In my book, Confessions of a Government Man, I offer some tongue-in-cheek negotiating advice. My chapter on negotiating is appropriately called, The Sport of Negotiating, not only because negotiating is a sport to some, but because I draw many lessons from the sporting world.
In one of my career assignments with GSA I headed a team which negotiated close to a billion dollars in construction costs, land costs and professional fees. As I often stated, the psychology behind this kind of negotiation is not much different than negotiating for a suit on the Lower East Side. The only difference is the number of zeros before the decimal.
People have written volumes on negotiating, calling it an art, a science or whatever else they choose. Some have made millions using their negotiating skills, often by writing books like the Idiot’s Guides, conducting seminars, selling tapes or finding other ways to pry cash from people’s pockets.
My guidelines are very simple. Be prepared, know your opponent and understand that if you squeeze blood from a stone you may lose in the long run. I’ve seen my share of construction projects go down the tubes because the margin of profit was so tight and the contingency allowance so low that one unforeseen event could be the difference between success and disaster. Cleaning up after a contractor goes belly up is not pretty.
In the book, which I reiterate was intended as entertainment as much as business advice, I used two everyday, man in the street, sports related analogies, one of which I offer here. My examples are about negotiating for a game ticket in buyers’ and sellers’ markets. The events actually happened. These were simple transactions but the strategy of negotiating is clear.
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A conference I attended in Denver, Colorado provides one case study.
The Colorado Rockies were playing against the New York Mets. Most of us had never been to Coors Field in Denver so a group of three decided to go to the game one evening. Remembering that when the Rockies first opened for business Coors Field was a hot ticket, we were apprehensive about getting last-minute seats.
We set out via taxi for the ball yard and got an earful from our driver. From under his Stetson (everyone in Colorado wears a Stetson) he told us information that we didn’t know but was essential for a successful negotiation. “Don’t go to the box office,” he lectured. “The scalpers are going to get burned tonight. Make your deal at game time when they’re stuck with tickets.”
He told us that the Rockies were not drawing well and, most important, the Denver Broncos of the NFL were playing their season opener that night. As an added kicker, the Broncos were ceremonially retiring the jersey of their great quarterback John Elway. This assured next to no interest in the Rockies’ game. “Don’t let them finesse you,” was the cabby’s final advisory. He earned himself a larger tip with this hospitality, proving he knew how to negotiate also.
We had time to kill so we stopped at a watering hole for a brew. This was a pleasure venture but in business I would never go into a negotiating session after alcohol or a heavy meal. That’s the surest way to lose your edge.
Twenty minutes before game time we sauntered back to what amounted to an outdoor flea market for tickets. Since I was the senior person I was selected as the negotiator. We laughed off the first scalpers’ offer of seats “behind the dugout” at a mere ten dollars above face value. Eventually we found ourselves talking with a scalper who was a reasonable businessman. He didn’t insult our intelligence and he recognized that his product was losing value every minute.
We saw that there were far more sellers than buyers and this guy had a lot of tickets in his hand. “Twenty-five bucks each. That’s face value. No premium! Front mezzanine.” He knew we would never pay even face value but at least it wasn’t an insult. It was a starting point.
I learned when I was young that when a man is starving you don’t have to offer a steak. He will take a hot dog. “Two bucks each” was my counter offer. He feigned being offended but he knew that it was two dollars more than he would have if the tickets weren’t sold. It was now seven minutes to game time. He put his hands in the pockets of his jeans, spit through the gap where one of his front teeth had once been and rolled his eyes upward as the drool slithered down his western snap-button shirt.
After a little give and take and hearing how we were taking oatmeal from his baby we settled on five bucks each for the tickets. We were happy. He was happy. I truly believe that if we waited until the first pitch was thrown we could have had all three tickets for five bucks but being greedy is not good negotiating.
This deal had a little of everything. We were prepared, albeit not until after the cabby’s advice. We knew our opposition. He was stuck with these tickets and had to make a deal. We knew our objectives (five bucks a ticket), we didn’t fall for the self-serving endorsements of the first scalper and in the end everyone came away with something. We all agreed that this was a textbook example of negotiating principles.
The game was awful.
Postscript: This event was a few years back. I would NEVER recommend buying a ticket on the street now. With things like Stub Hub and print your own tickets, the likelihood is high that any ticket bought on the street is already void.