I'm going to share one of my most powerful negotiating techniques. The funny thing is that up until a year ago, I didn't even realize this was a technique -- I thought everyone did this. But apparently not -- here's the backstory:
A year ago I went mountain biking with some friends up at Northstar in Lake Tahoe. We decided to take lessons and rent gear for the day, and the rental shop didn't honor our reservation due to a scheduling conflict. I ended up getting our group a full day of riding + gear for the cost of a lesson. As we were walking out of the rental shop, one of my friends asked me "how did you just do that?" because they had been in there earlier and the shop had told them we were out of luck. I told them offhandedly "I just created an obligation." My friends asked me to explain what that meant -- which I did briefly-- but I've thought about it often since, realizing that it's a powerful technique I wanted to share in more detail.
But before we get started, remember what Spiderman was told: "With Great Power Comes Great Responsibility." The technique I'm going to share with you can be abused, and when it is, you'll come off as a total jerk. That might be fine if that's what you're going for. But make sure you focus on using it responsibly. More on that at the end.
Why You Want To Create an Obligation When Negotiating:
Negotiation of any type is a process where two or more parties work to find acceptable, common ground while optimizing their outcome. And just like poker, whoever is holding the best cards has the most power and ability to influence the outcome (whether they play their cards well is another matter entirely). So the reason you want to create an obligation is to increase your leverage in the negotiation process. With leverage you have an opportunity to better achieve the outcome you're going for.
How You Create An Obligation:
There are many ways to do this. The best way is for me to give you some examples.
Example #1: Mountain Biking Gear Rental:
The rental shop in my intro above had told us we needed to arrive by 10am in order to get gear and secure an instructor. We were litearlly pulling up at 9:55, so I called the shop and let them know that someone from our group would be coming in, and I dropped my friends off at the front of the lodge at about 9:57am. They arived in the shop right at 10am while I was parking.
When they got there, they were told it was too late -- all the instructors had already headed up the mountain. So by the time I got to the rental office at 10:10, my friends were sitting out front and let me know we were out of luck.
But I knew I had already created an obligation with the rental shop: I had called them and told someone (probably just a front desk person who had no idea the instructors had already left) that we were coming. That was my currency. I walked in, talked to the manager, and explained that a) we were told to be here by 10am and b) we had notified them before 10am that we were coming. Why did I do this? To make our problem the manager's problem. The manager told me the same thing he'd told my friends: That all the instructors had already left. But I pointed out that that wasn't my problem -- it was his problem, because we'd done as instructed and even notified them. A problem he now had to fix.
Now, here's where things can get kind of uncomfortable. And it's also where most people stand down because they don't want to deal with stressful situations. If you're going to employ this technique, you have to be ready to stand your ground. That happens to be something I generally have no problem doing (to the chagrin of my friends who have to observe me enforcing the obligation I've dropped in someone's lap). I tend to find that startup founders are really good at this because they have to be.
The manager tried to tell me again we were out of luck. There were no instructors. That's when I employed my 2nd favorite negotiating tactic: Getting someone to negotiate with themselves. Why is it my job to figure out the solution to this manager's problem? It's not -- at least not yet. So I told him to think up a couple solutions to the problem and I'd pick one.
You'll get varying responses at this point: If the other party genuinely wants to help, they will try to come up with some solutions. This manager mentioned that there was a second class at 1pm in the afternoon, and that he could get us into that one. Very good -- now we were getting somewhere!
I thanked him for his creative problem solving while also pointing out that 1pm was 3 hours away. We couldn't just sit around for three hours waiting. We had come for the 10am slot. Now I added a solution of my own: "Why don't we get the bikes and gear now. We'll ride until 1pm, then meet the instructor." He agreed, and that's how we got a full day of riding in, with gear, for the cost of a lesson.
Example #2: New iPhone 6 Plus Mixup:
Creating an obligation can come in many forms. I purchased an iPhone 6 Plus (which I absolutely love even though -- or maybe because?-- it's massive. But that's fodder for another post) from a to-remain-nameless wireless carrier on October 27th. I was told it would take a month for the phone to arrive since it was on backorder.
But then, on 11/1/14, I got an email from the carrier telling me the phone would ship "on or before 11/6/14" and that I'd get a status update in a week. I don't know who at the carrier sent that erroneous email out, but s/he just created an obligation for them. And when I did not get an update as promised in a week, nor did I receive the phone, I decided to do something about it, because I was going on a trip and didn't want the phone to be sitting on my doorstep.
I used Data.com to find the name and email of a Vice President, Corporate Strategy at the carrier. I emailed her, and I used the BigDripper to make it more likely that she would respond. Here was my email:
And after one BigDripper auto-ping...
... she wrote me back introducing me to a colleague...
...who expediently shipped me a new phone, overnight, to make sure it arrived before I had to leave for my trip:
Normally, I wouldn't have taken the time to make good on this obligation, but I did because I had to travel, and that's kind of the point: There are opportunities all around you to create obligations so you can maximize your situation. Many times, it's not worth the cost to push these obligations, because you'll have to live or work with the people afterwords. The nuance of knowing when to create the obligation, and when to let it slide, is an important one. But what's also important is that you realize that these opportunities exist, even if you choose not to do anything about them, and that you get comfortable pushing them when you need to.
Here's another great negotiating technique I just read bout from Ryan Holmes, the CEO of Hootsuite: The Steak Dinner Clause
I was a panelist at the Digital Hollywood Fall 2009 event, held at the Loews Hotel in sunny Santa Monica, CA (that's a picture I took on my iPhone of the happy hour event above).
You can find the PointAbout page describing the event here.
This is part of an ongoing series. If you haven't read them already, read :
I wrote out this entire post before, and then the computer crashed and I lost it all, so I haven't felt like working on it. Finally, I'm biting the bullet and starting over :