The 5 New Rules for Winning Negotiations

Who knew hostage negotiation actually uses the same principles that apply to all negotiations?! Hostage negotiation started in the 1970s, before Daniel Kahneman’s Thinking, Fast and Slow, before neuroscience, and before emotional intelligence. We thought we were dealing with an aspect of human behavior that was the exception to everyday life. What we didn’t know is that we were dealing with the essence of everyday life and had the rules for all negotiations. Here are those five rules for winning negotiations:

Fear of loss is the single biggest driving force in human decision-making.
Emotions are intertwined into every decision people make.
Negotiation does not equal bargaining. If you negotiate well, you don’t have to bargain.
Don’t take yourself hostage.
The Oprah Rule.

Fear of Loss

Fear of loss is the single most driving force in human decision-making.

Daniel Kahneman’s book, Thinking, Fast and Slow, outlines prospect theory, among many other brilliant concepts. Prospect theory, for which Kahneman was awarded the Nobel Memorial Prize in Behavioral Economics in 2002, essentially says two things:

A loss stings twice as much as an equivalent gain, i.e., losing $5 actually feels like losing $10.
People are more likely to take a risk to avoid a loss than to accomplish a gain.

I’ve since heard the statistic in conversations that 70 percent of buy decisions are made to avoid a loss.

As hostage negotiators, we were simply told to listen for the loss, that the hostage taker was most likely driven to their decision to act by a recent loss they had suffered. We built a set of communication tools that were not only designed to quickly unearth the loss, but to defuse the negative emotional impact of it. Who knew that we were actually building business negotiation and sales tools?!

Emotion-Based Decisions

Emotions are intertwined into decision-making.

It’s not a big leap from the above point to recognize that emotions are intertwined into all decisions. The first and biggest of the lot is fear, followed by all of its disguises (concern, unease, stress).

We make decisions based on what we care about. This makes it inevitable that decision-making is an emotional process.

Antonio Damasio’s book, Descartes’ Error, provides some great reading on this topic if you want to take a deep (but heavy) dive into this. Interestingly enough, we can follow directions much better without emotions, but if we have to decide …

Negotiation Is Not Bargaining

Negotiation does not equal bargaining. If you negotiate well, you don’t have to bargain.

Bargaining, a.k.a., haggling, is for losers. Hags haggle. “Never split the difference” is for winners. If you win, that doesn’t mean the other side has to lose. As a matter of fact, if they feel like they lost—or if they actually lost—you're going to lose, as well, in the long term.

When you win, you don’t have to be a jerk about it. Do you think hostage negotiators get everything they want out of a deal (all the hostages out safely while giving nothing of substance in return 93 percent of the time) by being jerks?

If your situation has devolved into haggling (and you’re not at an open-air market of some sort), the issue isn’t the price—it’s what being given for the price, or how it’s being delivered. Pivot to terms.

Try using labels like these:

“It sounds like you’ve got second thoughts.”
“It looks like the value ‘as is’ just isn’t there for you.”
“It seems like you’re not sold.”
“It feels like we need to change things here.”

Don’t Take Yourself Hostage

The issue here is need. If you feel that you need the deal, you’ll be played. Neediness invites exploitation. They can smell it. If you feel you can’t say “no,” you’ve taken yourself hostage.

In Never Split The Difference, we teach three ways to express “no” without actually saying it so we can keep a negotiation going without taking the risk of driving the other side from the table. One of the ways is contained in this article from The Edge, entitled “The Most Important Phrase To Master For Tough Negotiations.”

The Oprah Rule

Human beings don’t remember things the way they happened. We remember the most intense moment and how it ended. The last impression is the lasting impression.

At The Black Swan Group, we call this The Oprah Rule—and we are inspired by Oprah! No matter what, when you deal with Oprah or any of her staff, they want to make sure you feel respected and well treated at all times, but especially at the end.

The last impression is the lasting impression.

Unfortunately, most people save their cheap shots—or their final grab for leverage, or final complaint, which ends up feeling like a cheap shot to the other side—for last.

Say something both indisputably positive and indisputably true at the end:

“I’d love for us to be able to work this out productively so we can have a long and prosperous relationship.”

You’ll be tempted to say this as an opening because you’ve been taught that if you don’t make a great first impression, you may not get a chance to make a second. Here’s a secret: You can get away with a mediocre first impression—you can’t get away with a mediocre last impression.

To sum up:

Fear of loss is the single biggest driving force in human decision-making.
Emotions are intertwined into every decision people make.
Negotiation does not equal bargaining. If you negotiate well, you don’t have to bargain.
Don’t take yourself hostage.
The Oprah Rule.

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