Negotiating the Best Deal Involves Managing Tension

Negotiation is a social process that arises from conflict. As humans, we negotiate all number of issues — terms of exchange, conditions of interaction, and so on. We do this commercially through companies and collectively as nations. When we can’t sort matters, we litigate. When nations can’t resolve differences through negotiation, wars erupt.

Even in the simplest form of negotiation — say, placing an item of value in front of two people and deciding who gets what — tensions appear. Improving our ability to negotiate successfully with each other necessitates understanding, segmenting, and managing the tensions rather than avoiding them.

From my years of involvement in negotiations both in the corporate world and teaching negotiation in academia, I’ve seen negotiations from every facet you can imagine. Essentially, I’ve now separated negotiation tensions into seven components — relationship tension, outcome tension, process tension, timing tension, leverage tension, agent tension, and team tension. They arise from circumstances such as: who is across from you and what your relationship is with them? What is the desired outcome? What process will you use to come to a resolution? How is time a factor? Does one of you have leverage over the other? Do you have a team or other constituents? Do they? Is this something you will handle yourself, or should you have an agent handle this? What if you are the agent?

To provide an example of how to engage with tension in a negotiation, let’s break down one of the tensions — timing. Here’s an example:

I wanted to buy a car for my wife. She already had a car so there was no rush. I had the luxury of time on my side. I assumed the dealer and salesperson had less time because it was near the end of the month, and I was aware of monthly quotas and sales being a timing factor.

After I surveyed the cars in the Mercedes showroom, I was approached by a salesperson. I knew I wouldn’t find what I was looking for in that room. The showroom is where they put their best vehicles with all the fancy engineering and technology that my wife didn’t want. Still, I stared at the stickers. I asked questions about the latest technologies to get a sense of the salesperson. I learned very quickly who I was negotiating with. They were experienced and knowledgeable.

Then, I said, “While I like all these features, today I’m looking for a simple car for my wife.”

He said, “Okay, let’s go to my office.”

I respected how fast he pivoted. Again, an experienced salesperson. No BS, I thought.

He pulled out several stickers of cars he had on the lot. I looked at one that didn’t even have a back-up camera — really basic. My wife can back up a trailer; she’d already told me that she didn’t need and wouldn’t use one of those “silly” back up cameras. The sticker for that basic Mercedes was around $40,000. I looked it up in front of him on Kelly Blue Book. It said the price was $33,000 and I should be able to get it for $35,000.

I told him that I wouldn’t waste his time and offered him $33,500. I reasoned that the Mercedes market consisting of people who could back up a trailer was really small, and he was going to be stuck with that car for a long time. He never asked me about my timing, which was a major mistake.

The lowest price we got to that day was $37,000. The highest I offered day was $34,500. Once we realized we weren’t going to reach a deal, I wished him well and told him that if he ever wanted to sell that car for $34,500, I would buy it.

He called me every few weeks to tell me about various sales they were having and how I should come in and see what they had in inventory. I would always ask whether he still had the car I’d looked at and he would sigh and say, “Yes.” This went on for more than two months. In December, near the end of the year, he called me and said, “Come and get the car. We will do the deal at $34,500.” So, I did and gave my wife that car for Christmas.

Before you negotiate anything, assess the timing factor. Who does timing favor? Is there any timing tension on either side? You should be able to rate the tension of each side on a scale of 1 to 10. If you need something today, that’s a 10. If you never need it, that’s a 1. If you could take it or leave it, that’s a 5. Failure to assess your advantage or disadvantage with timing is disastrous. If you assess it, you can use it to your advantage.

The salesperson made a critical mistake in not asking me my timing. If he had, I’d have said I was looking for something in the next few months. He thought he had time, but the time he had was affected by the market for that particular car. Nobody else, as near as I could tell, had an interest in it. He should have known that and probably did. Had he known I had months, he’d have been more likely to calculate the cost of just keeping the car on the lot for a few months. He treated me like my timing was a 10.

Learning to address and manage the tensions of negotiation can work to everyone’s advantage and reduce the negative and costly social consequences that stem from failed negotiations.

Written by Cash Nickerson.
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