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Negotiation Handbook
December 6, 2011
Negotiation Handbook
“How to Close the Deal”
Vonzetta May
“How to Close the Deal”
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May, Vonzetta
MGMT 4482
Negotiation Handbook
December 6, 2011
Table of Contents
Introduction
3
Preparation and Planning
3
Define Issues
3
Assembling Issues and Defining the Bargaining Mix
3
Defining your Interests
4
Knowing your Limits
5
Know your Alternative Solutions
5
Setting Target Prices and Asking Prices
5
Assessing Constituents and the Social Context of Negotiations
6
Analyze the Other Party
6
Presenting Issues to the Other Party
7
Deciding Which Protocol Should be Used
7
Relationship Building
7
Information Gathering
8
Information Using
8
Bidding
8
“How to Close the Deal”
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Closing the Deal
8
Provide Alternatives
8
Assume the Close of the Deal
9
Split the Difference
9
Exploding Offers
9
Sweetners
9
Implementing the Agreement
10
Trust
10
Beware of Deception
10
HardBall Tactics
11
How to Deal with a Powerful Negotiator
13
“How to Close the Deal”
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Negotiation Handbook
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This handbook has been developed to help you understand “How to close the
deal”. As Earl Nightingale once stated, “You become what you think about”, so if you
think about and practice these negotiation techniques, you will eventually become a great
negotiator.
Everyone engages in some type of negotiation several times a day. A negotiation occurs
when there is a conflict of needs or desires. Managers negotiate with employees, teachers
negotiate with students, and parents negotiate with their kids, etc. Parties involved search for an
agreement that is agreeable to both parties.
Everyone needs to know the importance of negotiating techniques in order to achieve
their preferred outcomes.
First, it is important to know the various steps of negotiating. They are listed below:
 Preparation/Planning
Before engaging in any form of negotiation, it is very
important to be fully prepared. You need to decide what is
important and what you want to accomplish from the negotiation.
This will help you define your goals and ways you want to work
with the other negotiator.
o Define your Issues: What is being negotiated?
o Assembling Issues and Defining the Bargaining Mix:

Make a list of the issues in order of importance.

Determine if the items on the list are linked together in some way.
o Defining your Interests – Ask yourself, “Why do you want what you are
negotiating for?”
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o Know your limits – This is a very important step in the planning process!!
You will be very upset if this step is skipped because you will most likely
walk away from the negotiating regretting that you’ve settled.

Set a resistance point - the point in which you will walk away from
the deal! WHAT IS THE BOTTOM LINE!
o Know your Alternative Solutions: These are ways your needs can be meet.
You must know your BANTA! (Best alternative to a negotiated agreement).
A negotiator without a strong BANTA may find it difficult to achieve a good
agreement because the other party may try to push them aggressively, and
hence they may be forced to accept a settlement that is later seen as
unsatisfying. (Lewicki) For example, if you were in the market to buy a
particular kind of car, you would research various car lots and compare prices.
If one car lot would not reduce the selling price on that BMW, you already
know what you could go to the other car lot and pay for it. If you did not have
any idea of how much you could get the car for from another lot, you may
discover this information after the purchase and feel deceived by the
dealership.
o Setting Targets and Asking Prices: This step determines what you really
hope to get out of the negotiation and what you expect to get out of the
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negotiation. These targets should be specific and achievable.
o Assessing Constituents and the Social Context of Negotiation: This step in
the planning process basically requires you to ask yourself to think of
everyone the deal will affect.
o Analyze the Other Party – By this step in the planning process, you should
have already identified your interests and needs that you want to gain from the
negotiation. It is equally important to consider what the other party’s interest
and needs are as well. You should ask yourself what their preferences,
priorities, interests, alternatives, and constraints may be. By doing this, you
may be able to enter the negotiation knowing what may be equally important
to the both of you. Try to gather as much information as possible about the
other party. A lot of information can be obtained from the internet or by
talking with other people whom have conducted past negotiations with the
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person. The more information you have, the better position you will be in. As
you conduct your research ask yourself these key questions:

What are the resources, bargaining mix, and/or issues of the
other party?

What may be their interests and needs?

Where do I think their walk away point will be?

What may be their opening bid?

Do they have the authority to make this type of agreement?

Based on their reputation, what strategies will they try to use?
o Presenting Issues to the Other Party – After you have thoroughly conducted
your research of the other party, you should develop a way to present your
information during the negotiation.
o Decide Which Protocol Should be Used – This is who, what, when, and where
the negotiation will take place.
 Relationship building
Go into the negotiation committed to reaching an agreement with the other
person. According to Jeswald Salace, building relationship with the other person can
be used in case the breaks down.
It also provides tools for renegotiating if needed.
Even if an agreement can’t be reached, you should still try to maintain the
relationship with the other party. He suggests that you never leave a negotiation
upset or anger. According to researchers Keith Allred and his colleagues, they found
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that expressing high anger and low compassion led negotiators to have less desire to
work together in the future and to achieve fewer joint gains. (Lewicki)
 Information gathering
You need to ask yourself what is at stake from this negotiation, what the other
person wants from the negotiation and the possible outcomes of negotiations. There
is always the possibility that an agreement may not be reached. What happens then?
These some of the questions that you need to have in mind when preparing to
negotiate.
 Information using
Use the information you’ve gathered to maximize your preferred outcome.
 Bidding
Make an initial offer and counteroffer based on the response from the other
negotiator. The bidding process is similar to a see saw on the playground. You
should always make an offer that appeal to the other party.
 Closing the Deal
Acknowledge that an agreement has been made between both negotiators. You
can close the deal in several ways.
o Provide Alternatives: If there is more than one solution to what’s being
negotiated, then you should offer them. Giving the other party a choice will
strengthen the chances that a deal will be made.
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o Assume the Close of the Deal: Instead of waiting till it is officially stated
that a deal has been made, assume it has and start the process towards the
reward.
o Split the Difference: This is the most widely used tactic in closing the deal.
Give a brief summary of the negotiation and offer splitting the difference with
the other party. This creates a win/win feeling about the negotiation and the
other party will walk away feeling as if the entire negotiation was very fair.
o Exploding Offers: Instead of giving the other party time to think of
alternatives, include a tremendously tight deadline. This tactic will decrease
the time allowed to make reach an alternative decision by the other party.
o Sweeteners – This tactic is like saving the best for last. It makes the other
party feel as if they are getting something extra out of the deal.
 Implementing the agreement
Follow through with the agreed terms and reevaluate if needed. Most business
agreement usually ends in some sort of contract.

Make a contract
a. Provisional Contracts – These contracts allow room for changes. They are
different from the “written in stone” contracts whereas the terms cannot be
changed by either party.
b. Contingent Contracts – These contracts allow you to get past disagreements about
the future and it makes trust a nonissue. These contracts also create risk sharing
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among the negotiators and motivate performance because both negotiators want to
reach an agreement.

Try out the solution
Whatever the agreed terms of the agreement are, try them out to see if they work.
Negotiations may have to start all over if both parties are not satisfied with the current
terms or if situations that the terms or contingent on change.
 Trust
Trust is imperative to any negotiation. You have to trust the person you are
dealing with! There are ways to increase trust between negotiators.
1. Be clear about your intended actions after the negotiation and do it.
2. Stress building trust between the you and the other party
3. Keep promises
4. Develop a good reputation and maintain it!
 Deception
BEWARE OF DECEPTION!

Feather Ruffling

Persuasive Arguments

Promises
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
Threats
There are ways to detect deception on the other party’s behalf.
o Ask Probing Questions: If you continue to ask questions throughout the
negotiation process, you may stumble upon some information that was
purposely left out. Always try to dig deeper until you are satisfied with
the answer.
o Phrase Questions in Different Ways: Rephrasing questions can also
uncover information that has been initially omitted. For example, you can
ask “Has this car incurred any accidents?” If the other party just says fine,
you can ask for a car fax report or the last service date paperwork.
 Hardball Tactics
Hardball Tactics are used by negotiators to pressure the other party to do
something that they normally would not do. You will fall victim to these tactics if you
are not fully prepared for them. People feel differently about using such tactics in
negotiations, especially when the tactics are used against you in negotiations.
These tactics are included in this handbook because it is important to recognize
them when they are being used against you. Once you recognize them, there are several
ways to deal with them.
1. Ignore them by pretending you didn’t hear it, change the subject and get
the other party focused on another subject.
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2. Discuss them with the other party once you recognize they are being used
against you. “Fisher, Ury, and Patton suggests that a good way to deal
with hardball tactics is to discuss them – that is label the tactic and
indicate to the other party that you know what he or she is doing”
(Lewicki)
3. Respond in kind to hardball tactics. Once you realize that the other party
is using a hardball tactic on you, return the action and use on one them.
Once they realize that you are skilled in hardball tactics as they are, they
will less likely try to pull another one on
you.
4. Co-Opt the other person when you
recognize these tactics. This falls back
to the point of relationship building.
Try to befriend the other party before
they have a chance to use a hardball
tactic on you. “It is much more difficult to attack a friend than it is an
enemy” (Lewicki)
Listed below is a list of typical hardball tactics used in negotiations.

Good Cop/ Bad Cop –often when you deal with two
negotiators, you have one that acts like they are on your side
and the other person tries to act like they are the bad guy.
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
Low ball / High Ball – Negotiator makes an extreme offer and
increases the chance that you will reevaluate you opening offer
and move closer to or beyond your resistance point.

Bogey – This is when negotiators pretend that an issue at hand
is not that important to them, but in reality, it is extremely
important to them.

The Nibble – When an agreement is close to being reached, the
negotiator asks to include some clause that had not been
previously discussed during the negotiation.

Chicken – Negotiators use this tactic with force to cause the
other party to ‘chicken out’

Intimidation – This tactic usually involves using anger to force
the other party to do as they want.

Aggressive Behavior – The other party pushes their position or
attacks the other person’s position.

Snow Job – This tactic is often used by overwhelming the other
party with too much irrelevant information.
Some negotiations are just too important to be unprepared. You may ask yourself how do
an amateur negotiator deal with such a powerful person and conduct a successful negotiation. I
have placed a section in this handbook that gives clues of how to deal with a powerful negotiator.
 How to deal with a Powerful Negotiator
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1. Never do an All-or-Nothing deal because this makes you, the amateur
negotiator very vulnerable.
2.
Make yourself bigger by building coalitions with other low power players to
increase your bargaining power.
3. Acquire good information because this strengthens your negotiating position.
4. Ask a lot of questions to increase your knowledge and showcase your
willingness to cooperate.
5. Try to control the negotiation and take some of the power away from the
powerful party.
This handbook only serves as a guide to “How to close the deal.” In order to become
successful negotiators, you will have to endure a lot of practice. Thanks for reading handbook
and may it serve as your first step to becoming a superior negotiator!
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Works Cited
Lewicki, Barry, and Saunders. Negotiation. McGraw-Hill Irwin, 2010.
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