One of the cardinal rules of power negotiation is that you should ask the other party for more than you expect to get. Henry Kissinger went on to say, “Effectiveness at the conference table depends on exaggerating one’s demands.” He thinks of a few reasons why you should do this:
If you are a seller:
If you thought about this, you probably came up with some good reasons to ask for more than you expect to receive. The obvious answer is that it gives you some leeway. If you are selling, you can always go down, but you can never go up in price. If you are buying, you can always go up, but you can never go down. What you should be asking for is your MPP, your maximum plausible position. This is the most you can ask for and still make the other party see some plausibility in your position.
The less you know about the other side, the higher your starting position should be, for two reasons:
1. You may be wrong in your assumptions. If you don’t know the other person or their needs well, they may be willing to pay more than you think. If you’re selling, you may be willing to accept much less than you think.
2. If it’s a new relationship, you’ll seem much more cooperative if you can make larger concessions. The better you know the other person and their needs, the more you can change your position. Conversely, if the other party doesn’t know you, their initial demands may be more outrageous.
If you’re asking for much more than your maximum plausible position, allow yourself some flexibility. If your initial position seems outrageous to the other person and his attitude is “take it or leave it,” you may not even start negotiations. The other person’s response may simply be, “Then we have nothing to talk about.” You can get away with an outrageous opening position if it involves some flexibility.
If you’re buying real estate directly from the seller, you might say, “I realize you’re asking $200,000 for the property, and based on all you know, that may seem like a fair price to you. So maybe you know something I don’t know, but Based on all the research I’ve done, it seems to me we should be looking at something closer to $160,000.” At that, the seller may be thinking, “That’s ridiculous. I’ll never sell it for that, but he seems sincere, so what do I have to lose if I spend some time negotiating with him, just to see how much he costs?” Can I make it go away?”
If you’re a seller, you might say to the buyer, “We may be able to change this position once we know your needs more precisely, but based on what we know so far about the quantities you would order, the quality of the packaging, and no need for just-in-time inventory, our best price would be around $2.25 per device.” At that, the other person will probably think, “That’s outrageous, but there seems to be some flexibility there, so I think I’ll spend some time negotiating with her and see how low I can take her.”
Unless you’re already an experienced negotiator, this is the problem you’re going to have with this. Your actual MPP is probably much higher than you think. We all fear being ridiculed by the other. Therefore, we are all reluctant to take a position that would make the other person laugh at us or put us down. Because of this intimidation, you will probably want to modify your MPP to the point of asking for less than the maximum amount that the other person would consider plausible.
Another reason to ask for more than you expect will be obvious to you if you’re a positive thinker: you just might get it. You don’t know how the universe is aligned that day. Maybe your patron saint is leaning on a cloud looking at you and thinking, “Wow, look at that good guy. He’s been working so hard for so long, let’s give him a break.” Therefore, he can get what he asks for and the only way to find out is to ask for it.
Also, asking for more than you expect to get increases the perceived value of what you’re offering. If you apply for a job and ask for more money than you expect to get, you are instilling in the hiring manager the idea that you are worth that much. If you are selling a car and you ask for more than you expect to get, you make the buyer believe that the car is worth more.
Another benefit of asking for more than you expect to get is that it prevents the negotiation from bogging down. Take a look at the Persian Gulf War. What were we asking Saddam Hussein to do? (Maybe ask isn’t exactly the right word.) President George Bush, in his State of the Union address, used a beautiful alliteration, probably written by Peggy Noonan, to describe our initial negotiating position. He said: “I’m not bragging, I’m not bragging and I’m not bullying. There are three things this man has to do. He has to get out of Kuwait. He has to restore the legitimate government of Kuwait (don’t do what the Soviets did in Afghanistan and install a puppet government). That was a very clear and precise initial negotiating position. The problem was that this was also our bottom line. It was also the bare minimum we were willing to settle for. No wonder things got worse. It had to come to a standstill because we didn’t give Saddam Hussein room to win.
If we had said, “Okay. We want you and all your cronies exiled. We want a neutral, non-Arab government installed in Baghdad. We want the United Nations to oversee the removal of all military equipment. Plus, we want you out of Kuwait, the rightful government of Kuwait restored and repaired the damage you did.” Then we could have gotten what we wanted and still give Saddam Hussein a victory.
I know what you’re thinking. You’re thinking: “Got it, Saddam Hussein wasn’t on my Christmas card list last year. He’s not the kind of guy I want to give a victory to.” I agree with that. However, it creates a problem in the negotiation. He creates deadlocks.
From the Persian Gulf scenario, you could draw one of two conclusions. The first (and this is what Ross Perot might say) is that our State Department negotiators are complete idiots. What is the second possibility? Right. That this was a situation where we wanted to create a stalemate, because it served our purpose. We had absolutely no intention of settling for the three things George Bush demanded in his State of the Union address. General Schwarzkopf in his biography It Doesn’t Take a Hero said, “By the time we got there, we understood that anything less than a military victory was a defeat for the United States.” We could not allow Saddam Hussein to push 600,000 troops back across the border, leaving us wondering when he would choose to do so again. We had to have a reason to go in and take care of it militarily.
So, that was a situation where it served our purpose to create a stalemate. What worries me is that when you are involved in a negotiation, you are inadvertently creating deadlocks, because you don’t have the courage to ask for more than you expect to get.
A final reason, and it’s the reason powerful negotiators say you should ask for more than you expect to get, is that it’s the only way you can create a climate in which the other person feels like they’ve won. If he walks in with his best offer up front, there’s no way he can negotiate with the other party and leave her feeling like he won.
Powerful negotiators know the value of asking for more than you expect to get. It is the only way to create a climate in which the other party feels that they have won.
Let’s recap the five reasons to ask for more than you expect to receive:
1. You might get it.
2. It gives you a margin of negotiation.
3. Increase the perceived value of what you offer.
4. Prevent negotiations from stagnating.
5. Create a climate in which the other party feels they have won.
In highly publicized negotiations, such as when soccer players or airline pilots go on strike, the initial demands made by both parties are utterly insane. I remember being involved in a union bargain where the initial demands were incredibly outrageous. The union’s demand was to triple the wages of the employees. The opening of the company was to turn it into an open shop, in other words, a voluntary union that would effectively destroy the power of the union in that location. However, power negotiators know that the initial demands in these types of negotiations are always extreme, so they don’t let that bother them.
Powerful negotiators know that as negotiations progress, they will work their way to the middle where they will find a solution that both parties can accept. Then they can both call a press conference and announce that they won the negotiations.
A lawyer friend of mine, John Broadfoot of Amarillo, Texas, tested this theory for me. He was representing a real estate buyer, and even though he had a good deal, he thought, “I’ll see how Roger’s ‘ask for more than you expect to get’ rule works.” So he dreamed up 23 paragraphs of requests to make to the seller. Some of them were absolutely ridiculous. He was sure that at least half of them would be expelled immediately. To his astonishment, he discovered that the seller of the property strongly objected to only one sentence in one of the paragraphs.
Even then John, as he had been taught, didn’t give up right away. He held out for a couple of days before he finally reluctantly gave in. Although he had awarded only one award in 23 paragraphs of requests, the seller still felt that he had won the negotiation. So he always leaves some room for the other person to win. Powerful negotiators always ask for more than they expect to get.