You Can Negotiate Anything

Information, time pressures, and perceived power often spell the difference between satisfaction and frustration for you. Using a hypothetical situation, let me illustrate. You awaken one morning and go to the refrigerator for a glass of milk. You plan to drink most of it straight, then pour the rest into your coffee. As you open the refrigerator door and grasp the container, you’re aware that it’s clammy. Stepping back, you notice a pool of water on the floor. You call your spouse over to diagnose the situation, and your spouse gives you the technical name for the problem: “Broken refrigerator.”

You comment, “I think we need a new one. Let’s buy it at a ‘one-price store,’ where we won’t be hassled.” Because your children are too young to be left alone, you tell them, “Get in the car. We’re going to buy a refrigerator.” En route you discuss your cash-flow problem. Since you’re not very liquid at the moment, you decide to spend no more than $450.00 for the acquisition. In other words, you have a firm objective in mind.

You arrive at the one-price store: Sears, Ward’s, Gimbel’s, Marshall Field’s, Macy’s, Hudson’s, or whatever. For the sake of the narrative we’ll say it’s Sears. You walk briskly to the Large Appliances Department, with your organization trailing behind you. As you run your eye over the refrigerators, you see one that appears to meet your needs and specifications. However, as you approach, you notice that on the top of this model is a sign reading, “Only $489.95”—$39.95 more than your checking account can handle. It’s no ordinary sign scrawled with a Magic Marker. It’s symmetrical and professionally done: block-printed on expensive chipboard. And it appears to have been placed there by the Big Printer in the Sky.

He arches an eyebrow and says, “When you and your wife finish discussing this, you’ll find me in Hardware,” and strolls away.

Now I ask you, will this be an easy or a difficult negotiation? Most people in our culture would say difficult. Why? Because of the great imbalance in information, apparent time pressure, and perceived power.

Information. What do you know about the salesman’s needs or the store’s needs? Is the salesman on salary, commission, or a combination of both? You don’t know. Does he have a budget, a quota, or a deadline? You don’t know. Has he had a great month, or did his boss warn him to sell a refrigerator today “or else”? You don’t know. What’s the inventory situation on this model? Is it the store’s hottest item, currently on backorder, or is it a dog the store manager will dump at any price? You don’t know. What are the itemized costs on this model? You don’t know. Is the store making a profit on this model? If so, how much? You don’t know.

Obviously, you don’t know very much about the salesman or the store. But does the salesman know something about you? Yes. He knows you’re interested in the refrigerator. People may browse in the Sporting Goods, Clothing, or Stereo Departments at Sears, but not in the Large Appliances Department. They examine refrigerators when and because they need them. Over and above this “given fact,” the salesman knows which nearby competitors sell refrigerators, whether they’re featuring special sales at present, and how much they’re charging.

Though he may—for the moment—seem to be ignoring you and your spouse, he’s actually listening to your conversational exchanges with a cocked ear. He hears you discussing your old refrigerator, your cash-flow problem, and your need for a new refrigerator. Almost anything you and your spouse say furthers the informational imbalance and strengthens the salesman’s hand.

Little comments like: “The color really is just right” … “I don’t think we’ll be able to beat this price at Ward’s across the street” … and “The freezer compartment is the roomiest I’ve seen” give the salesman a growing edge.

Note that the salesman never responds directly to any question that might give you information. His response to any question is a counter-question. If you ask, “I’m not saying I’ll buy this refrigerator, but if I do, when do you think you could deliver it?” he’ll say, “When would you like it delivered?” When you reply, “How about early this afternoon?” he’ll say, “Why so soon?” At that point one of you will comment, “Because we have about seventy dollars’ worth of food spoiling rapidly.”

Does the salesman like this information? Yes, because you’ve exposed your deadline to him without knowing his.

Time. Compounding the expanding informational gap is the problem of organizational pressure and time. The salesman you’re dealing with seems relaxed. His organization isn’t visible. How about your organization? It’s very visible, but it’s not united. The wife says, “Let’s go.” The husband says, “Let’s stay,” or vice versa.

What about the two children you brought into the store with you? Where are they? Are they beside the refrigerator, at parade rest, quietly waiting for the sale to be consummated? No. One youngster is playing hide-and-go-seek in the refrigerators.

“I think he’s in the yellow one … the one with the door closed. If we don’t get him out in three minutes, he’ll suffocate!”

Where’s the other kid? At the far end of the store with a hockey stick and a plastic puck, shooting slap shots against washers and dryers. Every few minutes he shouts, “Come on! Hurry up! The game is starting!”

While your organization is putting the screws to you, the appliance salesman wanders around acting as though he is almost totally disinterested in selling that refrigerator. Periodically he carelessly says, “Hi, there. Make up your mind?” as though he were passing on his way to pluck a mango or a papaya.

Power. In addition to all this, there’s the problem of power. Power, in this instance, manifests itself in two forms:

A. The power of precedent. Most people firmly believe that they can’t negotiate with a one-price store. If I ask them why, they’re likely to reply, “Why else would they call it a one-price store? This results in the following chain of cause and effect.

Have you ever observed someone make a half-hearted attempt to bargain with a one-price store? The approach itself contains the seeds of failure.

The customer walks up to the sign indicating the price and points to it timidly. Of course, the salesman knows the customer’s intent, since he’s been through this scenario many times. But he wants the customer to say the words.

The salesman innocently asks, “The what?” and the customer finally blurts, “The price!”

At this point, the salesman adopts his righteous indignation pose and states, “Please, sir, this is Sears!”

If this ever happens to me, I respond apologetically, “Oh … I’m sorry. I didn’t realize where I was!” at which point my wife turns on her heel and starts to walk out of the store, remarking over her shoulder, “I’m never going shopping with you again!”—which, by the way, is not all that bad, because I’ve accomplished a collateral objective in the process.

There’s a way to break out of this bind: Don’t act as though your limited experience represents universal truths. It doesn’t. Force yourself to go outside your own experience by vigorously testing your assumptions. You’ll discover, to your astonishment, that many of them are false. Raise your aspiration level. Avoid the negative attitude portrayed in the following jingle:

They said ’twas a job that couldn’t be done;

He half-heartedly went right to it.

He tackled that job that “couldn’t be done” …

And by George, he couldn’t do it.

As a negotiator, take some risk, break free from the precedent of your past experiences, challenge your assumptions, raise your aspiration level, and increase your expectations.

While you and your spouse are confronting that $489.95 sign in the store, there’s another form in which power is manifesting itself:

B. The power of legitimacy. The power of legitimacy is power derived from perceived or imagined authority—often authority that’s represented by something inanimate, such as a sign, a form, or a printed document—normally, authority that isn’t questioned.

For instance, if I were to suggest that you do something, you would evaluate my request based upon your needs. If my request and your needs matched, you might comply. But if a sign directed you to do something, your chances of complying would be virtually guaranteed. Let me emphasize that point with an example.

If you travel at all, you’re familiar with a little sign behind each Holiday Inn’s registration desk, plus a still smaller sign posted on each room’s door. Both signs read: “Check-out time is 1 P.M.”

What percentage of guests do you think inconvenience themselves by literally checking out by 1 P.M.? Someone once asked me that question. I pondered for a moment and replied, “Forty percent.” I subsequently learned, from Holiday Inn executives, that the figure is roughly between ninety and ninety-five percent, depending on the motel’s location.

Does that figure startle you? It did me. Fifty-five percent of Americans vote in a good year, but ninety-five percent check out by the Holiday Inn check-out time. The question is, what causes this lemming-like migration of ordinarily independent people to the cashier at the appointed hour?

Five years ago, I happened to be at a Holiday Inn. Because I had to catch an early afternoon flight, I walked toward the cashier at 12.30 P.M. in order to pay my bill and leave. The lobby was empty. At that moment I felt a slight hunger pang, so I decided to get the buffet luncheon, put it on my bill, and return. After eating, I glanced at my watch. The hands indicated 1 P.M. Since there’d been no one at the cashier’s cage before, I assumed there’d be no more than three people there now.

When I got to the lobby I noted twenty-eight people lined up before the cage, like prison inmates waiting to be fed. I couldn’t believe it. How was it possible to progress from zero to twenty-eight in a half hour? I mused: “These probably aren’t guests checking out. Chances are, from their appearance, they’re out-of-towners on a guided tour of the area’s facilities. Part of the tour must consist of showing them this Holiday Inn.” That being the case, I wasn’t going to wait in a line that obviously was not mine. I decided to bypass the sightseers, walk up to the cashier’s cage, and form the real check-out line.

As I moved forward, passing these “tourists,” several of them glanced at me—but not with love. Awareness hit me. Slightly embarrassed, I tried to appear nonchalant as I positioned myself at the rear of the line.

Once there, I tapped the shoulder of the person in front of me and asked, “What’s the line for?”

That was a very significant comment. He saw it emblazoned on a door, and that’s why he was there.

A second example of the power of legitimacy: A subordinate in a business organization whips up the nerve to walk into the boss’s office and says, “Excuse me, but I’d like a raise. I really feel I deserve a raise.”

Does the boss reply, “No, you can’t have a raise”? Never. Instead he says, “You certainly deserve a raise. However …” (“However” is synonymous with “Strike that!”) He shuffles papers aside, points to a printed card positioned under glass on the desk, and quietly states, “It’s unfortunate that you’re at the top of your pay grade.”

The subordinate mutters, “Oh … I forgot about my pay grade!” and backs off, aced out of what might rightfully be his by printed words. In effect, the subordinate says to himself, “How can I possibly argue with a printed sheet positioned under glass?”—which may be precisely what the boss wants him to say.

A third example of the power of legitimacy: Twenty years ago I was involved in the legal end of real estate. People came to me to sign their leases and have them countersigned. Most paid their security deposits and moved along without reading the forms. On rare occasions someone would say, “I’d like to read this lease before signing it. I have a constitutional right to do so!”

I’d always reply, “Of course you have a right to do so. Go right ahead and read it!”

Halfway through the form the person would exclaim, “Wait a second! Hold it! This document practically makes me an indentured servant for the duration of the lease!”

I’d reply, “I doubt that. This is a standard form. There’s the form number in the lower left corner.”

The person usually responded, “Oh … a standard form. Well, in that case …” and he or she would sign, bullied into submission by several printed digits that apparently possessed some magical property.

In rare cases where a person still hesitated to sign his or her name, I might add, “The legal people won’t approve of any changes.” Keep in mind that the legal people didn’t even know they wouldn’t approve of any changes. Nevertheless, the phrase worked like a charm, since “legal people” projects, on a wide screen, a powerful image of legitimacy. One theoretically doesn’t fool around with the legal people.

Meanwhile, back at the Sears outlet, you stand staring at that $489.95 sign, overawed by supposedly unchallengeable power, as were the people at the Holiday Inn, the subordinate asking for a raise, and the people signing leases. Yet in none of the situations should you be overawed. Every one of the situations is negotiable.

How can I say that? Because almost anything that’s the product of a negotiation has got to be negotiable, including the price on the sign above the refrigerator.

Think about it for a moment. How did Sears come up with the $489.95 figure? You know as well as I do. The marketing people said, “Let’s make it $450.00. That’ll move a lot of refrigerators.”

The financial people said, “Prudence dictates that when we sell a refrigerator it should be at a profit. Make that $540.00.”

The advertising people interrupted and said, “Psychological studies indicate that the best number is $499.95.”

Someone else impatiently said, “Look, we have a business to run. Can’t we get together on this?”

They did. They compromised. They got together and came up with the $489.95. There was no Big Printer in the Sky.

Some things are not the product of a negotiation. The Ten Commandments was not a negotiated document. It’s certainly difficult to negotiate with the Lord when he presents you with a fait accompli etched in stone. The Sermon on the Mount was not a negotiated document. Christ didn’t get together with his followers and say, “Give me your input. We’ll form a task force. Break up into subcommittees and work something out.” Since these items are “sacred givens,” they’re in a different category from the Sears price, Holiday Inn’s check-out time, the pay grade, and even the standard lease.

Because so many things are negotiable doesn’t mean that you or I should negotiate all the time. If you were to ask me, “Do you negotiate with one-price stores? Do you negotiate with Sears? ” I’d be perfectly frank with you and reply, “One of my life strategies is never to go into Sears.”

My point is, whether you do or don’t negotiate anything should be strictly up to you, based on your answers to the following questions:

Only if you, as a unique individual, can answer yes to all three of these questions should you proceed to negotiate. You should always have a sense of mastery over your situation. Pick and choose your opportunities based upon your needs. Don’t allow yourself to be manipulated or intimidated by those who aren’t concerned with your best interests.

You have the freedom to choose your attitude toward any given set of circumstances and the ability to affect the outcome. In other words, you can play a much greater role than you thought in shaping your life and improving your lifestyle.