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When people think about negotiation, bluffing is one of the first techniques that comes to mind. While it is effective, I have to tell you upfront that it’s not a technique I utilize. It is a bit too deceptive for my tastes and, quite frankly, the risks outweigh the rewards. I wouldn’t utilize this technique even if I didn’t have ethical concerns.
However, despite this, it’s important to make sure that you know as many negotiation strategies and tactics as possible, even if you don’t plan on using the strategy yourself. Why? Because other people will use these tactics against you and you need to be prepared.
What is Bluffing?
Bluffing is a threat a person makes to do something that they don’t actually plan on doing. Essentially, it’s one of the many versions of a lie. The reason why bluffing is effective is that it creates pressure on the other side. As a result, the threatened party gives the bluffer something to alleviate the pressure.
There should always be a give and take in negotiation. Think of negotiation like a dance, you go back and forth constantly giving and taking. Bluffing creates an imbalance in the natural negotiation relationship because, since the threat behind the bluff was untrue, there was no give, there was only take.
The Dangers of Bluffing
As you dig deeper you’ll realize that bluffing actually is an incredibly high-risk maneuver. The bluffers seek short-term gain and lose sight of the potential losses. When bluffs fail, they fail epically and can create serious problems for you going forward.
Credibility and Reputation
Credibility is established through consistency and followthrough. If you decide to bluff and the other party calls you on a bluff, you are left exposed and you lose credibility. This loss of credibility results in damage to your reputation. If you behave badly in business, it is unlikely that the other side is going to keep that fact to themself.
Inability Persuade in the Future
When you develop a reputation for lying or bluffing in negotiations. You don’t just lose credibility; your words lose persuasive value.
Here’s an example: Imagine that a Company is in dire need of legal representation but they got so caught up in their business that they lost track of the court deadline. Now they’re in a situation where they need to appear in court in less than two weeks and they still haven’t found an attorney to handle their case. Because of this, and due to the complexity of the case, they need to retain an attorney within the next two days. The CEO has a budget of $4,500 for legal matters and the lawyer would be willing to accept a retainer of $4,100. Given the time constraints, the CEO was only able to get a meeting with one attorney who would be willing to take the case. The conversation below is an example of the CEO bluffing in an attempt to get a lower quote.
Lawyer: “This is a complex case and it will take me many hours to prepare. I will need a $4,800 retainer before I get started.”
CEO: “Ouch! I must say I’m surprised. You’re retainer is significantly higher than we wanted to pay. As I’m sure you’ve assumed, we’ve been in touch with a lot of other attorneys in town. Your quote is the highest quote we’ve gotten by far. Considering our options, we wouldn’t be willing to go any lower than $3,600.”
Lawyer: “Really? That’s surprising considering the complexity of the case. What were the names of the law firms you were considering?”
CEO: “I’m sorry but it’s company policy to keep that information confidential.”
Lawyer: “Okay. Well, that’s much lower than we would ever be willing to go. Congratulations on finding such a good deal! Just make sure you’re not sacrificing quality too much. This is a pivotal case for your Company.”
CEO: “Well, what’s the lowest you’d be willing to go?”
Lawyer: “Like, I said before $3,600 is well below where we’d be willing to go. We’re going to have to hold firm at our original offer. We have another meeting to get to though. If you’d like to chat, give us a call. Best of luck to you!”
After hearing that question “what’s the lowest you’d be willing to go” the lawyer realized that the statement “we wouldn’t be willing to go any lower than $3,600” was a bluff. If that were truly their baseline, why would the CEO ask that question? Now the lawyer has reason not only to be skeptical of the baseline presented by the CEO, the lawyer is also questioning whether there were other offers. Although she came to the negotiation table with flexibility, the lawyer’s strongest move right now is to hold at the original $4,800 offer and wait to see if the CEO comes back. If the CEO comes back, the balance of power has shifted strongly in favor of the attorney. Confident that she is the only attorney in talks with the Company, she can take her time knowing that as time ticks by, their need for an attorney gets greater. Because of this shift in power she is now more likely to get the retainer she wants and deserves.
Alternatives to Bluffing
Although bluffing is a powerful tool, there are other similar tools you could use that have the same level of efficacy with lower risk.
Instead of bluffing I offer warnings. What’s the difference between bluffing and warning? Follow through.
When I warn people I alert them to the specific ramifications of their actions. I do this by using a technique called a warning sandwich.
1. Say something positive/constructive/truthful
2. Say something negative/worrisome /truthful,
3. Close with something positive/constructive/truthful.
4. I then invite them to continue negotiating.
Here’s an example of what a warning would look using the fact pattern above. After the CEO heard the Lawyer’s offer, she could have said the following:
1. “I really appreciate you taking the time to meet with us on such short notice.”
2. “However, we simply are unable to afford a $4,800 retainer right now.”
3. “We recognize your strong reputation in the legal community and know you would be a powerful asset.”
4. “We would still like to find a way to work with you in this matter. Let’s continue this conversation and see if we can work something out.”
This essentially accomplishes the same goal as a bluff; however, it does so without the risks associated with bluffing. If the Lawyer walks away, that’s the end of the negotiation. Considering the budget constraints, $4,800 was simply not a deal that was feasible. If the negotiation continues, the CEO didn’t lose any credibility, persuasive power, or suffer damage to her credibility.
How do you protect yourself against a bluffer?
Information vs. Influence
If this is the first time you’ve heard me say this, it will certainly not be the last. When you listen to people in negotiations always ask yourself if what they are saying is actual information in the form of verifiable facts or if it is simply a collection of words meant to influence you.
Let’s stick with the same fact pattern for an example. And The CEO said the following things:
– “As I’m sure you’ve assumed, we’ve been in touch with a lot of other attorneys in town.”
– “I must say I’m surprised.”
– “Considering our options, we wouldn’t be willing to go any lower than $3,600.”
All of this was said to persuade the lawyer but none of it was bolstered by verifiable, objective fact. These statements are examples of influence, not information. Never allow yourself to change your position based solely on statements made to influence you.
People will legitimize their bluffs with confidence. Never let someone else’s confidence persuade you. A study of jurors revealed that confident witnesses are more likely to be seen as credible but studies have demonstrated that confidence doesn’t lead to higher accuracy. Ask yourself, is confidence information or influence?
Hostility and anger are emotions that people use to intimidate. You should be skeptical if someone demonstrates hostility and aggression that is coupled with a threat. Think about it, if someone is apparently furious with you and threatens to exercise a better offer, why would they still be talking to you? Why would they not simply leave and accept the better offer?
Here’s an example of what you can say if someone uses the classic anger/threat bluffing combination:
You- “I can tell you’re upset. How about we take a break and gather ourselves? I still want to continue talking to you because I want to make a deal. I might be wrong but you’re probably still talking to me because you see the possibility of a deal too.”
What does this do?
1. You’ve put them in time out. It gives them the opportunity to cool off.
2. You’ve given them the opportunity to reevaluate their threat and come back to negotiate in good faith.
How do you protect yourself from a bluff?
When someone is bluffing you have three choices.
1. Know your options- knowing your alternatives gives you confidence and relieves anxiety. If someone is threatening to walk away because a certain price doesn’t work for you it’s okay, because you know what you’re going to do if a deal doesn’t go through. In most scenarios it’s not going to ruin your life or career. When you know this beforehand you’ll feel more confident letting go of a bad deal. So if someone is bluffing and you are willing to let them, you are essentially calling them on their bluff. If they subsequently come back to the negotiating table, you have significantly more leverage because you know they need the deal more than they initially led on.
2. Take your time- Remember that bluffs create pressure. When you’re under pressure you’ll make mistakes. Expose the bluff- ask open-ended questions to show that you know it’s not true.
3. Ignore the bluff (my personal favorite)- do you know why I don’t talk to the ghost in my bedroom? Because there is no ghost in my bedroom! 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 it doesn’t exist and can therefore be ignored. Also, the more you engage with a bluff, the more “real” it becomes. By engaging with the bluff you are inadvertently giving it more credibility and power.
Dealing with bluffs and threats is never easy. When you are in the moment it can be really scary; I get that. Trust me, if you take your time and implement these techniques, I guarantee that you’re going to have better outcomes.
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