Are They Bluffing? How to Recognize and Defend Against This Tactic

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I'll catch you later. So what is bluffing? Bluffing is a threat to do something that you don't plan on doing. So let me give you a non negotiation example just to make it really clear. If I'm walking down the street and somebody says, hey, I'm going to punch you in the face, and I say, no you're not. And then the person says, yeah, you're right, I'm not going to do that, that would be a bluff. The person told me they were going to do something and they didn't follow through. Now let's say same situation, they say, hey, I'm going to punch you in the face. And I say, no you're not. And then they punch me in the face. Then that wasn't a bluff, that was more like a promise. So essentially a bluff is another version of a lie. So the reason why bluffing is effective is because it creates pressure on the other side. And in an effort to alleviate that pressure, the other side gives the bluffing party what they want. So what are the dangers of bluffing for the bluffer? So credibility is on the line. Credibility is established through consistency and follow through. If someone calls you on your bluff, you lose credibility. And that's bad. In order to be persuasive, you need to be credible, your threats need to be credible, and also your reputation is at stake too. If you get a reputation for lying or bluffing, not only do you lose credibility, but your words also lose persuasive value. Not only will it hurt you in this specific negotiation, but going forward, as the word spreads throughout the community, you're going to find it very difficult to negotiate with other people because you've developed a reputation and people are going to be very skeptical of what it is that you say. Here's what I do. Instead of Bluffing. I can use a technique that gives me the exact same effect of bluffing without any of the consequences. I don't bluff. I offer warnings. And so what is the difference between a bluff and a warning? When I warn people, I alert them of the ramifications of their actions. So let's give an example here. Another non negotiation example. Let's say I'm driving around the Grand Canyon and I am approaching a cliff and I see a sign that says, you are approaching a cliff. You should stop your car. If you don't, you will fall off this cliff. Now, did that sign seem hostile, aggressive or unfriendly? No, actually it was closer to helpful. Now I am aware, oh, let me stop driving forward. Because if I fall off this cliff, I am likely to die. So thank you sign for letting me know for warning me of the consequences of my actions. So how do I deliver this warning in a way that doesn't sound threatening? Because the result of a threat is hostility. When somebody is threatened, they typically respond in a hostile manner. They want to fight you as a result of the threat. So how do I deliver this warning in a way that doesn't cause that fight or flight response in the other party? The technique I use is called the warning sandwich. It starts off with one, saying something positive, constructive and truthful, and then number two, saying something negative, worrisome and truthful. And then number three, saying something positive, constructive and truthful, and then ending with an invitation to continue negotiations. So what would this look like in a real world situation? So I've represented a client one time who wanted to get out of a lease and where the apartment subsequently became uninhabitable. And of course the landlord wanted them to stay in the apartment and not break the lease. And so in my communications with the landlord, what I said to him was, listen, we appreciate your willingness to negotiate and your willingness to try and settle this amicably outside of court. However, if we're not able to make a deal today that's beneficial to all of us and my clients can live with, we're going to have to settle this in court to make sure that we get what we need to go forward. So again, I appreciate your willingness to talk and hopefully we can work together to find a solution that works for both of us. So you see, that wasn't particularly threatening or aggressive. It was truthful. I was offering a warning, letting him know what happens next.

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So let's switch gears for a little bit. Let's talk about how you protect yourself against somebody who's bluffing. Let's start off with a word of caution. People will legitimize their bluff with confidence. Never let somebody else's confidence persuade you. Only allow yourself to be persuaded by substantive arguments or substantive facts. Just simply because somebody is confident about what they said doesn't really add to the veracity of the statement. One example of this comes out of the studies of eyewitnesses in cases in court cases. So jurors found eyewitnesses that were more confident to be more believable. What those studies also found was that eyewitnesses that were more confident in their memory were not significantly more accurate in their recollections. So even if somebody is genuinely trying to tell the truth, confidence really has little bearing on the quality of the statement that is said in confidence. Similarly, people will use emotion to try and intimidate you. So you should be skeptical if someone gets emotional and upset and the emotion is coupled with a threat. Think about it. If somebody really has a better offer and they are threatening to walk away, and now they're getting upset with you while threatening to walk away, why haven't they walked away yet? Why are they still talking to you? In that situation, I would say something like, I can tell you're upset, so how about we do this? Let's take a break and gather ourselves. I still want to continue talking to you because I believe that we can still make a deal. I might be wrong, but I think the reason you're still here is because you see the possibility of making a deal, too. So what does a statement like this do? Two things. I've essentially put them in timeout. I've given them a chance to cool off. The second thing is, I've given them the opportunity to reevaluate their threat and come back to the negotiating table in good faith. I've also communicated that I see their emotion and I'm not intimidated by their emotion, and I'm not willing to give them anything as a result of that emotional or hostile threat. What's interesting is you can actually start protecting yourself from lies, bluffs, and threats before the negotiation even begins. By knowing your options, you need to get a complete understanding of the alternatives that you have to this agreement. And understanding your alternatives gives you confidence and relieves anxiety. So if somebody's threatening to walk away from a deal because a certain price doesn't work for them, it's okay because you know that if you were to give them the deal that they want, you would be hurting yourself because you have another option. In most situations, if somebody threatens you, the result of the threat, even if it is true, isn't going to ruin your career or your life. When you know this beforehand, you'll have a lot more confidence when it comes time to let a bad deal go. Not all deals are going to happen. Not all deals are made to happen. A lot of times we go into negotiations and we put pressure on ourselves because we feel like the only outcome, the only successful outcome we could have is a conversation, a negotiation that culminates in a deal. But that's not true. Negotiation isn't the art of deal making. It's really more the art of deal discovery. We're coming together to try and figure out if there is a deal that exists that that works for both of us. So let's say somebody bluffs, you know your alternatives, and they threaten to walk away. And you let them walk away because you know what they want isn't in line with your needs, and you let them go. Essentially what you're doing is you're calling their bluff, and you're not calling their bluff with bravado. It's almost you're calling their bluff in a matter of fact way. Oh, okay. If that's what you want, then this deal isn't going to work out. Bye. And then they leave, but then they subsequently come back. Then in that case, now you know that they don't have a good alternative and you have more leverage in the negotiation. Another thing you could do when somebody bluffs, and this is something that I think is a rule of thumb, we should do this every time you're taken aback or somebody comes and comes at you in an aggressive way, is take your time, take a break. Remember, bluffs create pressure. And when you're under pressure, you're going to make mistakes. So one thing that I hate about Hollywood and actors is that you see these really high pressure conversations and the protagonist always seems to know exactly what to say. And he or she says it flawlessly. And I just look at them and I'm like, man, I wish I were that cool. The reality is it's fake. Nobody's that cool. I'm not that cool. I need to take some time and prepare. So if somebody hits me with a threat or a bluff that I wasn't anticipating, I'll say, oh, that. That kind of catches me by surprise. How about this? Let's take a little break and let me think this through so I can come back with something that's productive. Another option you have to combat bluffing is to expose the bluff. And you do this by asking open ended questions to show that you know it's not true. So you ask. So let's say you sell office supplies and one of the companies you sell supplies to wants to renegotiate the deal. And you know your numbers, you know what you can and cannot do, and the person is asking for something that you can't do, and then they say that they have other options and they're willing to use those other options. Then you could ask, oh, which other companies are you talking to? What deal were you able to get with them going deeper and deeper and deeper and trying to get more and more specific. And then once you get that information, then you could do your own research and see if that's true. This technique is a little bit more aggressive than what I would suggest doing, but it is an option for you. My personal favorite move is to ignore the bluff. Here's an example. Do you know why I don't talk to the ghost in my bedroom? I don't talk to the ghost in my bedroom because it doesn't exist. Why would I engage with something that isn't real? Similarly, if someone hits me with a bluff, if I've done my research, I should be reasonably certain that the situation they are threatening me with isn't real and therefore can be ignored. Also, the more you engage with a bluff, the more real it becomes. By engaging with the bluff, you're inadvertently giving it more credibility and power. So I just want to end with this. For me, negotiation isn't a game. It's not about sleight of hand or deception. It's really about two things. It's about creating an agreement that works for both parties and strengthening the relationship at the same time. If I'm ever in a situation where I need to be deceptive to make a deal happen, that is just a signal that that deal is meant to happen. Now, let's say I use deception to make a deal happen and somebody subsequently finds out about that deception, not only do I lose credibility, not only is my reputation hurt, but the second part of the overall goal of the negotiation, strengthening and creating relationships, is ruined because I've created a relationship where the foundation is built upon a lie and no relationship can stand if the foundation is in shambles. And as entrepreneurs, it's really important for us to remember that the business relationships that we create are without a doubt our most valuable assets. Wait, wait, wait, wait, wait.

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I'll catch you later.