Over the past year, I have noticed an increase in "scorched earth" negotiating tactics. These are tactics which move beyond "going kamikaze" that I talk about in Negotiating with Backbone. This new tactic indicates that the other party is going to angrily walk away from the deal and hurt each of the parties in doing so. Here's what I have learned: so far in every case, while it is an escalation of normal poker playing, it is still just a tactic to get a discount.
We had a real estate negotiation last year that came down to the wire. The seller refused to do anything to fix the property and had left a considerable mess. We went to the closing with a letter which would have tied up the property for six months, if they did not at least do us the courtesy of leaving a clean and empty house. But that was not enough. To indicate our seriousness, we had a planned explosion, stating that we did not even ask them to fix the safety issues, and if they could not get the house clean, we were walking away. We rose and started to leave the room. That was enough to get the other party to fold and complete everything expected.
We've had some situations where the client we were advising folded and granted the discount. These are heart pounding, nail biting, stressful situations. The buyer knows it. So once they get the discount, they come back for more and, knowing they got a great deal, ask next for a longer-term contract.
The reason this is important is that many of you are trained on what we call "kumbaya" tactics which focus on a high level of respect between parties. As a point, they are great tactics but only up to the point that the other party scorches earth. We find that in these cases, the other party:
- Hasn't anticipated the problem,
- Is afraid to intensely stand their ground, and
- Therefore get their clocks cleaned in the process
During the negotiation, customer anger can effectively signal their commitment to their position. Your response must be done carefully. In our case, we had an attorney who had been clued into the tactic and played the part of the cooler head to bring the deal together. Without that, anger can cause the parties to split and make coming back together more difficult.
As a general rule, I like to see people get angry when they understand that they're being played by the other party and then establish an intense, no-backing-down position that reflects the realities of the deal, not the theatre of the negotiation.
From: Want to Win a Negotiation? Get Mad by Elizabeth Bernstein in The Wall Street Journal, November 7, 2017