The New Rules

How to Become the Smartest Person…in Any Room

Negotiators must be active listeners in order to gain the trust of the other party.

Mirroring

The late-night FM DJ voice: Basically, keep it calm and slow. Use this selectively to make a point. When done properly, the late-night FM DJ voice has the power to create an aura of authority and trust without making the other party defensive.
The playful/positive voice: This should be your default voice. It’s the voice of an easygoing, good-natured person. Your attitude is light and encouraging.
The direct/assertive voice: This should be used as rarely as possible because this has the potential to create pushback.

Mirroring works magic. Repeat the last three words (or the critical one to three words) of what someone has just said because we fear what is different and find comfort in similarity. Using mirroring encourages the other party to empathize and bond with you, keep people talking, buy your party some time, and eventually reveal their strategy.

A study by psychologist Richard Wiseman on two groups of waiters concluded that the average tip of the waiters who mirrored was 70 percent more than of those who used positive reinforcement.

The five-step process to own any negotiation process is:

Use the late-night FM DJ voice;
Start with phrases like, “I’m sorry…”;
Mirror;
Use silence effectively;
and Repeat.

Labeling

Don’t Feel Their Pain, Label It

Labeling is a way of validating someone’s emotion by acknowledging it. The first step to labeling is detecting the other party’s emotional state. The trick to spotting feelings is to pay close attention to changes people undergo when they respond to external events. And more often than not, in a negotiation scenario, these external events are your words. Once you’ve spotted an emotion you want to highlight, the next step is to label it aloud. Labels can be phrased as statements or questions. Labels almost always begin with the following phrases:

“It seems like…”
“It looks like…”
“It sounds like…”

Mastering “No”

How to Generate Momentum and Make It Safe to Reveal the Real Stakes

Pushing for a hard “Yes” doesn’t get you any closer to a victory. It only irks the other party. Contrary to popular belief, “No” is the start of the negotiation, not the end of it.

In a negotiation scenario, “No” provides a great opportunity for you and the other party to clarify what you really want by eliminating what you don’t want.

“No” can often mean:

I am not yet ready to agree;
You make me feel uncomfortable;
I don’t understand;
I can’t afford it;
I need more information;
I’d prefer talking to someone else.

And there are three kinds of “Yes”:

Counterfeit: This is one where the other party plans on saying “No” but feels that a “Yes” is an easier escape route.
Confirmation: This is a generally innocent, reflexive response to a black or white question.
Commitment: This is the real deal, one that most often leads to a definite outcome such as the signing of a contract. But given that these three sound almost the same, you’ll have to learn to recognize which one is being used.

If you’re trying to sell something, don’t start with “Do you have a few minutes to talk?” Instead ask, “Is now a bad time to talk?” Either you get “Yes, it is a bad time” followed by a good time or a request to go away, or you get “No, it’s not” and total focus.

As you can see, a “No” can do a lot:

It can allow the real issues to be brought forth.
It protects you from making poor decisions—and course-correcting ineffective ones.
It slows things down, giving you time to analyze decisions and agreements.
It helps you feel safe, secure, and emotionally comfortable.
It moves everyone’s efforts forward.
Saying “No” makes the speaker feel safe, secure, and in control, so trigger it. That’s why “Is now a bad time to talk?” is always better than “Do you have a few minutes to talk?”

If a potential business partner is ignoring you, contact them with a clear and concise “No”-oriented question that suggests that you are ready to walk away. “Have you given up on this project?” works wonders.

That’s Right

The Two Words that Immediately Transform Any Negotiation

“That’s right“—the two words that can transform any negotiation. “That’s right” is better than “yes.” Strive for it. Reaching “that’s right” in a negotiation creates breakthroughs.

Use a summary to trigger a “that’s right.” The building blocks of a good summary are a label combined with paraphrasing.

Bend Their Reality

How to Shape What Is Fair

“Fair”—the most powerful word in any negotiation scenario. To become a great negotiator, you must earn the reputation of being a fair one.

To get real leverage in a tough negotiation, you have to persuade the other party that they have something to lose if the deal falls through.

Here’s how you can do that:

Anchor their emotions: To bend the other party’s sense of reality, you need to start with the basics of empathy. You need to be able to audit and acknowledge their fears. By anchoring their emotions in preparation for a loss, you inflame the other party’s loss aversion so that they’ll jump at the chance to avoid it.
Let the other guy go first: Going first is not necessarily the best thing when it comes to negotiating price. Let the other side anchor monetary negotiations. By letting them anchor you also might get lucky: for instance, Chris has had many negotiation experiences when the other party’s first offer was higher than the closing figure he had in mind. If he’d gone first they would have agreed and he would have left with either the winner’s curse or buyer’s remorse. However, this could have a counter-effect. You need to be prepared to physically withstand the first offer. If the other party is a tough one, they may just end up bending your perception of reality.
Establish a range: Establish a ballpark figure with credible references to support your statement. For instance, instead of saying, “I’m worth $110,000,” say, “At top places like Acme Corp., people in this job get between $130,000 and $170,000.” That gets your point across without making the other party defensive.
Pivot to non-monetary terms: Make your offer seem reasonable by offering things that aren’t important to you but could be important to them. Or, if their offer is low you could ask for things that matter more to you than them.
When you talk numbers, use odd ones: Numbers that end in a ‘0’ tend to feel like placeholders. But any arbitrary number you throw out that sounds less rounded— like say, $78,435—feels like a figure that you came to as a result of a thoughtful calculation.
Surprise them with a gift: Make the other party feel generous by staking an extreme anchor, and then after their obvious rejection, offering them a completely unrelated surprise gift. People will take more risks to avoid a loss than to realize a gain. Make sure the other party sees that there is something to lose by inaction.

Create The Illusion of Control

How to Calibrate Questions to Transform Conflict into Collaboration

Calibrated questions have the power to educate the other party on what the problem is rather than causing conflict by telling them what the problem is.

Here are some calibrated questions that Chris uses in almost every negotiation, depending on the situation:

What about this is important to you?
How can I help make this better for us?
How would you like me to proceed?
What is it that brought us into this situation?
How can we solve this problem?
What are we trying to accomplish here?
How am I supposed to do that? Calibrated questions make the other party feel like they’re in charge, but it’s really you who is driving the conversation.

Guarantee Execution

How to Spot Liars and Ensure Follow-Through from Everyone Else

Negotiators are decision architects. As a negotiator, you have to dynamically and adaptively design every element of the negotiation to get both consent as well as execution.

Here are some tactics, tools, and methods for using subtle verbal and nonverbal forms of communication to understand and modify the mental states of the other party:

The 7-38-55 Percent Rule

The 7-38-55 Percent Rule created by Albert Mehrabian states that only 7 percent of a message is based on the words while 38 percent comes from the tone of voice and 55 percent from the speaker’s body language and face.

Pay close attention to the other party’s tone and body language and identify if it matches with the literal meaning of the words they are trying to convey. If they don’t align, it is quite obvious that they are lying.

The Rule of Three

The Rule of Three is simply getting the other party to agree to the same thing three times in the same conversation.

The first time they agree to something, that’s the first instance. For the second instance, you can label or summarize what they said so they answer, “That’s right.” And the third instance could be a calibrated “How” or “What” question about implementation, something like “What do you see as being the most difficult thing to get around?”

The Pinocchio Effect

A Harvard Business School study by professor Deepak Malhotra and his colleagues found that on an average, liars use more words than those telling the truth. They also tend to use more third-person pronouns.

The Chris Discount

People often get tired of hearing their own name. Switch tracks and use your name instead. This creates a sense of “forced empathy” and makes the other party see you as human.

Bargain Hard

How to Get Your Price

When you feel that you’re being dragged into a hard bargain, you can switch tracks to non-monetary issues that make your final price. For instance, if you’re trying to close a deal, you can choose an encouraging tone of voice, and ask “Let’s put price off to the side for a moment and talk about what would make this a good deal?” Or “What else would you be able to offer to make that a good price for me?”

When the going gets tough, you need to shake things up and get the other party out of their rigid mindset.

If you’re trying to win a deal from your competitors, pitch statements like “Why would you ever do business with me? Your existing service provider seems great!” The “why” can coax the other party into working with you.

Using the word “I” is also great at preventing confrontation. For instance, if you were to say, “I’m sorry that doesn’t work for me,” the word “I” brings the other party’s attention back on to you.

The key is to never be needy. Remember, the person across the table is never the issue, the unsolved deal is.

The Ackerman Model

The Ackerman Model is an offer-counteroffer method. The six-step process is:

Set your target price (your goal).
Set your first offer at 65 percent of your target price.
Calculate three raises of decreasing increments (to 85, 95, and 100 percent).
Use lots of empathy and different ways of saying “No” to get the other side to counter before you increase your offer.
When calculating the final amount, use precise, non-round numbers like, say, $37,893 rather than $38,000. It gives the number credibility and weight.
On your final number, throw in a non-monetary item (that they probably don’t want) to show you’re at your limit. Before you head into a negotiation, carefully prepare your Ackerman plan. This will ideally help you get the bargain and prevent the other party from trying to milk your deal for the maximum value.

Find The Black Swan

Black Swans are hidden elements that can totally change the negotiation if uncovered and used.

“Remember that you are a Black Swan,” says Nassim Nicholas Taleb in the book “The Black Swan: The Impact of the Highly Improbable.” The book focuses on the extreme impact of certain kinds of rare and unpredictable events (outliers) and humans’ tendency to find simplistic explanations for these events retrospectively. This theory has since become known as the Black Swan theory.

As a negotiator, you need to instill that element of fear in the other party which makes them feel like they have everything to lose if the deal falls through. According to Chris, there are three types of leverage: Positive, Negative, and Normative.

Positive leverage: This is when you as a negotiator can withhold or provide what the other party wants.
Negative leverage: This is your ability as a negotiator to make the other party suffer.
Normative leverage: This is when you analyze the other party’s stance and use it to advance your position. Black Swans are leverage multipliers. Discovering Black Swans that give you normative leverage can be as easy as questioning the other party’s beliefs and actively listening. You want to absorb what they speak and mirror it back to them.

Let your known knowns guide you, but don’t let them blind you from what you don’t know. Every case is new, so be open, flexible, and adaptable.

Move the discussion away from the deal, dig into worldviews. Take the discussion away from the negotiation table and into the emotions and life of the other party. That’s where Black Swans live. People find comfort in similarity. They are more likely to concede to someone who they have common beliefs with. You need to try and find that common ground.

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