You can't let your ego get in the way. After all, you want to accomplish the goal, that's what matters. Sometimes you have to walk away.
INC.: That would be hard for me. Here I am all psyched up to do it, and you want me to back away. But this is my company, and this is an important negotiation.
WOOLF: As I'm sure I don't have to tell you, he who represents himself has a fool for a client. The trouble is, you care too much. I, as your attorney, don't. Therefore I can be more objective and keep from getting emotional.
INC.: So that means it almost never makes sense for our readers to negotiate for themselves?
WOOLF: Not necessarily. You can do the negotiation if you can keep from getting mad when someone says something you don't like.
INC.: OK, say you're the right person, you've set the right tone, and you're prepared. Where does the negotiation take place? Your office, the other side's, or a neutral place?
WOOLF: My office, if possible. I feel more comfortable there. I can be gracious. And on my own turf I have everything I need: files and whatever else I want to show.
INC.: Who makes the first offer?
WOOLF: Whenever possible, the other side does. After all, he or she may give me something more than I dreamed of. If not, I'll at least find out what their thinking is like. After the pleasantries are over I might say, "Gee, what did you have in mind? What did you think was fair?"
INC.: But of course the other side is going to come back with, "Well, we really don't know, Bob, what would you be happy with?"
WOOLF: Then I'll say, "Well, I don't know what you have in your budget." I always ask that. Has it been a good year for them? I may find out something more than I knew in the beginning, and I still haven't told them a thing.
INC.: How far will you go to keep from putting the first number down?
WOOLF: As far as I can.
INC.: But sometimes you end up having to?
WOOLF: Sometimes I have to. Sometimes they'll say, "Write me a letter and tell me what you want." Remember, I don't always win.
INC.: So what is your first offer?
WOOLF: High, of course. But before I make it, I do one more thing. If I'm representing a basketball player, I'll say to the general manager across the table, "Listen, I really don't want to be off base here, so can I check these figures I have for the other salaries on your team? We based our thinking on them, so I'd like you to correct me if they're wrong. I don't want to be out of line with what I'm asking for." I'm not threatening, but they'll know I'm prepared. If I were a businessman cutting a deal with a vendor, I'd be ready to have him check a list of prices he gives to other customers, plus a list of prices his competitors might offer me.
Anyway, my offer on the basketball contract: if everyone of my client's quality and position were getting $600,000, I might ask for $750,000, expecting I can come down to $600,000. Again, I want the other person to feel as though he's accomplished something. It's crucial to the client/team relationship. The same is true of business relationships.
INC.: OK, but let's follow that logic all the way through. The $750,000 is higher than what you're expecting. Why not let the other side really feel like it's accomplished something by asking for $1 million before coming down?
WOOLF: Well, then it becomes outrageous, and they're not going to believe anything you've said in the first place.
INC.: So you have to establish an upper boundary, beyond which trust is gone?
WOOLF: Yes.
INC.: Is there a rule that says 30% above the norm is OK, but 50% is too much?
WOOLF: I've really never looked at it that way. I just use common sense. And all the time I'm asking questions, though I never give away anything myself. I keep asking, "Can you live with this, can you live with that? Will this be all right?" I always encourage the other party to believe that we are going to make a deal. I don't care how far apart we are, that's my attitude. It shows good faith. And when offers are being discussed and terms considered, I'm always staying with my numbers. Often I never go down.
INC.: How do you deal with things like the split-the-difference gambit? Say you're asking $100,000 for a house and I'm offering $70,000. It looks like we're never going to meet. Finally I get frustrated and say, "We could talk forever. I'm going to be a gentleman and meet you right smack in the middle -- $85,000."
WOOLF: Well, if somebody made you that offer, what would you and 99% of the people do?
INC.: Probably accept it.
WOOLF: Right. But I'd say no. I'd say, "I can't do that, but I will take $90,000."
INC.: And all of a sudden you've bumped up the floor.
WOOLF: Right. Now, you know you can get $85,000, and probably more -- in this situation it will be probably closer to $90,000.
I always come down very slowly if I'm selling, or up very slowly if I'm buying. Let's say that you're asking $100, and I'm offering $40. Just because you come down $10 doesn't mean I have to go up $10. A lot of people think that you have to do what we call tit for tat. That's not so. Maybe I'll go up $5. My theory is to go up slowly or come down slowly and then just continue the negotiation. Keep on talking.
But remember, I don't land every negotiation. You can't win every one. But if you brought it to a head, got an agreement, and you're happy and the other party is happy, then don't second-guess yourself -- it's a successful negotiation. Why is it that everyone thinks that if I win, you have to lose? It's just not true.
