Hard Bargaining is probably the most recognizable type of negotiation. Buying a house, buying a trinket in a foreign market, selling an asset, buying close out inventory, disposing of equipment, etc. When most people picture Hard Bargaining they think of some over the top personality slamming his fist on the table making ultimatums and demands. Because motives are clear (it’s all about the price) trust is not a factor. A lack of trust combined with high levels of conflict breeds an environment filled with all sorts of negotiating tactics. (Click the link for a list of common negotiating tactics)
Contrary to popular belief I have found that it is the strong silent type that tend to be more effective during these types of negotiation. Antics simply run the risk of antagonizing the other party causing them to make emotional rather than rational decisions (i.e. they won’t do business with you because you have pissed them off).
EXTERNAL CHARACTERISTICS: When there are several alternatives. Deals become more complex, however, price is still the main consideration. This type of transaction is generally a one–off, however, subsequent transactions can be associated with the deal terms. Subsequent deals with the other party will be influenced by the outcomes achieved as precedents start to form. The focus of a hard bargaining negotiation is primarily short-term (one year horizon). Typical negotiations include asset and equipment purchases, leases, acquisitions, divestitures, etc.
BEHAVIORAL ELEMENTS: Hard bargaining requires very little trust, often financial concerns are dominant (“is it doable”). Satisfaction is received through opening positions, subsequent moves, and compromise on minor issues. Again, you can afford to use as much power as possible without causing an emotional response from the other party. You can afford to demonstrate your power through arrogance, intransigence, and obstinance. The primary differences between an Auction and Hard Bargaining are more variables, subsequent transactions, long term precedents, and less extreme divergence of power. Often neither party is entirely dependent and both parties may refuse the deal.
STRATEGY: Maximizing value during Hard Bargaining is primarily TAKE and PROTECT. Power comes from your ability to say “No”. Deadlines and time pressure are often utilized to escalate pressure as an attempt to force the issue. The perception of power can swing either way. The following skills are used as described:
OPENING – Open as extreme as you dare to manage and shift the other party’s expectations. Be careful, to make your opening offer within reason. Too extreme will often illicit an emotional response crossing the other parties “Piss Off” point.
MOVEMENT – Plan a series of moves in ever decreasing sizes. Movement can come from other issues in addtion to price. The number of moves is slightly more limited than an Auction as credibility increases as dependence decreases.
RESPONSES – Your primary response is “No”, rejecting proposals, limited information sharing, visual flinches, etc. Your proposals are stated for consideration by the other party.
POSITIONING – Utilize power statements and assumptions to unsettle the other party and unlock information.
QUESTIONING – Your questions are directed at identifying desperation levels within the other party. Try to determine if there are extenuating circumstances increasing their level of need. Your questions are designed to test their breakpoints. Pay particular attention to the contradiction between what is said and behaviors, as lying is often more prevelant early in the Negotiaion Wheel.
NVC ALIGNMENT – Again, everything is about “No”. Make sure your body language is overt and present. Even when you are about to say yes, say no first especially with your body to build additional satisfaction.
ANCHORING – You will continually anchor the discussions around your price and your issues.
LEVERAGE – You want to utilize any ancillary issues (volume, form of payment, delivery date, credit terms, etc.) to secure the best price possible.
POWER – Use actual and perceived power to TAKE and PROTECT your position.