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May 12, 2009

9 negotiation lessons from the trenches

May 12. Day 316.

What do buying a car, locking up the Chicago mob and being a total rockstar have in common?


This afternoon, I found myself in the living room of Gay Hugo-Martinez, a professional acquaintance. (It's related to the side work I do.) Once our meeting was over, I asked her about her background, since I'd heard she used to be a lawyer and totally changed tracks a few years ago.

Turns out that before moving to San Diego, she fought organized crime in Chicago in the 1970s.

As she sat demurely in her sunny home, she poured out stories complete with phrases like, "Organized crime figures won’t kill prosecutors. They know that if they kill one, there's another one right behind them that will do the work." Another gem: "If one of us has to go into the witness protection program, that’s not going to be a picnic" (words she told a colleague back in the day). And, my favorite: "I knew that if he (the hitman she put behind bars for 25 years) wanted somebody killed from his jail cell, he could do it."


And then, she mentioned the golden word: negotiation.

"Negotiation? I'm obsessed with that! Can you tell me more?"

Being a federal prosecutor involves a lot of persuading, negotiating, getting the other side to do what you want, she explained. Here are a few tips I gleaned from our brief but riveting conversation, which she kindly agreed to let me post:

Interview with Gay Hugo-Martinez about Negotiation, Empathy, Playing Hardball and Playing Fair

1. Know your strengths and weaknesses

Enter any negotiation with a firm idea of what you're willing to risk and what you stand to gain. Obviously, the stronger your strengths, the more bargaining power you have. "How much are you willing to give in order to get what you want?" she asked. For best results, figure this out before starting.

2. Know the other side's strengths and weaknesses

This helps with persuasion, knowing when to back away, knowing when to press harder. Think about it. If you can deduce what the other side is willing to give up, or what it can't stand to lose, you have the advantage. A simple example: this is a great time to buy a car, since dealers are struggling.

3. "Go for the gold"

"Ask!" she said. Yes, ask. Her word exactly. So many times, people shoot themselves down. She tells this to her kids, to strangers in her living room asking about asking. Ask! Ask for more than you think you'll get, ask when you think you might not get. "You have nothing to lose," she added.

4. Be empathetic

Empathy can be a powerful tool. It helps you imagine the other side's position, and it might encourage you to take reasonable risks. For example, maybe you think asking for a free cucumber at the farmer's market is rude or silly. But imagine that you were selling veggies and someone asked you to throw in a sample. You'd probably be happy to show off your wares and attact a new customer with a sample. Not such a crazy thing to ask after all, right?

"It works better if you say to yourself, ok, if you were in this position and somebody came to you and asked you, would you think this was reasonable?" she said.

5. Be fair

Related to this: let's say your position is so strong, or the other side is so needy, that you could run circles around them with your demands. Stop. Think about it. Then play fair. It's what you'd hope from the other side, if you were in the weaker position.

6. Enthusiasm can be your friend

I used to think that if you look excited about something in a negotiation, that was a weakness. For example, "What a perfect car! I reeeeeally want it! Yipee!!!" could tell the dealer that I'm eager and willing to pay anything. Bad.

Not necessarily so, she said. Who would you rather deal with: Someone who really likes your product but claims she has a limited budget, or someone who doesn't seem to like your product but claims she has a limited budget? Who's more likely to seal the deal?

This is an especially useful foundation for the next step:

7. Hardball: Walk away

If you're not getting what you want, and if you know you have a strong position, walk away, calmly and coolly.

"In negotiation, if you have a positon and you think you’re right, it’s better to pull back and walk away and wait," she said. "Then the other person knows there’s some credibility in your position, and that may be your bottom line."

Added tip: never walk into a car dealership expecting to drive away. Always give them your number, then tell them to call you. Repeat after her: " 'I’m sorry, that's just not what I’m willing to pay. You guys change your mind, call me.' Then turn around and walk out."

8. Keep doing it

"The more you do it, the more comfortable you become, the easier it becomes for you to do it, and the better you get at it."

(After 316 days of asking, I can add: so true!)

9. Women do ask

I was curious if she thought women ever underestimate the strength of their positions (alluding to the idea that women may hesitate to ask because they don't realize they're in a position to do so.)

She replied that not every woman has good negotiation skills, but not every man has them either.

Good to keep in mind.

Gained: Advice from a masterful negotiator. And thanks again for agreeing to be featured on this blog!

Later, I did a small negotiation of my own.

I went to get Mr. A's car washed. The posted price was $13.99, but I wanted to test out a few of these tips.

My strength: the other car washes nearby, which might be cheaper or honor a coupon I had
My weakness: no time or desire to move
My insider knowledge: many businesses offer coupons - so even if I didn't have his exact coupon, but maybe I could use that info to score?

His strength: convenience -- I was in his parking lot
His weakness: didn't have the best price
His insider knowledge: no idea

What I wanted: a discount and a clean car
What he wanted: a customer

"Hi," I started, from inside the car (trying to look ready to drive away). "I was wondering, do you guys have any coupons you could apply? Even if I don't have the actual print out?"

"No, I'm afraid not."

"Oh, ok. Because I have coupons for a bunch of car washes, but I'm here now. Any chance you could honor one of those?"

"I can do even better. Keep your coupon, and I'll give you $2 off any wash."

"That sounds good. Thanks!"

Gained: $2. Not exactly locking up the mob, but applied today's lessons, from theory to practice. Next step: buy a car, this summer. And save big time.
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