50 Tactics and Counter Tactics used in Contract Negotiations. Presented by: Robert Pimentel

Transcription

1 50 Tactics and Counter Tactics used in Contract Negotiations Presented by: Robert Pimentel

2 The following information was obtained from the text book Contract Negotiations, Skills, Tools, and Best Practices by Gregory A. Garrett. This book is available through the online ARHMM bookstore. jsp#

3 1.The Scape-Goat Explain to the other side you completely agree with their request/demands; however another key person in your organization will not approve Ask to speak to the person in question Who s your boss? Just say No! Not good enough How much do you have to spend? I don t understand

4 2. Just Say No Sometimes the single most effective negotiation tactic is to simple just say no! You can use this at almost any offer or counter offer made by your counterparts. Refuse to accept no Offer a counter-proposal Try yes and. Escalate

5 3. Not Good Enough Whenever the other side makes an offer, you simple reply, not good enough, then pause and allow the other side to make the next response. Reply, So what is good enough? Silence Walk away Replay your previous offer Escalate

6 4. Attack, Attack, Attack Some contract negotiators will use verbal assaults, including profane language, profane gestures, personal insults, organizational insults, and emotional attacks, i.e., getting angry, crying, to get you off topic and not thinking clearly. Know when to walk away Disclose the tactic Strike back Who s your boss? Just say no! Timeout! You can t be serious! Focus on the issue

7 5. Desperate Deals Attempt to get the other side, especially publicly traded companies, to agree to deep discounts in order to report a big deal or recognize revenue before the end of a fiscal quarter or fiscal year. Do not make a desperate deal Do not close the deal until the next quarter/fiscal year Do not give a deep discount Provide a giveaway

8 6. Playing the Ego If you are negotiating with a person who clearly has an inflated sense of self-worth, then play to their ego through flattery, seeking their advice to solve the problem, and asking if they have the authority to make this deal. Disclose the tactic Deflate your own ego State your lack of authority Who s your boss? I don t understand

9 7. Lose the Battle, Win the War One party will decide to intentionally allow the other party to obtain a more favorable outcome in one negotiation in order to obtain a better relationship and follow-on opportunities. : Disclose the tactic Every deal is separate No follow-on commitments Who s your boss? Accept

10 8. I Don t Understand Some contract negotiators will repeatedly use the phrase I don t understand, simply to get the other side to provide more information or to frustrate the other side into making concessions. Re-explain Suggest the other party should bring in another negotiator who is more knowledgeable Who s your boss? You can t be serious! Know when to walk away Timeout/recess Playing the ego

11 9. Timeout/Recess Taking a timely break from a contract negotiation can sometimes be the most effective tactic, especially if your team is losing focus or tensions are rising. We must press on Delay Not right now, just 5 more minutes

12 10. Here today, gone tomorrow One party makes a time-limited offer, which has a very brief period of effectiveness. Request more time to review Need more time for higher approvals Reach an agreement Just say no! Know when to walk away Who s your boss? Timeout/recess

13 11. It s a Competitive World Just the threat of competition can sometimes cause the other party to make concessions. Defend your position Show them your facts Ask who are your competitors & what are they offering- which is better? Who s your boss?

14 12. The Artificial Deadline Many contract negotiators are known to create artificial deadlines in order to create a sense of urgency in order to drive the other party to make rapid concessions and to quickly close the deal. Escalate to verify the deadline Offer to accept, with contingencies Refuse the deadline

15 13. Focus on the Issue During contract negotiations do not allow the other party to throw you off track; stay focused on the issues that are of most importance to your organization. Delay actions Attack, attack, attack Timeout/recess

16 14. Quid Pro Quo During contract negotiation, any time one party asks the other party for a concession, the latter party in turn seeks a comparable concession. Refuse to make concession Stonewall Accept

17 15. BAFO & FARFO The buyer s request for a best and final offer (BAFO). If the buyer considers the final offer not good enough, it then request a best and really final offer (BARFO). Accept the offer Refuse to play

18 16. The Power of Nice Some contract negotiators will display friendliness, goodwill, and positive attitude to gain an advantage with the other party. Disclose the tactic (Be nice too) Attack, attack, attack

19 17. Bring in the Big Dog During the negotiations, one party may decide to influence the other party by bringing in a person of high-level position, great expertise/stature, great wealth, celebrity status, etc. which may influence the other party. Disclose the tactic Bring in your own big dog with a different view point Who s your boss?

20 18. The Follow-on Deal A common contract negotiation tactic in which the buyer offers to tie the results of this deal directly to the seller s chance of obtaining a future deal. Accept the offer, with contingencies Accept the offer Reject the offer Not good enough!

21 19. Bluffing Bluffing is a form of pretense or deception, often used to hide a weakness during contract negotiations. Disclose the tactic Show your facts Who s your boss? You can t be serious!

22 20. Use of False Facts Knowingly provide false information and present it as a proven fact. Disclose the tactic Know the facts Escalate

23 21. Open Questions A common contract negotiation tactic is the use of open questions. Open questions invite long, relatively undirected answers, usually intended to gather as much information as possible. I don t understand Disclose the tactic Refuse to answer Use a loaded question Answer briefly

24 22. Yes or No Questions Experienced contract negotiators will often use yes or no questions to control the discussion. Disclose the tactic Use an open-ended question as a response Refuse to answer Redirect the question

25 23. Role Reversal Changing from bad guy to good guy can make the other side believe you truly understand their side, which will likely create a more collaborative environment. Disclose the tactic Play along

26 24. Divide and Conquer When involved in team-based contract negotiations with the other side, seek to divide their team, then pull aside key team members from the other side to try to win them over one at a time. Do not allow your team to be divided Disclose the tactic Divide and conquer their team

27 25. Stalemate/Deadlock When both parties are frustrated by their inability to make progress, they no longer see any point in talking any further. Offer to make a concession Who s your boss? You can t be serious!

28 26. Stay in the Game During contract negotiations, when dealing with difficult people it is important to find a way to stay in the game. Remember, you cannot win if you re not in the game. Timeouts/recess Show your facts Counteroffer Agree

29 27. Say yes, and A common and highly effective contract negotiation tactic is to agree with the other side on an issue, then say and.. so you can get something you want as well. Refuse the and. Accept the and Counteroffer Who s your boss? Split the difference!

30 28. The Full Monty Ask the other party for everything you want and more! Offer far less than the full monty Offer to provide the full monty, contingent on a multi-year exclusive contract with highly favorable upscope opportunities Walk away Disclose the full monty as unrealistic

31 29. Say Nothing The less you talk, the better: When your counterpart is a talker, let them talk- they will give you valuable information. Often your talkative counterpart will give more and bigger concessions because of your silence. Bring in another negotiator Say nothing- silence is golden Disclose the tactic Break-off negotiations take a break

32 30. Good Guy/Bad Guy One of your team members pretends to be on the side of your counterpart, while another team member favors your side. Play along- have fun Disclose the tactic Use the same tactic on the other side

33 31. Who s your Boss? Some contract negotiators will seek to escalate any issue in which you disagree with their position to your boss. Who s your boss? (To the other side) Here s my boss s name, phone number, and ; my boss will tell you the same thing! We can work this out Make a counteroffer Provide a giveaway

34 32. My Facts Are Better Than Yours Use facts- such as industry benchmarking studies, surveys, standards, or case-studies to lend power to your point! Use your facts and better sources Use expert witnesses Refute their facts Change the game, move away from this point to another

35 33. Stonewall Take a position and do not move! Demonstrate conviction- I shall not move, concede, or alter my position. Be flexible Make a contingent offer to accept the stonewall in return for something additional. Withdraw or silence Take a break Who s your-boss?

36 34. How Much Do You Have to Spend? Many contract negotiators will try to determine the buyer s budget in an attempt to capture all of the available funding. Variable budget Performance-based budget Budget is contingent on value provided by the contracted product or services Refuse to disclose budget Split the difference BAFO and BARFO Lack of authority

37 35. Know When to Walk Away, Know When to Run It is important to know when it is appropriate to walk away. No business is better than bad business! Pursue the other party Offer an easy concession to bring them back Call a break/recess Escalate

38 36. You Can t Be Serious Some contract negotiators will repeatedly use the phrase You can t be serious, in an attempt to persuade you that you are being unfair or unreasonable. Show them the facts They can t be serious Who s your boss? I don t understand!

39 37. The Stealth Offer One party tells the other party that they have another offer from a third party that in fact does not exist. Let s see it Walk away Who s your boss? Know when to walk away

40 38. Low-balling One party makes a ridiculously low offer, which will certainly not be accepted by the other party. High-balling, aka the full monty Disclose the tactic Say nothing Accept Just say no!

41 39. Delay Actions Often experienced negotiators will prey on the impatience of the other party through a variety of delay actions, including: urgent phone call, must attend meeting, big boss needs to talk, family emergency, higher priority deal, etc. They re all designed to make the other party more willing to make compromises. Who s your boss? Your own delay actions Know when to walk away Timeout/recess Press on Just say no!

42 40. See If They Flinch Some contract negotiators skillfully observe the other party s reaction to your tactics to determine what tactics or counter tactics are appropriate. Control your nonverbals Display false verbals Timeout/recess

43 41. Split the Difference A common contract negotiation tactic is to have one party offer to split the difference with the other party. In other words, each party agrees to take a 50% share of the difference between their respective offers. Refuse to split the difference Accept the split, with contingencies Accept the offer Counteroffer

44 42. Nibbling A common contract negotiation maneuver that is a form of escalation typically occurs at the end of the contract negotiation when one party seeks one or more relatively small concessions or additional demands. Disclose the tactic Refuse the nibble Agree with the nibble Quid pro quo

45 43. Red-Herring A common contract negotiation move, providing essentially a false statement to distract attention from other, more important, issues. Disclose the tactic Show your facts Timeout/recess

46 44. Lack of Authority The contract negotiator without authority can use the situation to advantage to explore the other side s positions and even obtain concessions without making any real commitments. Verify the authority upfront Who s your boss? Your can t be serious!

47 45. Principle-Centered A contract negotiation approach that appeals to moral values or principles, which can be highly persuasive to the other party. Disclose the tactic Show your facts Accept Just say no!

48 46. Re-Open Negotiations After the completion of contract negotiatons, one party demands to re-open negotiations to undo one or more issues previously agreed to in order to gain leverage. Refuse to re-open negotiation Quid pro quo Disclose the tactic

49 47. Failure to Fully Disclose Rather than lie or provide false information, some contract negotiators often fail to provide all of the available information. Disclose the tactic Know the facts Know the rules of the game Who s your boss?

50 48. Loaded Questions Some contract negotiators use loaded questions, which are questions that a party usually can t answer and that have a message more important than the information they seek. Disclose the tactic Refuse to answer Use your facts

51 49. Rhetorical Questions Rhetorical questions are questions that expect no answer but also attempt to create a new meaning or persuade one s thinking. Disclose the tactic Return a rhetorical question Use a loaded question Say nothing

52 50. Redirected Questions During contract negotiations, if you choose not to respond to a direct question, you can redirect or transfer the question back to the person who asked the question or to another party involved in the contract negotiation. Refuse to answer Answer the question Redirect the question Disclose the tactic