leaning over a cloud looking down at you and thinking, “Wow, look at that nice person. She's been working so hard for so long now, let's just give her a break.” So you might just get what you ask for and the only way you'll find out is to ask for it.
In addition, asking for more than you expect to get increases the perceived value of what you are offering. If you're applying for a job and asking for more money than you expect to get, you implant in the personnel director's mind the thought that you are worth that much. If you're selling a car and asking for more than you expect to get, it positions the buyer into believing that the car is worth more. Another advantage of asking for more than you expect to get is that it prevents the negotiation from deadlocking. Take a look at the Persian Gulf War. What were we asking Saddam Hussein to do? (Perhaps asking is not exactly the right word.)
President George Bush, in his state of the Union address used a beautiful piece of alliteration, probably written by Peggy Noonan, to describe our opening negotiating position. He said, “I'm not bragging, I'm not bluffing and I'm not bullying. There are three things this man has to do. He has to get out of Kuwait. He has to restore the legitimate government of Kuwait (don't do what the Soviets did in Afghanistan and install a puppet government). And he has to make reparations for the damage that he's done.” That was a very clear and precise opening negotiating position. The problem was that this was also our bottom line. It was also the least for which we were prepared to settle. No wonder the situation deadlocked. It had to deadlock because we didn't give Saddam Hussein room to have a win.
If we'd have said, “Okay. We want you and all your cronies exiled. We want a non-Arab neutral government installed in Baghdad. We want United Nations supervision of the removal of all military equipment. In addition, we want you out of Kuwait, the legitimate Kuwaiti government restored and reparation for the damages that you did.” Then we could have gotten what we wanted and still given Saddam Hussein a win.
I know what you're thinking. You're thinking, “Roger, Saddam Hussein was not on my Christmas card list last year. He's not the kind of guy I want to give a win to.” I agree with that. However, it creates a problem in negotiation. It creates deadlocks.
From the Persian Gulf scenario, you could draw one of two conclusions. The first (and this is what Ross Perot might say) is that our State Department negotiators are complete, blithering idiots. What's the second possibility? Right. That this was a situation where we wanted to create a deadlock, because it served our purpose. We had absolutely no intention of settling for just the three things that George Bush demanded in his state of the Union address.
General Schwarzkopf in his biography It Doesn't Take a Hero said, “The minute we got there, we understood that anything less than a military victory was a defeat for the United States.” We couldn't let Saddam Hussein pull 600,000 troops back across the border, leaving us wondering when he would choose to do it again. We had to have a reason to go in and take care of him militarily.
So, that was a situation where it served our purpose to create a deadlock. What concerns me is that when you're involved in a negotiation, you are inadvertently creating deadlocks, because you don't have the courage to ask for more than you expect to get.
A final reason – and it's the reason Power Negotiators say that you should ask for more than you expect to get – is that it's the only way you can create a climate where the other person feels that he or she won. If you go in with your best offer up front, there's no way that you can negotiate with the other side and leave them feeling that they won.
- These are the inexperienced negotiators always wanting to start with their best offer.
- This is the job applicant who is thinking, “This is a tight job market and if I ask for too much money, they won't even consider me.”
- This is the person who's selling a house or a car and thinking, “If I ask too much, they'll just laugh at me.”
- This is the salesperson who is saying to her sales manager, “I'm going out on this big proposal today, and I know that it's going to be competitive. I know that they're getting bids from people all over town. Let me cut the price up front or we won't stand a chance of getting the order.”
Power Negotiators know the value of asking for more than you expect to get. It's the only way that you can create a climate in which the other side feels that he or she won. Let's recap the five reasons for asking for more than you expect to get:
1. You might just get it.
2. It gives you some negotiating room.
3. It raises the perceived value of what you're offering.
4. It prevents the negotiation from deadlocking.
5. It creates a climate in which the other side feels that he or she won.
In highly publicized negotiations, such as when the football players or airline pilots go on strike, the initial demands that both sides make are absolutely outlandish. I remember being involved in a union negotiation where the initial demands were unbelievably outrageous. The union's demand was to triple the employees' wages. The company's opening was to make it an open shop-in other words, a voluntary union that would effectively destroy the union's power at that location.
Power Negotiators know that the initial demands in these types of negotiations are always extreme, however, so they don't let it bother them. Power Negotiators know that as the negotiations progress, they will work their way toward the middle where they will find a solution that both sides can accept. Then they can both call a press conference and announce that they won in the negotiations.
An attorney friend of mine, John Broadfoot from Amarillo, Texas, tested this theory for me. He was representing a buyer of a piece of real estate, and even though he had a good deal worked out, he thought, “I'll see how Roger's rule of ‘Asking for More Than You Expect to Get,' works.” So, he dreamt up 23 paragraphs of requests to make of the seller. Some of them were absolutely ridiculous. He felt sure that at least half of them would be thrown out right away. To his amazement, he found that the seller of the property took strong objection to only one of the sentences in one of the paragraphs.
Even then John, as I had taught him, didn't give in right away. He held out for a couple of days before he finally and reluctantly conceded. Although he had given away only one sentence in 23 paragraphs of requests, the seller still felt that he had won in the negotiation. So always leave some room to let the other person have a win. Power Negotiators always ask for more than they expect to get.