Tensions inevitably arise in any negotiation. One school of thought is that negotiations should be collaborative, not competitive. But removing competition from negotiations is unrealistic. The better method is to recognize the type of tensions involved, their causes, and how to manage them. Leveraging tension in negotiations is the key to negotiation success.
Let me share an example of how one master negotiator leveraged two types of tensions — relationship tension and outcome tension:
When my wife and I traveled to Turkey, we visited Istanbul’s Grand Bazaar. Upon entering the ancient structure, we were in a labyrinth of endless shops —selling leather goods, rugs, jewelry, scarves, clothing, and more. There was an underlying energy as peddlers peddled, consumers consumed, and hagglers haggled.
As we approached a small scarf shop, the owner, who appeared to be in his 40s, immediately came out to greet us with a huge smile. We shook hands, and the three of us entered the scarf shop.
The shop owner didn’t begin to discuss scarves with us. Instead he said, “Let’s have some tea. I want you happy. That is what is most important.”
Almost all bargaining, especially sales, begins with high relationship tension and low outcome tension in the eyes of the buyer. In this scenario, I didn’t know this person so I had relationship tension. I didn’t have a reason to trust this person, and I didn’t have to buy a scarf (outcome tension). He invited us to sit for tea with him to reduce relationship tension and did nothing to push us to buy a scarf — he didn’t increase our outcome tension.
We sat and chatted. His English was very good. He asked about our kids and grandchildren. He told us about his wife and children. We asked, “What’s it like to live in Turkey and in Istanbul? How is the shop’s business?” We were as sincerely curious about him as he was about us. We laughed, we relaxed, and he established trust as we spent about 10 minutes just visiting. It was a genuine attempt to connect at a basic, universal human level.
He then asked what we were looking for and for whom. He began to pull scarves from the shelf. “This is this type of silk… here is another. Feel it, touch it. Which do you like better? How about colors?” Each time he pulled a scarf from the shelf he watched my wife’s face intently. He watched how she touched the scarf. He asked her questions and listened and adjusted the selections. It was a beautiful exchange to watch as he worked with her feedback.
When we think of positional bargaining, we don’t think of listening attentively and dynamically. We conjure an image of someone who is demanding and recalcitrant and simply wants what they want. But this isn’t like that. At one point, he wanted to show her that this particular fabric she liked can handle water, and he put on an exhibition with her holding one end and me another and him pouring water on the scarf. The water didn’t absorb into the soft silk. We were mesmerized!
We selected two scarves and asked how much they were. Price hadn’t been mentioned up to this point. He works in lira and said he wanted the equivalent of $600 for the two scarves. I’d done some research and knew to counter with half of the asking price, but I didn’t want to pay any more than half so I offered him $100 per scarf. He then offered $400 for both. I countered with the implicit deal (the average of his $400 and my $200, or $300), which he accepted. That was our final deal.
My low counter offers were intentional. In simple terms, you need to make an offer that will lead the other party to split the difference. There’s always an implicit deal halfway between a bid and an ask. Suppose there’s one candy bar. How do we split it? We split it in half. At its core, it’s the “fair share.” This is universally true in all countries and cultures.
After we finished our transaction, our host wanted to know if we were happy and if we wanted more tea. I told him I was a teacher and a student of negotiation and asked him if we could sit and chat about his experiences of negotiating every day. He was delighted to chat. I asked him a simple question: What’s the most and the least you’ve sold a scarf for? His answer was fascinating. The range was between $150 and over $1,000. This was on his most commonly purchased scarf, which he showed me.
I said, “You mean the very same scarf has sold for as little as $150 and as much as $1,000?”
“Even more than $1,000,” he said.
I asked him how he knew where to start to get so much for a scarf. He said he studies the person, especially their clothes and their watch. He said that those wearing a Rolex pay the most. They want to pay more because they think the more they pay, the better the product. He said I was dressed in casual clothes and wore an Apple Watch, and my wife was dressed plainly, too. I had a Washington University shirt on and, while he didn’t know WashU, he decided we were intelligent and practical and that we would buy, but we wouldn’t overpay, so he priced the scarf accordingly.
People who engage in positional bargaining handle outcome tension with subtle and not-so-subtle human techniques. Positional bargainers can win by playing the halfway game better than their counterparty and using the human techniques that are fundamental to all negotiations — like listening and relationship building. The master scarf salesman from Istanbul knew how to build trust and subtly leverage it into an outcome that he’d predetermined based on his ability to read the outcome the buyer wanted. He knew how to make each party happy.
The scarf vendor had designed a process over the years that minimized process tension and seemed natural and happy. He made us feel we could leave at any time, whether we bought a scarf or not, and that we needed to be happy. It was a positional bargain that seemed to celebrate the human element and, indeed, our uniqueness.
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