Alright, so in reality, I shouldn't even be teaching a chapter on bargaining,

because if you listen to everything else you've negotiated great and you're not
going to need to bargain, the deal will have made itself.

In those instances, we do need to get down to brass tax bargaining.

Here's some techniques.

The Ackerman system is a bargaining model attributed to a gentleman named Mike

Ackerman.

I was taught this bargaining model.

When I was doing kidnapping negotiations with the FBI and they laid out basically
you have a target price that you want to come to.

Once you've picked out your target price, you're going to come in at 65% of that
price.

You're going to plan on making three races to get to the price that you wanted?And
then the first race is going to be 20% race, the next race is going to be 10, the
last race is going to be 5.

Each one of your raises are decreasing increments by half.

And then when you get to the very last number, you make sure you throw out an odd
number and you also throw in some non monetary object that you know the other side
doesn't want.

But it makes them feel like they've really tapped you out.

They've taken every last time, you know they've fought you tooth and nail.

They felt the decreases in increments.

They still feel like they're winning.

You come in with the last number, it's an odd number.

It seems like that you scratched for every penny.

Consequently, they work so hard to get there that they want to cut the deal.

They're not going to renege.

All right, so I'm.

I'm trying to buy.

A coffee table for $100.

And that's what I want to pay.

They're asking 150, they'reasking 200, they might be asking 250.

It doesn't matter.

I'm going to see what their reaction is when I throw out my initial price.
So I'm going to come in at 65% of where I want to end up.

So I'm going to say say, look, you know, I got a price.

I'll give you the price, but you're not going to like it.

I mean, it's going to be low.

It's it's really going to be low.

And I get a feeling that when I give you this price you're going to make, it's
going to make you really angry and the last thing I want to do is offend you so.

I'm scared to give you the price.

Well, you're getting their permission.

You know, you're giving them some emotional anchoring, what they're thinking.

Like this guy wants a coffee table for nothing.

What's he going to give me $5 for the coffee table? They're going to imagine
something that's worse than what you would ever throw out.

So you finally give me permission to give you the price.

And I said, no, it's going to make you angry.

You know, I I don't, I'm scared and I'm afraid to give you this number.

And they'll almost beg you to give them the number.

And then, very apologetically, you got to say.

65.

Now, they're not going to be happy with that price, but they asked you for it.

They they they're not going to get angry because you told them they were going to
get angry and that diffused it and you would deferential the whole time.

I mean, they feel powerful, You know, they they feel bad for you.

But after you throw your number, then then your next move has got to be tactical
empathy.

It's got to be the application of empathy.

It's got to be apology.

You know, they're going to say, well, yeah, that's not what I had in mind.

You got to do better than that.

I mean, that's ridiculous.

If there if there's seasoned negotiator, they're going to give you the flinch.
They're going to go, Oh my God, that's.

It's ridiculous.

It's horrible.

And that's where you gotta you gotta lay em and say, oh you know, I'm.

I'm so sorry.

It's.

You know, it's, you know, it's horrible.

I can see that I've offended you and you're asking a reasonable price and I'm being
ridiculous.

And you just got to continue to hit them with versions of empathy and you gauge
their reaction.

You know, you've got to push them every step of the way because when you get to the
number that you settle that.

You need them to execute.

You need them to be happy with that number.

So the next point is you're not budging off your number till they come off their
number.

Whatever amount of money they come off of their number, you then you got to be
grateful.

Oh, that was, you know, thank you that you know, that was generous.

You got to enhance the positive emotions.

You know they feel like they've given them.

You don't want them to regret giving in.

You tell them that you appreciate it, that they were generous and congratulate them
on you.

Now your next number is going to be $85.

They're going to feel like they're that's still not where they want to be, but
they're going to feel a sense of accomplishment that you come from 65 to 85.

And again, you got to apologize.

I'd like to give you another number.

I mean, I've, you know, I've worked really hard at this.

It's been difficult for me to get to this.

You know, as a matter of fact, I got to go back and check my finances before I get
this number.
I got to, I got to check with the people, you know, I'm not sure I can cover this.

So, you know, you've thrown out your $85.

They're still fairly disappointed, but they feel like they've now, they're hungry,
they're making progress, you know, they feel that the process with you is making
progress.

And as long as people are making progress.

It enhances their ability to stay in the deal.

Now your next move is at 95.

Now they're going to feel a sense of accomplishment, but they're going to know that
that last move that you made was smaller than the first one.

Always increase by decreasing increments.

Always you got to manage the raises.

In X-rays at 95, now you go through the whole.

Scenario again.

You know, the whole dramatic scenario.

The application of empathy, the recognition that they were generous, the
recognition that you're probably making them angry.

After 95, your last moves at the number that you're going to give, the numbers got
to be an odd number.

Everybody likes odd numbers.

It's got to come out reluctantly.

If you had planned on spending $100, thenyou really need to come in at $97.43.

If you have the opportunity asking for a piece of paper and a pencil and start
writing numbers down, it doesn't matter what you write down.

Write down your birthday.

Write down today's date.

Write down how much you weigh.

You know, make a show that you're working really hard.

You're tapping the resources, but they're going to feel like they worked really
hard for it.

They're going to feel like they've tapped into your last time.

They're probably gonna.

Try to take one more move at you to get you off of that number and that's when you
go like you know.

You know, I got a really nice jacket.

Would you like my jacket? Would you like the shirt off my back? Effectively, that's
what you're doing, you know, but you're you're playing into the the human nature
aspects here, which is a little bit of a drama play, I realized.

But these are people with emotions on the other side.

Even sociopaths have emotions.

So whoever's on the other side, you need to make them feel a sense of
accomplishment that this was a victory, a hard won victory.

They got you there every step of the way.

They felt the brakes coming on the situation.

When each move was less until finally that odd number came out there and then.

The shirt off your back, whatever it is, an if they're going to make the deal,
they'll make it there because they work so hard for it.

A lot of people are told go 1st and go high.

I think that's a bad idea.

Because it's foregoing the opportunity to gather information. 1st I'm going to want
to know where you're coming from when you throw a price out.

And how you throw it out is going to give me a lot of information about you.

And that's information that I want.

I love information.

Every bit of information I get in a negotiation makes me smarter every every step
of the way.

So if you go first, I got information on you.

You haven't gotten any information on me.

If somebody's really pushing you to go first, it's also an opportunity to pivot the
terms.

You can say, all right.

So all right, I'll be happy to give you a number.

Let's set that aside for a few minutes and let's talk about what it's going to take
to make a great deal.

I mean, what looks like a great deal to you? What else do you have to have in order
to make any price that I give you a good price? It's always good to prepare some
things beforehand so that you're not caught off guard in the moment trying to think
of what those things might be.
And when you start to prepare that list beforehand, realize that it's really a
brainstorming list.

It's to trigger some thoughts.

You really want to engage in brainstorming with the other side because nearly every
circumstance, even in a one off negotiation, there's going to be some stuff that
they could throw in that you might not know that they have.

And if you engaged in a collaborative brainstorming session, you know, between the
two of you, you may come up with some ideas again to make a great deal.

Yeah, you can use this when you're buying a car.

You can set the price off to the side for the moment because there's always going
to be other inducements that they want to add in to get you to make that deal.

You know, what kind of follow up service do you want?What are they willing to throw
in at this point in time to try to get that price? They're probably going to be a
lot more flexible on the other terms on the follow up service free car when you
come in for its routine maintenance, you know, do you get, do you get a rental car
to drive around while while you've got your car in their shop? You know, what are
the other maintenance add-ons that they might be willing to throw in to make the
deal? And that's actually a really good move because people can get so focused on
price that they forget.

That it's going to be the terms that make the deal.

The price will break the deal, but the deal is made on the terms.

Well setting a range is a great way to not exactly name price first also.

You can do a range of what's going on in the market.

You can do a range of what you might be willing to pay.

Understand that whenever you throw out a range, the other side is going to settle
on the end that most favors them.

Then I got to compromise and meet you in the middle of that range.

You threw out a range, hoping they come in and pick the number in the middle
because they're trying to be nice.

That's not going to happen.

They're going to pick the end on that range that favors them.

You better be willing to accept that if you come off of that.

Then they're going to be able to accuse you of bad faith bargaining for good
reason, because you gave the impression and if you threw that number that you'd
take it.

But a range is going to be dictated by two things, what's going on in the market
and what you can pay.

What you can pay may not line up with what's going on in the market.
And there's always a possibility that other terms still might make your number
work.

And that's why the brainstorming with your counterpart is extremely important,
because there may be something really valuable that you could do that's not
reflected in the market, you know, great collaboration to create success for both
sides and the future is always valuable.

So understand what your ranges are, what the market ranges are, and then go out and
try to make a great deal.

An anchor is a price that you throw out that's quite some distance from where you
expect to land.

So if you want to pay $100 forsomething, I may throw out right off the bat that,
you know, I can pay $20, you know, I'm going to throw something out that's quite
some distance, gives me a lot of room to maneuver, makes you feel like you won when
you get me to my actual price, right? So you're going to get a lot of advice.

That you should anchor Extreme.

You should.

You should go high.

You should go low.

And people are going to tell you over and over again.

That's going to give you better deals.

What it's really going to do is make a lot of deals go away.

The terms make the deal, make great deals.

Don't extreme anchor.

And you're going to go a lot farther and have a lot more people doing business with
you.

And you will not drive deals away from the table.

I'm more concerned with the emotional anchor, the emotional reaction to my to my
price.

If I go with a high price with no warning, my the emotional reaction from you is
going to going to be negative.

Negative reactions leave a toxic residue that by and large long term are bad for
relationships.

Now on the other hand, I will characterize my number before I throw it out because
I want you to actually be relieved when I give you my number.

So I'm going to say, look, my number's high.

Don't expect anything other than that to be high.

It's going to be higher than you expect, probably more than you.
Plan to pay maybe more than you have now.

By the time I drop that number, you're not going to overreact to the number you
may.

It may still be more than you plan to pay, but you're not going to be mad about it.