Improve Your Negotiations With The 5 Golden Rules.   LEARN THEM

In “The Negotiator,” actor Samuel Jackson plays a police hostage negotiator who takes his own hostages to prove his fellow officers framed him for murder.

During an incredibly tense scene, Jackson drags one of his hostages from view while screaming into the phone. We then hear a gunshot followed by dead silence.

Everyone, especially the police barricaded outside, believes Jackson has murdered the hostage. This is critical.


Because Jackson – in what we later found out was a bluff – just established his credibility. If the police didn’t believe Jackson would harm a hostage, then little would prevent them from storming the place.

Without credibility, your negotiations will be exponentially more difficult, protracted and less effective. Yet many consider bluffing a staple of effective negotiating.

How can you establish and maintain your credibility and effectively bluff? Should you?

Here are some tips to help you navigate the credibility shoals.

1. Negotiation credibility must be earned.

Many approach negotiations with some skepticism about their counter-parties’ credibility. You should. At least until your counterpart has provided – in some way – evidence of credibility.

Credibility can be earned by making consistent, specific statements throughout the negotiation, especially concerning issues you consider “blue chip” versus “negotiable;” restricting the number of “blue chip” issues to a relative few; and ensuring your actions support your statements by following through on commitments.

Such actions collectively determine your reputation – which hopefully will give future counterparts a reason to trust you.

Let’s say I want to hire a computer consultant, and he justifies his “standard rate” by telling me he has “clients nationwide who pay it.” But when I ask for references, he provides me – a week late – with the names of three local businesses. He tells me his rates for them are confidential.

Credibility lost.

2. The more likely a statement provides its speaker with a strategic advantage, the more likely the listener should try to independently confirm its veracity.

Check the truthfulness of your counterparts’ statements if they provide a strategic advantage. Likewise, providing independently verifiable validation of your strategic statements will increase their believability.

I recently negotiated a six-week rate for a lake cabin in Big Bear, Calif. In the process, I told my counterpart the name and rate of another cabin I was considering. Its rate, not coincidentally, was significantly less than he was asking.

By sharing this information, I increased the likelihood he would believe me and lower his rate accordingly. He did.

3. Bluffing carries significant risks.

I’m not a big fan of bluffing on significant issues at the end of negotiations, especially with weak leverage. Why? As James Freund notes in “Smart Negotiating: How to Make Good Deals in the Real World,” the odds are usually stacked against you.

Let’s say I offer John, a Web site designer, $5,500 to revamp our site. I tell him I need it in a month, and he’s the only top designer available at around this rate. After some dickering, I say “$5,500 is it.” But I’m really willing to pay $7,000.

Three things can happen in this classic bluff. Two are adverse to the bluffer. One, John believes me and I save $1,500. Two, John calls my bluff, says he won’t move off $7,000, and I ultimately acquiesce. While I get the deal, I lose credibility.

Or three, John believes my bluff – but doesn’t respond. I then call several days later and find he is now fully booked by another new client – who paid him $7,000 for the same amount of work. I’m now without an affordable redesigned site.

With weak leverage, the risk-reward ratio is usually just not worth it for me. The stronger your leverage, though, the less risky the bluff.

But it’s still risky.

4. Ways to effectively bluff.

Of course, you may have a greater capacity for risk than me. If so, here are some tips on effective bluffing.

• Only bluff on significant issues. Don’t risk your credibility on minor ones.

• Support your bluff with a plausible reason why you won’t move.

• Couple your bluff with flexibility on another issue. The contrast will make it more believable.

• Try to ensure you’ll have an opportunity to back down if your counterpart believes your bluff and starts to abort.

• Have a “circumstances have changed” explanation ready if you’re forced to back down. This will help mitigate the harm to your credibility.

Jackson had to bluff in “The Negotiator.” His alternatives? Kill an innocent man or accept defeat in his effort to prove his innocence. Fortunately, we’re not often faced with such poor choices.

Published August 24, 2001 The Business Journal

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