Top 3 things I learned from Never Split the Difference
- The negotiation process map (6 tactics to outline a negotiation)
- The Ackerman model (6 steps for the offer-counteroffer process)
- How to negotiate salary (a story from the book)
Also: 3 ways to spot when someone is lying
The Negotiation Process Map
I'm just going to dub this as “the negotiation process map”. Basically a quick summation of all of the techniques learned while reading the book. Below explains all of the techniques in a story about buying a used car from someone (a common scene for negotiation).
I’m looking for a used car. I find a car that I really like but the ticket is 7.5Gs. I can only afford 5Gs. I reach out to the owner to set up a meeting.
- Negotiation is basically therapy. Listen to the person across the table.
- At the start of every negotiation ask only about their problems, reasons for negotiating whatever the topic is, and what their motives and struggles are.
- You want to completely understand their ecosystem and why they are there.
I approach the woman selling her car, we talk briefly just friendly “nice to meet you” type of stuff. I ask her “why are you selling your car?”
She goes on and says “I am relocating to the west coast”
I then can follow up with “ oh really? I’ve moved long distances before and I know how challenging that can be.”
That’s tactical empathy - show them you understand them and can put yourself in their shoes.
- An open-ended question. Do not ask yes or no questions.
- Use questions that start with “how”, “what” and “why” to get them talking.
- The beginning is all about gathering as much information as possible.
“Why are you moving to the west coast?”
She then responds “I am moving for a job in sacramento”
- After they start to talk you are going to want to identify their motives and struggles and mirror them while still using calibrated questions.
After she said “I am moving for a job in sacramento”
I mirror her with “A job in sacramento? what kind of job?”
She responds, “well, I don't really have a job secured yet, I have a few interviews lined up though. I leave in a week and I’m just looking to get enough money to pay for my first few months of rent until I get on my feet with the new job.”
BOOM. you now have a deadline, a motive, and a range to anchor your offer (3 months rent).
Then even another mirror “oh so you are looking to cover your first 3 months rent until you find a job?”
She might then even give you an exact cost of her rent (even if she doesn’t it’s figureoutable). Say it’s 1500 a month, the original asking price she wanted was 7Gs, and you offer her 4800 to cover her first 3 months and even a little cherry on top for the plane ticket.
- You label your counterpart's emotions after hearing their side or their stance or their pitch for your money, your product, your time, whatever the case may be.
- Tell the counterpart “you are validated in feeling that way”, “I understand how you feel”.
- Start the labeling with “it seems like...”, “it sounds like…”, “it looks like…”
NEVER USE THE WORD “I” !! This will cause people to get defensive and feel attacked.
- An accusation audit is when you brainstorm all of the negative things your counterpart might have to say about you and you say them yourself in the very beginning and get them out of the way.
Example from the book:
Late night dj voice
- Think Leo Dicaprio when he’s on the phone roping sales deals in Wolf of Wall St.
- Lower the tone of your voice to make it softer and welcoming, almost a whisper but not quite. you never want to be on the offense. This creates a trusting and empathetic mood in the conversation
The Ackerman Model
At some point in a negotiation there’s just gonna be some straight price haggling and back and forth.
As a general rule of thumb you never want to make the first offer, always push your counterpart to make the first offer or give you their initial asking price
The ackerman model gives us steps for preparing for the haggle. They are right below:
- Set your target price (your goal)
- Set your first offer at 65% of your target price.
- Calculate 3 raises of decreasing increments ( 85, 95 and 100%)
- Use a lot of empathy and different ways of saying “no” (without actually saying the word “no”) to get the other side to counter offer before you increase your offer.
- When calculating the final amount, use precise, odd numbers like $17,349 rather than $17,500. This 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.
How to negotiate a better Salary (Example from the book)
3 Ways to spot when someone's lying
- Liars use more words than someone telling the truth, if you are suspicious of someone's story and they use more words than necessary it is likely they are lying.
- Liars use a lot of 3rd person pronouns (him, her, it, they, them, one) rather than I. This creates distance for them from the fault so they feel better.
- Liars speak in more complex sentences, if someone is speaking in short concise statements they likely aren’t lying.