Good Morning America anchor George Stephanopoulos has called Marty lies one
of the most accomplished in persuasive negotiators I know thunder of latte's
negotiation a national training and consultant latts has taught over 100,000
lawyers and business professionals around the world to more effectively
negotiate was an adjunct professor of law at Arizona State University and
negotiated nationally and internationally on the White House
advance teams author of gain the edge Platts has been featured as a
negotiation expert on CBS CNN and Fox News let's received his law
negotiation training at Harvard Law School where he graduated cum laude and
was a Teaching Fellow at Harvard's Kennedy School of Government where one
of his students was former President Barack Obama about 20 years ago I was
driving south on the squat Peak Parkway in Phoenix which is one of the major
north-south freeways going through the Phoenix area where I live when all of a
sudden I heard this horrible grinding noise coming out from my engine now I
had heard a similar noise literally the day after I graduated college went to
college at University of Wisconsin at Madison and I was driving to Washington
DC for a job interview when literally in the middle of Ohio I heard a similar
noise and at that point I had to replace the engine in my car
20 years ago I heard this noise again and I thought oh no here we go again
so I nursed the car into the nearest Nissan dealership where I'd been before
and I brought it to John I guess they call them service consultants these days
and I said to John okay John tell me what the damage is so John listens to
the noise a little bit and he says smarty I tell you what why don't we give
you a ride back to your office and I'll give you call in about an hour and let
you know what we need to do so I say okay John I get a ride back to my office
I'm practicing law at the time and about an hour later about 10:30 in the morning
telephone rings answer the phone hello this is Marty lats says hello it's John
at the Nissan dealership are you sitting down yes John I'm sitting down not a
great way to start out this negotiation and John says Marty it's gonna cost you
nineteen hundred dollars to fix your car now if this was my previous car the car
that I had when I graduated college it would have been a very easy decision
because that car wasn't even worth nineteen hundred dollars but this car is
worth a little bit more than nineteen hundred dollars and so I ask you from a
negotiation standpoint what's my first step should I simply say to John okay
John just fix it and call me Center should you do something else what
would you do if you were sitting in my shoes find out what the problem is right
so the first thing you're gonna do in this negotiation the first thing you're
gonna do in any and every negotiation is get information right my first golden
rule information is power so get it so I'm gonna start asking John questions
what's wrong with the car what else is wrong with the car what else is wrong
with the car and I'm gonna basically try to find out you know what what what is
he gonna do for me that will help me in this context by the way what is my goal
in this negotiation what am I trying to accomplish get it done it's cheaply as
possible right so I've got a financial goal what other goal do I have actually
get it done in a quality fashion right so I've got a financial goal I don't
want to be back into the dealership two three four weeks later having the same
stuff work done so I've got a financial goal I've got a quality goal and I've
probably got a little bit of a trust goal I've been to John before but after
all John does work for a car dealership so I want to make sure that what he
tells me is wrong with car is actually wrong with the car so I have a little
bit of a trust goal as well what other information do I want to find out from
John in addition to what he tells me is wrong with the car what are my other
options right do I have to get everything fixed or can I get just a few
things fixed perhaps not surprisingly John tells me everything needs to be
fixed what other information do I want to find out how long is gonna take right
he tells me it's gonna take five hours to fix the car in fact he tells me
because it's gonna take five hours to fix the car I need to let him know by
noon if I want to get the car back that day if I tell him afternoon he keeps it
overnight and I don't know how many of you at all familiar with the Phoenix
area but at least at that point in time we didn't have any significant public
transportation options and I only have one car so John gave me a deadline of
noon in this negotiation raise your hands if you have deadlines and your
negotiations probably all of you right so get all this information from John
what's wrong with the car how long it's gonna take by the way he also tells me
he's giving me a 10% discount on the parts in part because of our
relationship have you heard this before I'm getting a relationship discount he
also tells me he's charging me 78 dollars an hour for labor so
all this information from John what's wrong with the car long it's gonna take
what's my next step in the negotiation so did I say this should I say to John
just fix it and call me when it's done or should you do something else
what would you do if you were sitting in my shoes get another estimate right so
raise your hands if this was you if you would call least one other car repair
facility keep your hand raised if you would call two or more others three or
more four or more anyone know well I called five others
four other dealerships one independent car repair facility right get a little
competitive bidding going for my business by the way what should I say
when I call him up should I say hello my name is Marty glad sounded nice on it's
got about 50,000 miles on it it's over at John's dealership John says this is
wrong with the car he tells me he'll charge me $1,900 to fix it what were you
charged is that what I should say what information that I shared was too much
information I'm seeing a lot of people shaking their heads the price because if
I tell 1900 what are they gonna tell me 1800 1850 1895 they're gonna give me a
little bit of incentive to get it fixed there that's not gonna satisfy my
financial goal should I tell him I'm shopping around yeah absolutely tell him
you're shopping around right I'm not only don't want to not only do I want to
get John's get them to be jeonse price but I want to get their best possible
prices and I want to create the incentive for them to give me their best
possible prices by the way as I'm shopping around getting this competitive
bidding going for my business I'm bumping up against that noon deadline
how should I think about that noon deadline should I be worried about it
concern ervis big deal small deal you're shaking your head what what well how
should I feel about this okay so you you're already thinking hey if you
missed the noon deadline what do you need to do right
worst-case scenario rental car cab you get a friend to give you a ride home
so my calculation is as I come up to noon is what are my alternatives if I
miss it and the value of what I am achieving if I miss it so you know how
much am i saving by continuing to engage in this process relative to the
potential cost if I miss the deadline and I'm saving
certainly the 30 40 50 bucks it would cost to rent a car so I'm gonna keep on
engaging in this process how much money do you think I'm gonna save by engaging
in this process raise your hands if you think I'm gonna save $100 or more keep
your hand raised if you think $200 or more $300 or more $400 or more
$500 or more okay some good aggressive negotiators here either that or car
repair facilities in this area really rip you off best other price I got was
1450 $450 saved a couple hours shopping around by the way is it worth my time to
do this remember I'm practicing law at the time
you're thinking not well lawyers know how to charge for their time by and
large and I can tell you that based strictly on a financial analysis based
on my hourly rate based on what my clients are paying me it is not
financially worth my time to spend three-plus hours engaged in this process
except for one consideration I love this stuff
I'm getting great enjoyment value out of working these dealers off against each
other and I'm figuring you know who knows maybe I'll get a good negotiation
story for one of my seminars West Valley Nissan said they'll do it for 1450 it's
not about one o'clock what's my next step in the negotiation well you know I
do need to evaluate whether or not to get a toad over there that's right
and that goes to what I'm willing to pay but before I go to that extent what do i
what do I want to do I want to go back to John now what do you tell John do you
tell him 1450 do you tell him you can get it done cheaper elsewhere or tell me
what you think of the following I called John back I say something to the effect
of them John I thought we were friends I thought we had this good relationship
might as well use that relationship car back up against him I've called around
just to check into the fairness and reasonableness of your price and I can
get it done for $1,200 what do you think a little bluffing a little puffery good
idea a bad idea bad idea right by the way this is not bluffing this is not
puffery this is a flat-out not lie it's a misrepresentation and if you did that
in a significant legal or business context you've got some fraud issues
floating around out there but beyond that it doesn't work because you have to
figure that John has some level of knowledge of appreciation for the value
of car repair services in that market and the danger is he says what twelve
hundred bucks go for it in which case it's actually gonna cost me fifteen
hundred fifty dollars to get the car fixed hundred dollars to get it towed
more of my time and even I'm ready to get the process finished at this point
so now the question is should I say 1450 or should I simply say I can get it done
cheaper elsewhere I'm gonna say 1450 in fact not only am I going to say 1450 I'm
going to say hey it's your buddy Jerry over at West Valley Nissan and here's
his telephone number if you want to check the more detail and specificity
you provide about your alternatives about your leverage the more likely
they're gonna act and react as a result of it and then what am I gonna ask John
to do not gonna ask him to match it what am I gonna ask him to do instead beat it
doesn't cost me anything to ask fundamental negotiation point you don't
get what you don't ask for so ask him to beat it and he tells me the following
tell me if you've ever heard this in any of your negotiations
he said Marty I would love to beat it in fact he said I'd love to match it but I
can't I just don't have the authority yeah you've heard this before
a couple thousand times perhaps I just don't have the authority let me go talk
to my boss my supervisor my board I constituents my spouse and get back to
you he goes he talked to his boss he comes back he says Marty I can't beat it
but I can match it which is actually better than my leverage suggests I can
do I'd be willing to pay fifteen fifty it's not about one o'clock am i done
what do I still want done by the end of the day that raises a really interesting
question what if John now says in fact Marty I can get it to you by 5:00 what
does that now tell me about what he's been telling me the whole time he wasn't
honest about how long it was gonna take he lied to me about how long it was
gonna take and if ma if he lied to me about how long it was gonna take now my
question is did he actually lie to me about what's wrong with the car if he
actually tells me he can get it done by 5:00 I have to give serious
consideration to actually having the car towed having somebody else independently
evaluate what's wrong with the car because you know it tells me it's gonna
be done by 5:00 I don't know if what he told me is wrong with car is actually
wrong with the car but he doesn't tell me he'd get it done by 5:00 he tells me
he's gonna have to keep it overnight which means I need what a loaner car so
what do I do ask him to throw in a loaner car right after all he works for
a car dealership he's got a couple of cars lying around a lot so ask him to
throw in a loaner what's interesting about it what he said was not only what
he said but when he said it he said Marty we would be happy to provide you
with a free loaner car in fact he said it is our policy to provide free loaner
cars to anyone whose repair bill exceeds $1,000 when did he tell me about this
policy after I asked after I asked what we just discussed what we just discussed
goes to almost every strategic element of the negotiation process and in fact
it's a process as Jim mentioned in his introduction that we've been engaging in
almost our entire lives I've got an 11 year old
he's been negotiating for about nine and a half years now because when he doesn't
get what he wants from his mom what are the first words out of his mouth
daddy daddy that's exactly right but I would also suggest that we tend to
negotiate instinctively or intuitively we tend to sort of do it off
the cuff we tend to sort of wing it and I'm not suggesting you don't do your
homework I'm not suggesting you don't do your due diligence I'm not suggesting
you don't learn the facts of the matters in front of you but what I am suggesting
is that we tend to negotiate instinctively or intuitively we tend to
sort of do it off the cuff and we really don't spend the time in the effort that
we should focusing on the process instead we focus almost exclusively on
the substance and that's what we're going to talk about for the next 90
minutes or so we're gonna do a little bit of a deep dive into the research on
the negotiation process and one of the things we're gonna find is that there's
been a lot of great research in the last 3040 years in this particular area and
we basically now know there is a right way to negotiate and there is a wrong
way to negotiate now I'm gonna try to empower you this afternoon not only with
the knowledge of the right way to negotiate but also to try to help us
understand so when we actually go back onto the front lines which is where you
negotiate every day you can actually put these strategies into practice within
the context of a process that has an almost unlimited number of variables
floating around at any given point in time and if we actually go back and
analyze that car-repair negotiation you'll see we actually went through a
systemic discipline step by step process that increases our likelihood of
accomplishing our goals because what was the first thing we did in that
negotiation we asked questions we got information we set our goals first
golden rule of negotiation information is power so get it what was the second
thing we did in that negotiation we called around we shopped around we got a
little competitive bidding going for our business fundamental issue in
negotiation fundamental element of leverage is what are you going to do if
you don't do a deal with John what's your alternative what's your plan B we
went through the third golden rule of negotiation employee fair objective
criteria how you evaluate in any negotiation what's fair or reasonable or
unfair or unreasonable I found out for instance in the Phoenix area that the
the the market for car repair services and the cost for labor ranged anywhere
from 55 dollars an hour to 88 dollars an hour I was getting anywhere from
anywhere from a 5 to a 25% relationship discount down the parts gave me some
benchmarks on which to determine what was an appropriate amount to pay for
those car repairs services third golden rule employ fair
objective criteria we went through the fourth golden rule design and offer a
concession strategy John made a first offer I never made a counteroffer until
the very end when I said okay let's do it we even went through the fifth golden
rule control the agenda John gave us that noon deadline that was his effort
to control the agenda to limit the amount of time I could spend engaged in
this process we came up to that noon deadline we said a not a big deal to
take back control the agenda so we can talk about what we want to talk about
within the context of the process look as I said before we tend to negotiate
instinctively or intuitively well we're gonna do for the next little over an
hour is we're gonna try to shift your mindset and your behavior your mindset
and your behavior from instinct over intuitive to strategic based on the
experts proven research from instinctive or intuitive to strategic based on the
experts proven research