Collaborate, Don't Negotiate: Effective Strategies for Making Win-Win Deals

And just taking care to be sure that everybody in the deal feels good about the deal is worth the extra effort that it takes. I really can't tell you that enough. Okay.

How much more successful would you be if you had lunch once a week with insanely successful entrepreneurs who share their biggest secrets on how they think and achieve success? Grab your seat at the table because this is Business Lunch with Roland Fraser and Ryan Deiss. Welcome to another episode of Business Lunch and today's a Snackable episode with Roland where he's going to get into some more tactical strategies that you can start using to live a rich and happy life. If this is the first snackable episode you're hearing, I'd encourage you to go back and listen to some of the other episodes that Roland has put out. And if you want to get notified every time we release a new episode, go to the new businesslunchpodcast.com website and we'll send you detailed notes along with every episode. That's businesslunchpodcast.com www.businesslunchpodcast.com and you can sign up for the free email newsletter where you'll be able to get all the highlights and resources from the episodes.

Hey, Roland Frazier here and I am going to share with you today some of what I have learned over the last few decades in negotiating thousands and thousands of deals. I started out as a real estate agent, became an accountant. I never could decide what I want to be when I grow up. I still haven't decided, but throughout and then went into security stuff, went into practicing law, did thousands and thousands of deals with clients and also my own deals along the way and have been kind of living outside of having practiced law now for about 20 years. So I've got a lot and lot of transactions under my belt where I've negotiated with people and so I'm gonna share with you today the things that I have found to be the most effective that you can apply to. And before I go into that, I would love it if you would. If you're enjoying these kinds of videos, if you would subscribe, click the little bell so that you get notified whenever we release a new video so you don't miss out on anything and like the video. To let us know that you like what we're producing here as well as if you comment and share. That is always appreciated too. Love to hear your perspective, especially on something like this, because there's so many opportunities and so many different philosophies and ways of thinking about how you might go about negotiating and so I have been a student of negotiation all my life, back from the Alex Karas days all the way up to my friend Chris Voss, who has a great book on negotiating called Never Split the Difference. And, uh, I, I've learned a lot in working with and talking with and consuming all of that, but there is nothing like being in the trenches. And so I'm going to give you a couple of things that might be a little different than what you've heard before that I think can be very, very helpful to you. The very first one is, how do you, how do you look at this negotiation? Because there's. Negotiation to me implies that there is a contest between two people and they are kind of moving against each other, pushing and pulling to try to get what they want out of something at, At. At a cost to the other person. And so I want to reframe that and tell you that instead of negotiate, collaborate. Instead of negotiating, think of collaboration. So, right, it's collaborate, don't negotiate. And what is collaboration? Collaboration is not we're working against each other. It's that we're working with each other with a common goal in mind of achieving something. And so I'll give you a good example of, like, how to think about this. Let's say that you're negotiating to acquire a piece of real estate or a car or a piece of, excuse me, or of a business, right? Any of those situations, you can be buyer and seller advocating for your position, or you can be advocating for a transaction that makes sense for everybody and that's fair to everybody. So I like to think about how can I frame my interaction with the person that I am working with in a way that puts us on common ground trying to achieve a common thing. So instead of me trying to buy the car for the cheapest price, which actually might not be fair, right? And instead of the seller trying to sell me the car for the maximum price, which also might not be fair, I like to think that, hey, we're going to basically move together towards the idea of the car being sold. That's a little bit different frame. So when I'm going in to buy a business, I'm thinking, how do I help the seller if. If I'm the buyer, how do I help the seller get what the seller wants? What could I do that would help the seller get what the seller wants? That doesn't have to be against my interest, right? My interest is in acquiring the business. The seller's interest is in selling the business. The seller may or may not have an idea what they want for it. If they have an idea what they want for it, then I'm going to do my best to get them what they want for it, as opposed to thinking that I'm going to go in and try to beat them down on the price. Now, that doesn't mean that I'm going to overpay for the business, and it doesn't mean that you should overpay for anything you're negotiating with. It means that we need to have some idea of what is the. What is the fair price for this thing that we're going into. And I'll talk about that in a minute. But really what we're trying to do is there are lots of things that we can do in a negotiation that aren't price. It might be terms. So we can talk about the law of price and terms, which I'll talk about in a minute, too. But this just initial thought of, let's. Let's go into this negotiation with the idea that we have a common goal, not that we have divergent goals that are competing with each other. Let's focus on the common goal. If you do, you will close more deals. Okay, so that's the first thing. And you'll also be in the spirit of working towards something instead of like, how can I pull every trick in the book that I can get the best deal? And I can tell you, when I started, when I started negotiating, I was all about how do I get the lowest price? How do I win, Win, win, win. And over the years, I found that that's generally one of the worst things you can do. And I'll talk about that as well. But before I do, I just want you to understand, collaborate, don't negotiate. Okay, we're on the same page there. The second thing I want to talk about is how do you position yourself? So positioning yourself in. In terms of the psychological side of things is really the collaborate versus negotiate. But there's also physical positioning. So how when I go into a room and I'm going to negotiate with somebody and it's set up with two chairs on either side of the table. Even in a restaurant where there's maybe I'm at a table for four people and the person, it's just two of us, and one person sits down directly across from me, you really want to physically be on the same side of the table too. So I will move to the side of the table that the seller is on so that we can negotiate or collaborate. We're collaborating now so that we can Talk like this with nothing in between us, as opposed to being directly across the table from me, that I'll do every single time. And it actually makes a difference. You'll watch people's body language. They're kind of stiff. And if they're at the table on the other side and you're staring them down like that, but you're kind of lean back and you don't have defenses and you don't have a barrier, literally a physical barrier between you when you're talking to the person who's sitting right next to you. So that physical positioning, in addition to the psychological positioning of collaborate, don't negotiate is really important. The other thing, that kind of an overarching thing to think about, is that it is very possible to lose by winning. And what do I mean by that? Well, when I was younger, I went aggressively, as I said a minute ago, I would always go aggressively for the best deal, and I would beat people down and they would agree to things that they should not agree to. So you can go out there and you can get people to agree to deals that are not fair to them. You can get people to agree to do things that they absolutely cannot do. And very often that they know they cannot do. But for whatever reason, the human psyche, they will agree to this. And it might be because you bullied them into it. It might because they feel that they're in an inferior negotiating position. It might simply be because they don't want to be rude, or it might be that they're so scared of the situation or so desperate to make any deal, to escape some other pain that they are suffering from that they will make a deal that they absolutely should not do and. And possibly cannot do. You never want that. So what I would find is I'd get people to do that. And I was pounding my chest, you know, arrogant young kids saying, you know, I was a great negotiator. But then the deals would fall apart. They'd blow up, right? Not all of them, but, you know, a decent number of them. And I realized that it was because I wasn't doing a deal that was in something I like to call the zone of fairness. So to me, within every single deal that you go into, every single negotiation, there is a zone of fairness. And anywhere within that zone of fairness, it's okay to make a deal, and it's a deal that will be good for both of you, right? Both of you are going to get what you want out of it. But there is past the zone of fairness on one side A deal that will be way too good for the person you're dealing with, and it'll be unfair to you. And you want to never make a deal that is outside the barrier of the zone of fairness to where you are not making a deal that you, A, feel is good, B, feel is fair to you, and C, that you can actually perform on. And then on the other side, there is a point at which the deal becomes unfair to the person you're negotiating with. And this might be really, really hard, but I will tell you, it's going to save you so much pain, so many deals that don't happen. And also it's going to help your reputation out in the world a lot too. Okay, so that side is the side that you find more often. I find more often because I. I guess because I've negotiated a lot. Right. That people are agreeing to things that they're not happy with that's not fair to them, that. That they can't perform on or that they probably shouldn't agree to. So you want to get an idea of what are the boundaries of the zone of fairness on either side. And then I want you to aggressively collaborate to get the other party to agree on the part of. The. Part of the fairness zone that is best for you. Right, That's. That's fine. Just don't beat them into agreeing to something that is not fair to them. And it's very important to. I believe that they're happy with the deal too. They can. They can wish they could have gotten more, but I want them to be happy with it. And so I'll give you an example that is. I think it's really good because it's in an everyday situation and it's something that I'll always remember. And it was the zone of fairness idea as something that is. I didn't really discover until a little more than halfway through my negotiating career to. To be like, really something to have as a guideline and to actually think about what are the boundaries on either side. So not long. A few years after I had that concept, I was working on acquiring a camera lens for my son, who I wanted to get him a camera lens. And he had told me what he wanted. I think it was for one of the holidays or something like that. And I went on ebay and. And I found one of them, and I made the guy an offer, and the guy said, and I made an offer that. That was within the fairness zone. Okay. It was not what he was asking for. It was on the aggressive side of A good deal, but it was still within the range of what these things were selling for. So I felt comfortable doing it. And he agreed to it and said, okay, I'll do it, but I'm really unhappy about it. I really wanted to get more. And I messaged him back and said, well, if you're not happy about it, I don't want to do the deal. Which I know he was saying I'm dealing with a crazy person on the other side, but I was like, seriously, I do not want to do deals with people who are unhappy. I just don't feel it's good karma. I don't think it's good to put out in the world. I think that the price was within the zone of fairness. I think I use that term, right, the price was within the zone of fairness. But if you're not happy with it, I don't want to do it. So go ahead, market and try to sell it for the next few days. Let your listing run out its full course. And then if you change your mind and you feel that you could be happy about selling me this lens, then I'll do the deal. Now, that sounds crazy, but to me, for me to save in this case, a few hundred dollars to have some person out there that's feeling bad about the deal that I did, I just won't do it. And I won't do it in business anymore. I won't do it in a car negotiation. It has to be something that not only is within the fairness zone, but also that I can get the person happy about. Now, they might wish that they could get more for it, right? But I want them to feel like, yeah, that was a good deal. Okay, I'm. I'm happy with the outcome of that. That is really important because if you have to have them do anything, including shipping you something, right? They can ship something in a passive aggressive, even if it's subconscious way and not package it right, so that it gets all banged around and then you have to return it, and then things don't work out and you've wasted a whole bunch of time and effort and just taking care to be sure that everybody in the deal feels good about the deal is worth the extra effort that it takes. I really can't tell you that enough. Okay, the next thing that I want to talk about is taking the temperature of the room. So take the temp take. What does that mean? It means that you want to read the room and see, where is everybody? Where do they appear to be emotionally? That's really really important. I was trying to think of an example that I might like to use there, but I'm going to use that example next. So it's kind of a two in one. So I'm going to start with read the room, take the temp. That means that you want to know how desperate, motivated, emotional calm, satisfied, happy, etc. Are all of the people that are involved in the immediate vicinity of the negotiation. And when you do that, you'll know how far you should go in that particular interaction. Because if emotions are high and negative, generally you're going to be better to wait till a different time. You're going to be better off saying, hey, look, I want to get all the information here. I want to understand what's going on. I want to understand what you want. I want to understand what are the challenges that you see with this and have an understanding and you're really just listening and asking questions to read the room and take the temp, because that's going to give you the information that you need to figure out. How do I collaborate with these people in a way that helps me get to a deal that's within the zone of fairness? Okay. How do I get the people in the room to be ideally in the right state of mind, which might mean this is just a conversation and we're going to have another meeting later. You might see that that somebody is, is upset and there's somebody that's not upset. Then I'm going to probably talk, try to talk with a person who's less upset. Uh, and, and not upset at me necessarily, but just upset. Although I've done lots of high pressure, walk into the fire kinds of deals where people were mad at me or mad at the company for whatever reason? You know, that happens too. And how, how do I diffuse that situation? I take the temp, I read the room.

Okay?

That's, that's an important thing that you actually stop. Like, think about that as a step when you walk in, take the temperature, read the room, because that's going to be better than you just come in and you're like, okay, so here's what we're going to do. I got this. This, this, here's my offer. Take it or leave it. Don't ever do that. Okay? Don't do, don't do that. It's not pleasant, it's not a good way to be. And you'll not get. You might like. That's one of those. I feel great. I'm a tough guy, I'm a great negotiator. But it's not going to get you the best deal, and it's probably going to result in some deals that blow up and some reputational damage to you that will hurt you when you negotiate in the future. The next thing I want to talk about is the law of price and terms. So I mentioned it briefly when or earlier in this video, but it's really a fantastic tool that you can use when you're negotiating, if you refer to it specifically, if you refer to it as the law of price and terms. And I can't tell you how many times I've been negotiating a deal where somebody wants a high price and they want all cash right now, today, for whatever it is they're selling. So from the studio that I'm recording this in right now, which I invoked the law of price and terms when I was negotiating for acquiring this property, to acquiring businesses, to acquiring anything that somebody is selling, okay? Any negotiation that you might have. So the. The law of price and terms says that if, if the person who is selling sets the price, then the person who is buying sets the terms. And if the person who is selling wants to set the price, then you as the buyer have the ability to kind of figure out whatever terms would make sense to you. Now if it's expressed to them as well, you know, it's the law of price and terms is your price. I'm not going to beat you up on your price. I just need to get the best terms. Would I pay a million dollars for that? If I could pay a million. Excuse me, if I could pay a dollar a year for a million years, I probably would. Even though it's only worth 100,000, because over that period of time I could do it. And I'm not going to even have to worry about it once I'm gone, right? That's a very exaggerated example. But there probably are terms on which you would agree to pay a price that maybe is higher than market or maybe is higher than you would otherwise pay. And you can just think about it as interest, right? If you want, you can say, I'm getting a really great deal on this and I'm just paying interest on it because I'm getting to pay it off over many, many years, or I'm getting to pay it off because some of it is done as a contingency payment. When only certain things happen, then will I be obligated for the full purchase price. There's a whole lot of flexibility that you'll have. So always think about invoking the law of price and terms to get the. Either the price that you want or to get. Like if you're. Let's. If you're selling something. If you're selling something, how do you get a higher price? Give terms. Give terms. I'll offer. I want to sell this for a million dollars, right? Well, I'd like to give it. I'd like to buy it, but I need terms. Fantastic. I'll do it on terms, but it's gonna be a million, too. It's gonna cost more because I'm having to wait for my money. And there's an opportunity cost to that. So the buyer will understand that. The seller will understand whatever side you're on, you can use that to your favor. If you're the seller, you can get more money by offering terms. If you're the buyer, you can get better terms by not haggling on the price. Okay, so state it's the law of price and terms, because it's a law, right? We all have to abide laws of physics, laws of gravity law, law of price and terms. Okay, the next thing that I want to talk about is play it forward. And this is something that I don't think enough people do. Think of a negotiation or collaboration like you think about chess. Think about it like Wayne Gretzky thinks about hockey, where you skate to where the puck is going. You want to play out the scenarios that are being proposed to you in your mind on all the way before you respond. And I say respond as opposed to react because I find that most people in negotiations are reacting, not responding. A response is measured, thoughtful, and intentional and takes into consideration all of the facts and all of the circumstances that are going on. The reaction is a quick emotional reflex, and that's a big difference. So always be measured. Never get somebody else. Never get caught up in the cadence that's set by somebody else, which we'll talk about next, and be sure that you're playing these out. So let me tell you how this resulted in a $4.2 million win for me in a negotiation. Me and my business partner in a negotiation that we recently had a fact pattern was thrown out. And in the deal that we're doing, and I can't talk about the deal because of confidentiality, but I can kind of give you the high points of it. So the people that we were in the room with, that was a major private equity company fund, and we were negotiating some terms, and they mentioned that. That they were going to do a certain. They were. They're going to take A certain action that would have a negative effect on us. And, but they were thinking maybe they wouldn't take that action, you know, if we were willing to do a couple of things. And, and so I played it out and my initial, my initial reaction, because I am a human, so I do have reactions, but it's internal, not external. Keep your reactions internal and your responses external. That's another good thing to think about. So they said the thing that they said, here's the situation. And my immediate reaction was like, the heck, you know, that's not gonna work, that's not fair. But then I thought about it and I realized that I could get them what they wanted in a different way with some different deal points. Cause I played that all the way out. And then I played out the scenario that I was thinking of and I was like, if I do it this way instead of what they're suggesting, then it's going to have a significant positive impact on us in this deal. And it won't be any different for them. They won't care. And it will cause us to be willing to do the deal and be happy and excited, which these people definitely wanted and will be about $4.2 million better off as a result of it without it costing them anything more. Pretty cool outcome, right? I would not have thought of it if I hadn't followed my play it out rule. Okay, so whenever you're in there, remember, react inside internally. Then play all of the scenarios out that you can think of that might apply in the situation. And how does it, you know, like if I play this thing all the way out, what do I look like at the end of the day? And because there was a, like a multi year projection in this and other stuff that we were looking at. So it's like, play it out. How does it affect, if we do it the way that they're saying, how does that come out and what do the numbers look like? And if I do it this other way that I'm thinking, how does that come out? And this way is quite a bit better than this way. And so I, I basically was able to negotiate that in the way that we wanted. It resulted in a $4.2 million benefit, which is just, it's just crazy what the swings can be in these things. The next thing I want to talk about is how can you empathize with the people that you are having this collaboration with? So rather than thinking I want, I want, I want, I need, my needs are my deal is this, My ideal outcome is that those are all good things for you to understand. But then you need to put all of that aside. And if you want to get the best deal, you want to find the points of empathy that you can have so that you understand exactly what it is that is of concern to the other side. What is it that they want to get out of the transaction? What are the challenges that they're having both financially and emotionally with it? And also what, what will their status look like either to themselves or the people that they're working with when you finish this negotiation and if you can figure out what's important to them and then you can step into their shoes and empathize with them and say, now my collaboration is to get them what they want, which again may not be just price. It very seldom is just price in a deal. There are other things that are driving the deal. So you want to find out those things and, and even those things that are impacting price. Because if you can give them higher status or you can get them something else that they want, then they very often will find that they didn't care about price as much as they thought they did. So it's important to have that conversation. The next thing I'm going to tell you is very, very often people will throw things out and they will horse trade. You'll get into this cadence of horse trading. So don't do that. Don't let the other side set the pace of the collaboration or negotiation. So what I watched time and time again when I was practicing law is that clever litigators, when they're taking a deposition or they're cross examining a witness, or they're in a battle about something with, particularly when it's a professional attorney, a professional questioner like a litigator and an inexperienced person like maybe the business person on the other side of the table or you know, just a normal civilian type person. So what happens is that a good, very, very strategic cross examiner, questioner or negotiator will take set the pace and they'll use a few, they'll use an increasing velocity of question exchanges that will cause the person on the other side to say things that come from their subconscious or to say things that they maybe didn't want or mean to say, or to reveal facts or knowledge or other important information that they probably would not have wanted to reveal had they been thinking about it. So you get into that. So it's like not in a negotiation. It might be, so how much do you want for the thing? And then they say a million dollars. Okay, well, how long has the business been around? Five years. And then. And you're just starting to ask more questions more frequently and the answers are coming more frequently. And what that will do very often is, is it will get them to tell you lots of things that they wouldn't have otherwise told you. So you don't want that to happen to you as a negotiator. There's nothing wrong as long as you are ethically going about this collaboration within the zone of fairness with you Using the velocity of interaction theory here to. It's not a theory. Well, I guess the velocity of interaction tactic to get yourself better deals. But be sure that you do stay within the walls of the zone of fairness as you're doing it. The. And as a person who gets involved in being asked questions, always control the cadence yourself. Do not allow somebody to fire questions at you so rapid fire that you're not actually responding intentionally instead of reacting really quickly. Okay? So that's an important thing to do. And then back in the 80s, when Ronald and Nancy Reagan were the president and first lady of the United States, she had a program called Just say no. And that was a program that was a way to say no to drugs. I have used the just say no philosophy in negotiating and collaborating for years and years ever since. And that is that we get in this tendency to horse trade. It happens a lot when somebody else is controlling the cadence, but it also just happens because you generally have this theory, which Robert Cialdini wrote about in his book Influence called reciprocity. And that is that if I give you something, then you're supposed to give me back something. I feel morally compelled to give something back if you've given me something. So horse trading and negotiating and collaborating happens. When I offer you, let's say you say, I want a million dollars for my business, and I say, okay, how about I give you 600,000? Well, now you've told me what you want, I've come back and I've made a counteroffer. I've said 600. It's not what you want, it's 400,000 away from what you want. But I have given you an offer, and offers are precious. And as a receiver of offers, no matter how lowball or, you know, how unfair they might seem to you to start with, just remember that all offers are precious and all offers should be entertained, they should be appreciated, and they should be responded to. I get a lot of people that say, particularly when I was doing real estate deals, a whole lot that were like, well, I'm no, we're not responding to any offer like that. It's like, well, that's really dumb because I have found so many times that a crazy offer that I would never consider accepting had I responded by saying, that's just crazy. I'm not going to even dignify that with a response, I would never have made the deal. I would never have made the deal. But because I did respond, I was able to engage the other side, help them understand the value that was here, let them understand what I needed, understand what their needs were too, and then work out a deal. Don't ever take offers for granted. They are precious things. So when you receive the offer, you can just say no. So you can Nancy Reagan response an offer, right? You don't have to give something if you don't want to. So if somebody comes in with a low offer, like you say, I want a million for the business, and they say, how about 200? How about 200k instead of a million? Don't say, I'm not going to dignify that with a response. That's silly, right? You're wasting an opportunity. Offers are precious. Now, you don't have to come down. You can say, hey, listen, I totally understand that you'd like to pay 200k for this. The reason that I priced it at a million was. And then, you know, because I've gone through the market analysis and companies like this typically sell for this. As a matter of fact, I found three recent transactions where companies sold for slightly more than that, and I priced it accordingly so that it would be very, very fairly priced. You can see that it has a history. You can go in all the reasons and you can say, also, by the way, in this particular case, we have debt on the property and then we've got a need to get a certain amount of equity out to do the next thing that we want to do. So I'm all open to your offers. Just know that we've really already thought about this. We didn't just randomly pick that number out of the air. And you're giving them reasons that you came up with that. Now some people are just fishing for a steel deal, and those people will probably go away, but you never know what's gonna ultimately happen. So you've gotta entertain the deal. So maybe they come back now and say, well, okay, how about 400? You don't have to come down to 950 or 900. You don't have to give something back. Just say no. Just say no to whatever is Unfair. I did this in a negotiation recently when we were acquiring a service based business. And it was, there was a note that was on, excuse me, this was a manufacturing business. It was a manufacturing business and there was a note that a lender who was related to the seller, they were not family, but they had dealings together, they were close and they wanted as part of the deal for us to pay off a $350,000 note. And I, you know, I said, I understand that you want us to pay that off and I understand why you do. It gives me a little bit of concern that you want that paid off. And right now it hasn't been being serviced. The note will still be there, but we can't pay it off because the company hasn't had the either desire or the choice of allocating its profits and capital in a way to pay it off in the past few years. So it wouldn't really make sense for us to come in and take 350k now that we could put into the company and use that to pay off the note, which would provide no benefit to the company other than reducing the debt. So respectfully, we can't do that in a nice way, saying no. And we were able to get the deal through. And the person that had that note agreed to have it deferred for several years. Right? So that was kind of, kind of a good use of the. Just say no. Remember, you will be tempted because humans have this reciprocity thing going on, right? You'll be tempted anytime somebody gives more for you to also give more. But you do not have to. Okay, it might make sense for you to. I'm just saying you don't have to be intentional and conscious and aware of the psychology of negotiating and collaborating when you're doing this. So that if you choose to have a position that you're going to move to as a fallback and that's going to be some sort of give. If they give on the other side, great. But you do not have to do that. So the other thing that you can use when saying no is the awkward pause. So people find it very, very uncomfortable to have any kind of pause in a conversation. So as a matter of fact, the more that you get out in the world and you're a speaker or you're creating videos like this or whatever, you'll be very conscious of when you say an ah and we make these weird noises just to fill in the gaps because that's how uncomfortable it is to talk. I mean, excuse me, that's how uncomfortable it is. To not talk, to not have some sound going on between two humans is very awkward. But you can use this to your advantage because once you say your number or once somebody else says a number back, that is not what you want. If you just hold quiet for 5, 10, 15 seconds or more and you wait for them to say something else, they will say something else. Usually it will negate the position that they just took. So you might say, hey, for this. What I can do is I can offer you. They're offering. They're asking a million. What I can do is I can offer you 800k for that. And they'll say, wow, man, I really need 900. And you can just sit there and just be like, I. I really can only do 800k. And then just shut up. Just shut up. And they'll be like, well, I really need 950. But maybe. And they'll just come and I. I can't tell you how many times I would say 80% plus of the time, they'll come back and they'll negotiate against themselves to get closer to what you want. It's just so painful for them to be there. Again, use it ethically. Use it within the zone of fairness. Okay? Don't take advantage of people. You can use these tools for evil. Do not do that. Use them for good. But for me, the last time that I did that, which was a month or so ago in a negotiation, it was a $2.5 million swing. I just. Awkward, paused and they waived 2.5 million of purchase price. That can be very valuable to you. And then the last thing that I want to talk about is how do you. When you've, like, done all you can do and you're down to the last bit, and the last bit might be hundreds of thousands of dollars or, or tens of dollars, but you're down to the last bit and kind of. You've moved as far as you can move, and they've moved as far as they can move. And you have the option here of throwing out the age old. I'll split the difference with you. And that can be very effective. Now, Chris Voss will be very upset and turning red and throwing things at the. At the monitor right now if he's watching this, because I will encourage you to use. Let's split the difference when you get down to that last point. But you can't get to the split the difference point before you've gone through all these other things. And keep in mind that Chris. Chris was talking about hostage lives as an FBI negotiator. So he couldn't say just kill half the hostages. Okay, that doesn't make any sense at all. So I think that you just have to look at the context also. But you can split the difference. I don't really like doing that as much. So what I'll do, and I'll give you two examples. We were in a arbitration meeting in Florida and it was over a insurance, the insurance company was there and all the lawyers and it was an insurance based claim. And I was negotiating for our group and we had gotten down and we were 200k apartments, 200k apart. After all day we had a judge that had been a judge forever that was mediating the, or you know, I guess it was mediating the arbitration, mediating the deal. And I just said like when we were down there they, that we had gone back and forth and the other side, you know, they're phoning for approval from their insurance company and all that kind of stuff. And I said, well, it looks like we're 200k away and nobody's budging. And if we don't resolve this today, we both know we'll spend more than 200k in attorney's fees. Not to mention the time that it will take us to do this, not to mention dragging this out for all of this time. So how about I flip you for it now? The judge was like, I've never heard this before. This is, this is crazy. He's like, but I kind of like it. Will you guys do that? And the, and the other side, the decision maker was like, yeah, yeah, I'll do that. And the, the other people there were like, what do you mean? You know, that's crazy is, let's do this. It's like, no, it's, he's right. It's 200k right now. If we have a 50% chance with a coin flip by the judge mediator guy of getting 200k. And I like that better than if we have to spend all this time and money to go after this. So it's $200,000 coin flip, right? So the mediator says, well, who wants to call? And I said, it's totally up to you guys. I don't care if mediators flipping the coin, whatever you like. So as I recall, they called tails, he flipped it and it was heads. So it was 200k in my favor in 30 seconds. But everybody was happy, they were disappointed, obviously that didn't win. But we resolved it and everybody left there happy. And it was a good conclusion. To it. And we didn't split the difference. Right. The other thing that we will frequently do is in my old law firm we actually had a pool table, a billiard table. And we would in negotiating deals very often talk to the other side if they played pool. And we were down to that last little bit was like, how about I play for it? And we would play. And so I remember a friend of mine who is a jeweler who I ended up being business partners with for a little bit. And I were haggling over something and we were fifteen hundred dollars apart. And just one example on, on something that I was buying for my wife and we went back and forth and saying, I can't do this. It was like fifteen hundred dollars. And I said, got a pool table down at the end of the hall, how about I play you for it? He was like, okay. And we played for it. And again I, you know, I won, I got lucky. So. So those are two that I, I'm telling you, I have been on the other side of those as well. And I don't feel bad about the ones I lost. I definitely feel good. Those are the ones that come to mind probably cause I've blocked the others out of my head. But as a way to kind of get that last mile and get the deal done, don't be afraid to think outside the box. Flip a coin, play a game, do something that breaks the monotony of this traditional negotiating pattern and process and do something fun. So just to kind of recap, we talked about a few things. We talked about the idea of collaborate versus negotiate. Collaborate, don't negotiate. Work towards a common goal that you both have in mind. Don't set yourself up as opposition from the start. Position yourself physically next to the person. Do not put barriers, artificial or actual physical, in between you. When you're having an in person conversation with somebody to collaborate on something, think about having the zone of fairness before you go into the negotiation figured out on both sides. What are the walls of the zone of fairness so that you're going to do a deal within that zone. Let your situation dictate the cadence, the rate at which you're negotiating. Don't allow somebody else to set the pace. If you want to as a strategy, set the pace. You can do that, but always find yourself responding intentionally instead of reacting. And if you want to negotiate within the zone of fairness on the other side, you can certainly use this to your advantage. Also. Take the temp. Take the temp and read the room. Figure out where is everybody emotionally who are the people that are the primary people making the decisions? Who are the primary people communicating in the negotiation? This is if you have more than one person. Be sure that you don't allow the negotiation to happen when somebody's agitated because they will not be thinking clearly. They will be reacting, not responding intentionally. And you want to get the best result from them by having an actual thought process going on. Play it forward. Think about all of the angles and all of the outcomes that are going to happen as you go through the negotiation so that you are aware of. What does the end game look like in chess? We have the opening, you know, like this beginning game. You've got the mid game and the end game. Think about all the way through to the end. Because you might find that even though something sounds bad for you on the front, if you process it and you process the consequences and alternatives for it and look at it from all the different angles, that in the end you'll be better off doing something different. Propose that it will be very, very effective for you. The other thing would be to empathize and problem solve. You always want to be thinking about what is driving the other side's desires to have a particular outcome. What is it that is driving the other side's desires to have a particular outcome? Because it might very well be, and very often is not the thing that they're coming to the table with. They're coming to the table with price or they're coming to table with some term that's important. But it might not be actually necessary for you to agree to that price or that term, because what's really underlying that is something else. And I'll give you an example of that. In a negotiation that we had for sale of a company, it was. There was a significant reduction over 15 million, $15 million reduction in the purchase price that they offered post due diligence compared to the price that they said in their indication of interest, their ioi, that where they're saying, this is what we'll pay for the company. So a $15 million difference because of them going through due diligence and realizing that there was some risk that they weren't sure that they wanted to take. So they came back with that price that was 15 million lower. I was able to actually go through all of the reasons that they were offering that price. And we ended up selling the company for actually more than the IOI. So not only did we recover the 15 million, we recovered even more than that. We ended up ahead of that. So that's how much these deals can swing, and I can't tell. I'm just over and over and over this happens. Okay, uh, think about the Nancy Reagan philosophy of just say no. Remember, don't get caught up in the theory of reciprocity where you have to give every time someone else gives. That is horse trading. You do not have to be a horse trader. You can justify your position and hold onto it. And very often people will agree because you're not coming back. And horse trading, you'll save yourself. I mean, just say no. Just say no. You'll save yourself a ton of money. Along that lines, use the benefit of the awkward pause. Don't be afraid to let time be your friend when you're having these collaborations. And then, last but not least, if you can't agree and you're down to the very end of things, try not to just split the difference. Think about something creative. Flip a coin, play a game of pool, do something else. And if all else fails, you can talk about splitting the difference. I hope this has been really helpful to you. It's one of my favorite things to do to negotiate. I've been doing it, like I said, for decades, have a lot of experience with it. I love the ability to achieve favorable outcomes that do create a happy result for both of the parties. And you can do this too. If you found this helpful, please like the video. If you'd like to hear more of this stuff, subscribe, comment, click the little bell so that it will let you know whenever we put a new video up. And then I'd also love to hear your comments. How have you used any of these things in negotiating? What are other strategies or tactics you've found to be effective? If there's something you don't like, let me know what that is also, and then I'd love it if you'd share this. I hope that was helpful for you and we'll see you next time.

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