The Jordan Harbinger Show - 73: Alex Kouts | The Secrets You Don't Know About Negotiation Part Two

Episode Date: July 26, 2018

Alex Kouts (@akouts) is a teacher, adventure technologist, Chief Product Officer of Countable, and -- as you'll soon discover -- quite savvy in negotiation. This is part two of a three-part series. Make sure to check out parts one and three!  What We Discuss with Alex Kouts: How to control a negotiation by making the other side reactive. Common mistakes that result in amateurs (and sometimes even professionals) negotiating against themselves. Understand how to use strategic silence -- and know when strategic silence is being used against you. How negotiations tend to differ for women and men. What we gain by giving the other party the illusion of control over the negotiation and what we can do to nudge them in that direction. And much more... Like this show? Please leave us a review here -- even one sentence helps! Consider including your Twitter handle so we can thank you personally! Sign up for Six-Minute Networking -- our free networking and relationship development mini course -- at jordanharbinger.com/course!  Full show notes and resources can be found here. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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Find Conspirality on Apple Podcasts, Spotify, and wherever you get your podcasts. Welcome to the show. I'm Jordan Harbinger, and as always, I'm here with my producer, Jason DeFilippo. In today's conversation, I've got Alex Kutz back again. This is part two of our negotiation series. There are three parts of the series,

and this stuff is awesome. We got a ton of great feedback already from part one, and part two has just got even more goodness and goodies. Alex is a master negotiator. He's been teaching negotiation classes for years. He's one of the smartest guys I know. He's worked with really big companies, governmental organizations, entrepreneurs, companies you've all heard of people we've all heard of that I can't even mention here. And he's just been toe to toe with every – he loves it.

It's like a sport for him to just go and run a mattress salesman or a car salesman or some sort of, you know, senator, for all I know, through the ringer. And he's a master of it. And he's great – he's great at teaching it. So I'm happy to have him back here. So I want to make sure that you all are absorbing this. If you haven't heard part one, go back and listen to that. They are coming out in order. And next week, we're going to have part three as well.

So don't forget, we'll have worksheets for today's episode so you can make sure you solidify your understanding of all the key takeaways here from Alex Kutz. That link is in the show notes at Jordan Harbinger.com slash podcast. By the way, I've been teaching networking. It's been the number one lever in my life for personal and professional. When we had to rebuild the business, my network was there. It's the reason we're back at over 5 million downloads a month.

It's a reason we were picked is Apple's Best of 2018. It's the team. It's the network. It's the people around you. And I created a free course to teach you how to consistently engage and reach out to people in your personal and professional network. It's free. I just look, this is not one of those things where it's like enter your credit card number. This is free.

I want it to change your life. That is what it's, that's the whole point. And it's called six minute networking. If you were in the old one level one, it replaces that. It's new and improved. Six minute networking. and it's at Jordan Harbinger.com slash course. That's Jordan Harbinger.com slash course.

See you in there. All right. Here's Alex Coots. One of the concepts that I find so interesting about this is the concept of making or the idea that we should make the other side reactive. And not like provoke them per se, but what does this mean? So in a negotiation, you want to or endeavor to construct a dynamic where the other side is worried about taking actions they're going to piss you off or throw you off. and that they're going to lose the sale, let's just say, not the other way around. So let's take a job offer scenario again because that's so common to many of us.

Often when the company makes an offer and then we are reacting to that offer, we are constantly in the situation of them providing information and us reacting to it. And that puts us at a disadvantage from a leverage perspective or a perceived leverage perspective because they're controlling the conversation. Now, this is happening right now in the media with Donald Trump, right? The media can't help itself but react to every little tweet, everything that the guy does. So as much as like the mainstream media is trying to like cover him responsibly, let's just say, let's give them the credit to say that they are. He's completely controlling the conversation because he's so wild with his responses that they can't do anything but control them.

He has all the control in the situation. So it's similar in negotiations. So what we want to do is construct a dynamic where we're not constantly reacting to what other people are saying that they are also reacting to us. So in a job offer scenario, which we'll walk through in a moment, kind of an end-to-end thing, we want to construct that dynamic. where they give us the offer, then we turn it around so that they are now reacting to us, as opposed to they around. So we'll walk through that in a minute.

So keep this one in your mind. We'll come back to it. All right. A lot of people I notice also negotiate against themselves. Oh, my God. And this is a lot of this, I think, is born of social pressure. And what this sort of sounds like is, all right, well, this is $300. And the other person goes, I don't know.

And you go, all right, $250. Yeah. How's that sound? Yeah. you and are violating one of the inviable rules of men that we were talking in the bathroom about this before, but like junior sales people do this kind of shit all the time, right?

They make an offer on the phone, and someone who's responding to that offer is just silent for a little bit, and then they go, okay, well, it's $300. Nothing on the other side. But, you know, we're negotiable on that, and okay, well, we want to work with your budget and that kind of thing. Their side hasn't said anything. They're already beginning to counter themselves

without the other side having to say a thing. So often, you don't want to give people a way out. Another way that this manifests is when we make offers, we add the little thing at the end to say, or I'm negotiable. Like, I think this is what I, this is what I would like, but I'm willing to negotiate on that. That's me negotiating against myself. Whereas the smart play, the powerful play is just say, $300, then wait and let the other side react to that comment, as opposed to inviting them to give you a counter.

Right. And it feels so good because you release that pressure when you say, well, you know, we're flexible on this. Yeah. And even sometimes, I have to catch myself. from, stop myself from doing that. I'm experienced with this. You know, I was in sales for a long time.

I've run a business for over a decade. I still have to stop myself from going, well, you know, it's this much. But I'm also flexible on this if there's other things that we could figure out. And then you're just going, I catch myself and I go, damn it, what am I doing? So it's funny. I mean, that's one of the more overt ways people do it. They say, but we're flexible or, oh, but I'm interested to hear what you're saying. A more kind of discrete way is that people say things like, but we're really excited to work

with you guys. Or like, we'd love to have your business or something like that. When they do that, they're communicating that they're extremely eager to get your business to make it seem like they're going to bend over backwards or be more pliable. Interesting. I never really thought about that as also being a subtle hint that they would negotiate against themselves, but it makes perfect sense. Yeah, it's huge.

In fact, I was negotiating something yesterday, and the company did say a lot. We really like working with you. We're definitely, we want to figure something out. We'll look at other options if we can't meet on the financial side. Yeah. They're telegraphing weakness at that point. To put it a little bit less mean than that, they're telegraphing a willingness to listen to a counter that you're going to come back with. So, you know, I would always say in a negotiation, don't volunteer that.

Don't introduce weakness into your offer unless you absolutely have to. Now, if you're selling something, you may have to come back later and say, okay, well, that doesn't work for you. What about this? Or give me your budget, give me more information, and then I will give you a counter that makes sense to you. But that should come later and they should ask for it as opposed to you volunteering it. That makes sense. Okay. Great.

So really closely tied to that is kind of the next one, which is strategic silence. So one of the things that I teach in my class is that we have this gigantic hole in the middle of all of us called the human condition. And we're constantly trying to fill that hole with all of the affectations and hobbies and all kinds of things that we do. We're trying to fulfill or kind of take care of our insecurities. So as a result, one of the ways in which that human insecurity, comes out in negotiations is how painful silence can be. So like we just mentioned, someone makes an offer over the phone, and there's some silence, and then the junior salesperson immediately starts negotiating against themselves.

That's because they can't take the silence. They assume the silence, they feel this excruciating pain when there is silence. So let's make it a little bit more human. So let's say I'm at a bar and I meet the girl in my dreams, and it's fantastic. And I see her from across the room. I hear wedding bells, the room like parts, and it's just her and me and nobody else. and it's amazing. We start chatting it up.

Everything's fantastic. She gives me your number. I go home. I can't wait. She shows up in your apartment randomly three months later. I remember that story. Different story. Different story.

Totally. Totally different story. But I'm glad I made out of that one with my life. But anyway, so we exchange numbers in the next day. We're immediately texting back and forth. Neither of us can wait to talk to each other. We can't play it cool. Every two seconds going back and forth.

Jokes, memes. Haha. L.O. I'm going back and forth with my friends like, hey, what do you think ha ha ha with five has mean? better than LOL or is that not as good as LOL? What do you guys think this means? And I'm trying to like decode it with the damn Rosetta Stone to figure out what this person's intentions are. I'm stressing out over this text message conversation, but it's great. And then maybe back and

forth, I use some joke that's like slightly riskier like a Trump meme or something political in nature and there's silence on the other end of the phone. Oh, this happened with me and my wife. Yeah. Yeah. Oh my gosh. I know where you're going with this. Yeah, what happened was we were talking on this app. This is obviously before we got married before we even really were dating. In fact, I don't even know if we'd met up in person yet. Farmer's only, right? Farmer's only. Where that's my secret weapon. Beautiful. And I can't remember exactly what I said and it sure doesn't matter and I never, even if I did, I probably wouldn't repeat it. But I said something along the lines of, well, you know, it doesn't matter. But then it was dead silent. And I went, oh, man.

And I resisted the urge to fill that in because I knew from experience that if you couldn't, oh, Oh, I'm sorry. Was that all that? I just left it. And then the next day I was like, so what happened? And she goes, oh, I fell asleep. Yeah. And I was like, thank God.

Yeah, there could be a million reasons why that happens, right? Yeah. Maybe Jay fell asleep. Maybe she, like, did something else. Like, who knows? Maybe, like, you know, she had a soccer game or like a polo match or whatever the hell of it is. Water polo, for sure. Whatever she does.

I'm sure she has weird hobbies. But the point is we assume the worst because of all of our insecurities because of this human condition. So in a negotiation, when a negotiation, when there's a moment of pause, even in conversation over the phone, it's excruciatingly loud to us. It's deafening silence. So that is used on us frequently, sometimes intentionally, sometimes unintentionally. We can also use it for our own purposes.

So an example, back to the job offer scenario, someone gives me an offer. That doesn't mean that I just don't respond for 15 days. That is not the right way to handle that situation. But creating some strategic silence for yourself in a way that is socially acceptable saying something like, well, when do you need to make the decision by? Or when do you need me to get back to you by? That will create some time. They'll say, okay, by Friday we'd like to have an answer back.

That will not only create distance for you, but it also creates the sense, the person on the end of the phone, the HR representative is going to assume you're looking at other jobs or something else that you need to decide before you can make a decision on this. So it solves kind of both of those purposes. But the point is, understand when strategic silence is being used against you. Understand why you have that reaction to it. It doesn't necessarily mean something bad is happening. It also could be just, again, the human condition for us.

And then learn how to use it strategically for your own purposes. Create it intentionally inside of conversations and negotiations to your benefit. How do we create it? So in the job offer scenario, I'm creating distance by saying, when do you need an answer by that creates that time for me to think about it? Let's say I am buying a car. And the car salesman goes, okay, I'm going to give you a great deal. Let me talk to my manager. I'm going to come back.

I'll give you the best price. he comes back and he goes okay here's the best price 24k out the door here you go best price you're really breaking my balls is great and then i just sit there and stare at him i'm like hmm i'm not giving anything back charlie manson eyes exactly i'm if you're if you're if you like poker phil ivy the guy just like stands there like he's in the middle of having a seizure like eyes wide open like mouth open like giving absolutely nothing back the person will eventually start talking i've heard folks in kind of a sales training capacity as i've trained sales teams myself say things like the first person after an offer has been made, the first person to say something is the one who loses.

Like, that's some game in and of itself. So let the other person talk. I would imagine that has its limits. You don't just pick up your phone and check email until the other person decides to say something. Yeah, it's super weird. Yeah, you can't use it in a weird way. You need like a societally and socially acceptable way to create that distance for you. What about some of the gender differences in negotiating?

I brought this up earlier in the first part of the show, which was that, I've had female friends of mine bring me to car dealerships because they know that I'll negotiate better or that I'll do something that they might not do. And it's not just because I'm a guy and their girl. It's because they trust me in on their friend, et cetera. And because my dad gets wicked for discounts. But also, there is some element of gender disparity when it comes to negotiation. Oh, yeah. It's a real sensitive topic in 2018 to talk about this stuff.

But I will say before I get into it that this is not a value judgment one way. the other. I fundamentally believe that women are better prepared to be negotiators than men because empathy becomes more naturally to them. And there's all kinds of things that happen that equalize the sexes in terms of like outcomes longitudinally. But this is not a value judgment. There are different patterns that we see consistently across different genders. So for instance, men before they walk into a negotiation are much more commonly will psych themselves up. They'll go into this kind of predator mentality. There's that joke in 30 Rock where before negotiation, Jack Donaggy, played by Alec Baldwin, will look in the mirror and goes, you're a lion,

you're going to get there and kill, your mommy's little boy. He's like psyching himself up like a maniac before he walks in and sits down to the negotiation table because it makes it easier for him to, again, advocate for his own self-interest. Now, men do that very commonly. They will psych themselves up. They will look at negotiations as a zero-sum game. Women tend to be on the inverse, where as opposed to looking at negotiations like a zero-sum game, they look at it as a relationship developing exercise, where I'm focused on community and moving towards the right goal eventually as opposed to winning right now. Men tend to be very short-term focused in outcomes and goals.

Women tend to own long-term outcomes. So men will often in negotiation scenarios, and we see this a lot with business-to-business or sales, outperform women in short-term sales, whereas women will outperform men in long-term deal value. Another thing that we see a lot and how this kind of plays out in a really unfortunate way is that women often don't ask for the things they want. As we mentioned before earlier in the show, women, you know, it's been estimated are somewhere in the neighborhood of 64 or 5% less likely to negotiate than men when it comes to job offer scenarios. That's a really big problem.

And it also contributes very heavily to the paid gap between men and women. So how do we mitigate this? Do we just understand that this is the case that often if we're for a woman, we might not be asking for what we should be because of the way that we've been programmed socially or the way that we've been raised and we should just be aware of that? Yeah. The first step is always being aware. Now, not everyone conforms neatly to the gender which they were assigned at birth. Sure. Right? Some people are, some women are more masculine in the way they approach negotiations. Some men are more feminine, so to speak. I know that may sound like a negative connotation, but it isn't in any way. Men may focus more on relationships and community. So not everyone is the same. These are general kind of archetypes. But I will say if you are, if you do conform to one of these, know that, be aware of when you're doing it and figure out the weaknesses of it. So again, for men, if I'm really male- focused and I'm super dominant and psyching myself up that predator mentality, consider the community aspect of it, consider the relationship and long-term outcome side of it. If I'm a woman and, you know, I'm focusing too heavily on the relationship side, and this is very common for women, women will often de-escalate their own needs in light of other people's

needs. So imagine if there's a disparity. Other people's needs are at square one. I'm putting mine two squares down from that because I don't want to rock the social fabric that much. That's one area where I work with a lot of women specifically to kind of fight. that impulse because you need to bring your interests at least at par with other folks. And don't feel guilty about that.

Because at the end of the day, if you're not advocating for your own self-interest, no one's going to do it for you. You will consistently be taken advantage of, not just by individuals, but by situations. That makes sense. I guess a hack to this might be thinking, well, am I negotiating on behalf of myself or am I negotiating on behalf of maybe my kids? Yeah. I think if you think about it that way or my family.

Exactly. Are my needs less important now? Well, no. If I don't get this raise, I can't send my kid to the school that needs to go to to get educated and get a career that pays better than mine. One thing that made it really easy for me is, you know, I start companies for a living. I have a fiduciary responsibility to my employees to protect them and their livelihood. And if I'm not maximizing my company's value in a deal, I'm putting them at a disadvantage. I'm hurting my ability to employ them.

If your family is same thing. Like, I need to protect my family. I need this money because I can spend it on my kids. I can spend it on an unforeseen health issue that comes up, all kinds of things. So you, again, have a fiduciary responsibility to yourself to maximize personal value in negotiating scenarios. Because, again, no one will do that for you. I think a lot of people are also in a hurry to get the negotiation over with. They want it to be over.

They hate every second of it. The quicker this ends, the better. Let's alleviate the social pressure. And I think that causes problems. It does. Yeah. I mean, you keyed in a really important issue. When you rush, you make bad decisions.

And like we talked about before, everyone is generally terrified of negotiation. They just want it to end. Even people who do it on a daily basis. When you enter the realm of negotiations, people become sensitive and you can lose them. Even as a salesperson, I want it to end and I want it to end quickly for a favorable outcome for me. And so what I tell people in negotiations is be aware that we want the negotiation to end. And so we're going to over-optimized for getting it over with. So that's situations where we say yes to things.

that we don't want. We don't want to say no because we just want to get it over. One of my favorite examples of this is poker players go on tilt sometimes. You've heard that phrase before potentially, but I used to play tournament style poker. And that may mean that I'm playing for 15 or 18 hours at a time if I'm doing well in a tournament. But if you get a bad beat in a tournament, especially if you're like mentally taxed already, you can't let it go. And maybe it's one person at the table took my money and I want to get that money back. So I just go after blood. I go into that kind of bloodthirsty Viking. What's that thing they talk about when like Vikings go crazy?

Berserker mode. Yeah. Exactly. You go into this like berserker mode. And so the way to fight that in poker is just slow it down. Just start auto folding some hands. Get up, walk around, take a breath, create some distance, and just chill for a second. That is huge.

And in negotiations do the same thing. You don't have to react immediately. One of the things that I teach my students heavily is if anyone gives you an offer of any client, no matter what the situation, don't react immediately. Your first reaction should be no reaction. Should be, okay, got it. Thank you. I appreciate the offer.

When you need an answer by. Let me think about it. I'll get back to you. Even if the person is standing in front of you, okay, can I have a moment to think about it? I'll be right back. Create some distance. Slow it down. Relax.

Don't go on tilt and fight that impulse to immediately give an answer. Interesting. So don't pull the Phil Helmuth, get up and start yelling at the people at the table. The biggest baby. Definitely. Well, for that guy, he's fully optimized his life. around being the big baby and can throw other people off intentionally. But yeah, don't be that guy.

He was on the show. Oh, great. Yeah. I hope he's listening. Maybe not to this one, yeah. I hope not. He's a great, he was really nice. Yeah, I know.

He's supposedly a great guy. So the next one that's huge here. And, you know, this is one. We referenced the book before, never split the difference by Chris Foss. Right. But one of the things that he talks about a lot is the illusion of control. So before he could become an FBI hostage negotiator, he was asked to be a suicide hotline phone responder.

So when someone calls in, they're looking to commit suicide or they're having suicidal thoughts, he's the person that you're talking to at the end of the day because that prepared him to be able to negotiate for life and death scenarios on behalf of the FBI. And so one of the real interesting things here is that when he was talking to people in those situations, he said he would use a late night FM DJ voice. It's kind of funny because we're sitting in a recording booth. So I feel like I can do this very convincingly, but he would slow it down. He would deepen his voice. he would talk very calmly and he would put the other person at ease.

Now, the reason that he wanted to do that is if I'm talking... He's so bad at that job. Yeah. Oh, man. Oh, you're going to pull the trigger? Oh, yeah, you're a tough guy. Go ahead and do it, do it. Do it. See if you have the balls.

I don't think you have it in you. Shoot. That did not work. Yeah, that'd be a rough one. Yeah, sometimes we're not. It's okay. You're going to be great at a lot of things. Yes.

Yeah, hostage negotiation. Definitely not one of those things. Yeah, but the whole point is, like, we want people. to be calm, but we also want to give them the sense that they're in control, this illusion that they're in control. When people feel like they're out of control, they begin to shut down. There's another theory inside of behavioral psychology. If anybody on the listening is a big fan of Reddit or injury, you'll probably see this frequently on those platforms reference, but it's called the terror management theory, that every decision that we make in our lives is in some way either

directly or indirectly abstracted away from our fear of death. Now, the interesting thing there is that our fear of death is very closely tied to our feeling of control. If I feel like I'm out of control, things are going down a bad angle. You know, all kinds of bad things could happen. I could die in an extreme scenario. So because that's hardwired into us at this kind of deep operating system level, when we feel like we're out of control, we have this unreasonable level of anxiety that comes up as a result of it.

So in negotiation, when people feel like they're out of control, it triggers an anxiety response from them that can make them shut down. So if you're talking to someone on the other side of the table, then you feel them beginning to shut down. using body language or inflection and reading that, which we'll talk about in a minute, take it back from them. Step back, maybe take yourself out of the context of that conversation and help them reestablish their sense of control so they don't immediately shut down.

So it's possible for you to have a productive conversation. Yeah, because we don't want to push too hard and then people just check out. Yeah, exactly. That doesn't seem productive at all. And I can understand why people do that. And I can also understand the idea behind wanting to kind of dominate someone so much. watch that you're like, I've got this, but it's going to blow up in your face, I think. Yeah.

Yeah, I mean, I have this problem a lot. I am a taller guy. I have a deep voice. I make a lot of direct eye contact and direct body language, open body language. And I can be very intimidating in some cases. So in those situations where I can see that I'm upsetting someone else that I'm talking to or they're beginning to shut down, maybe they have some closed body language like they're beginning to touch their face or hands or neck, I will begin to modulate the conversation.

I'll step back and I'll stop talking about that. I will maybe talk about something that will put them at ease. I will find a subject that we have in common, of a common interest. Maybe I'll talk about the fact that I'm Greek. Everybody loves Greek people. They see my big fat Greek wedding. They love bach, blah, va. And so I'll kind of step back and change the focus of the conversation, again, to put them at ease.

Yeah, that's wise. Does it only modulate that tension or does it actually work against us? Is there any risk of this working against us, I think, is what I'm trying to ask here. Yeah, so any one of the pieces of voice we're talking about here taken too far can be bad. Right. So if we go too far and we give them all the control and they're calling all of the shots that puts us at a disadvantage, we just want them to not shut down. We want them in a positive frame of mind so that they're still productive and willing to kind of discuss with us and be at the table. We don't want a situation where they can't have a constructive conversation because they're getting too defensive.

That shuts things down. So since most people want this to end, not the show hopefully, but the negotiation. Right. And generally. But the negotiation in general, can we use that to our advantage? If I know that you want to get out of here because you're not a great negotiator, but I'm experienced, can I use the fact that I know you are itching to get out of this and get this over with to my advantage? Oh, definitely, 100%. That's so huge.

In my negotiating tactics, when I negotiate with folks, one of the secret sauces that I have is that I work very heavily to take that empathy side of things, right, learning about what they want, what their interests are, to effectively help the other side see a win. So give you an example. So let's say I am going to buy a car. And I go to a car dealership and I'm walking around a lot and I'm talking with a car dealer or the salesman. And he thinks that I'm really going to make a deal today. Like I want to buy a car today. He's going to bend over backwards to get me what I'm looking for. If he thinks I'm shopping around, he's less likely to give me what I'm looking for because there's no point in it for him.

There's no benefit. That's why a lot of car dealerships really resist giving you quotes over the phone because it makes it too easy to go somewhere else and get a better price. But they don't want that. So in a negotiation, I will go through great lengths to make the other side believe that there is a favorable outcome that is realistic for them. I will go so much as to describe it or tell them that it's going to happen. Because if they know that, if they see the close of a deal and it's favorable to them, I can dip into that understanding. They're kind of thirst for getting a good outcome and I can extract value. So to what you were saying, you never want to underestimate how much the other side wants it to be easy, wants the negotiation to end.

very few people enjoy the brawl of it. It's painful for them. So if I tell you, I'm going to buy this thing today, if you give me the price I'm looking for, we can sign the papers right now. You're much more likely to negotiate with me. So I focus a lot of time figuring out exactly what they decide wants and then telling them it's right here on the other side of you just doing this one thing. And then once I get that thing, it's over with.

Great. Okay, I like that. So you're just sort of letting them taste the freedom of being done with it. Exactly. And then they got just sniffing their way to the door. Exactly. Yeah. So, you know, in the job offer scenario that we'll walk through in a minute, kind of step by step, the real thing that we're trying to do there is make the other side see if they give me the offer that I want.

If they give me the number that I want, the negotiation's over right now. There's not even a question. I'm not asking you through some like vague sense that it may be over if you give me these things. No, I'm saying if you give me this thing, it's over right now. They're much more willing to take that. It's a bird in the hand is worth two in the bush type thing. Yeah. It's every old adage just applied to negotiation.

So that's really what we're doing here. I'm saying, I will give it to you right now. Just do this one thing. We're making this process seemingly more complex than most people normally would, right? They're going, okay, they said it was this salary. Can I have $5,000 more? Yes. Okay, great, the end.

Or no, how about half as much? Great, the end. Is there any problem with the back and forth and the counters? Is there any risk to that causing more problems than it solves? Oh, yeah, totally. So, you know, it's a really interesting one. In negotiations, we want to mitigate the back and forth or stop of it as much as we can because too much going back and forth typically means that you're being jerked around. So very similar to what we talked about a moment ago with helping the other side visualize the whim.

When you think a deal is possible, you're much more willing to bend over backwards. If you think someone is just fishing or they want a price, they can go and, you know, communicate to somebody else to leverage you a better deal with someone else, then you're likely to shut down. And it's the same in job offer scenario. So if someone offers you a job and you come back with a counter and then they give you another counter and then you counter again, there's a point at which you have diminishing returns to scale. So I can continue to ask for other things, but I'm beginning to cost the relationship a lot and I'm getting less and less every single time that I ask.

So it behooves you to make the negotiation end quickly with a favorable outcome because, again, every single time you go back, there is a cost to that. Now, that being said, with job offer negotiations, I say two counters max. is a good zone to be in. Once you do more than two counters, someone gives you an offer, you counter. They come back, you counter again. More than those two counters,

you're beginning to cost the relationship, and it's less and less likely you're going to come to a good place. Now with like business to business deals, sales deals that are more transactional, there can be a lot of back and forth, and it's okay that that can take a lot longer. That makes sense.

Yeah, complex deals, people are ready for that. There are teams of lawyers or founders ready to sit down and hammer something out. They don't expect it to be over in 30 minutes. Yeah. But yeah, the job offer, the job offer two counters max rule makes sense. I even think in certain sales it makes sense because if you're,

you're going to, in theory, work with that person, right? If it's a job offer. Right. And if they counter, you give them something, they counter it again. You're starting to wonder, is this person just always going to be like this? Because I don't want to have all this friction all the time whenever I deal with this guy. Yeah. It's going to be really irritating.

Yeah. And really the secret message that we interpret from that kind of situation, if I'm the person who's being negotiated with is that this person cares more about themselves than they do about me. Now that's okay in doses, but when taken too far again, like you said, it burns through the relationship. You're listening to the Jordan Harbinger Show. We'll be right back.

If you're wondering how I managed to book all these great authors, thinkers, and creators every single week, it's because of my network and I'm teaching you how to build your network for free over at Jordan Harbinger.com slash course. I know that networking is a cringy gross word these days. I wanted to build a course that would help inspire other people to develop a relationship with you. Not a course that does it in a way where it seems salesy, but in a super easy non-cringe down to earthway, nothing awkward, at least nothing

too awkward. And it's built for introverts as well. So it's all online. Don't freak out. I'm not going to ask you to go give talks on stages or go to mixers. It just takes a few minutes a day. And many of the guests on the show already subscribing contribute to the course. So come join us. You'll be in smart company where you belong. You can find the course at Jordan Harbinger.com slash course. And now, back to the show. You mentioned earlier being ready to walk away. How, when do we deploy this? Because I think a lot of people, if we do this wrong, you just ruin everything, right?

If you're just hanging up the phone on people, it's not working out for you. Like, get an offer walk away. Get an off or walk away. Yeah. But, you know, they say there's this kind of like trite, you know, saying with relationships that the person who cares less has all the leverage or something like that. Yeah, sure. I hate that saying.

Yeah, me too. really utilitarian way of looking at relationships. But let's just say that is kind of true in some situations, especially when it comes to negotiations. So if I'm not willing to walk away, then no matter what anyone offers me, I have to take that thing. And God forbid someone on the side of the table finds that out, and they're not going to negotiate with me.

They're going to say, take it or walk away. Right. But then, oh, you can't, so you're just going to take it. They have absolutely zero imperative to give you anything or negotiate with you at all. So unless you are ready to walk away or you're prepared to, not. that you have to or realistically will, but unless you are prepared to or able to, you can't negotiate. So, you know, one of the reasons that I believe that women are, this is going to come back to what I promise this will tie in. One of the reasons I believe women are naturally better negotiators than men because empathy comes more naturally of them is because I learn most of what I know about negotiation for my mom.

My mom is an absolute animal. If you think, like, I'm a tough negotiator, she is like a hundred times worse than I am. She's an absolute animal. So when we were kids, she wanted a car. called the Nizuzu Trooper, which I don't think they make anymore. It's like a little Jeep. Yeah, yeah, it's like a SUV. And she wanted one with this purple, sparkly paint job and a six-disc CD-changer,

which the kids listening in was like what iTunes was or Spotify. I don't even know what iTunes is anymore. What Spotify was like way back in the day with physical CDs, which were these circular things that were shiny that had music on them that you put inside. And you had to open your trunk to change the CDs and the changer. But that was like ball and outrageous in like the 90s. That was like next level stuff. So my mom wanted this Zuzu trooper, and because she knows exactly what she's doing, she went to the dealership at like 5 p.m. on a Friday on like the 31st at like the end of the month.

These guys are like about to close their quota. It's the end of the week. They want to get out of there. And just as they're shutting the door and turning the lights off, she sticks her foot in the door and goes, I want to test drive that car. And the salesman looks and her goes, oh shit, okay, fine, puts his head down, grabs the keys, walks out to the parking lot and we start test driving the car. So she test drives the car for like an hour and a half. Oh my gosh. Yeah, it's like 4 o'clock in the morning at this point.

The guy's like dying. He just wants to get home to his family. He's tired of this shit. And then my mom starts laying into this guy. When he can't take it anymore, it's at the end of the day, he has zero ability to resist. So she starts going, all right, give me a good price. He goes, okay, I can do this. He's like, that's bullshit.

That's not going to do it for me. Let's get serious. Did she talk like that? Oh, my mom curses like a sailor. She makes me look like I'm, you know, Shakespearean. That's great. But she starts laying into the sky. I just putting the screws to him.

My brother and I, of course, little kids, were in the backseat. Probably is some type of negotiating leverage. Yeah. But I'm not willing to admit that to myself. Yeah. So she's in there and she's putting the screws of this guy and just absolutely terrorizing this guy, beating him down and down and down over and over again. Well, that's not going to do it.

What if I pay cash? What will you do this way? And going through all these things. And she gets to within $100 of her price. And the guy just can't do it. He's been beaten down so much that he has no ego left. She's like chewed all of it up and spit it out. left on the side of the road and he just can't do it.

And so we get down with $100 and he goes, I can't make it happen. She goes, all right, fuck you. And she leaves. And so this guy, I can't even imagine like the night he had after that. Probably the whole weekend he had after that ruined his whole weekend. But anyway, so she leaves because she knows if he doesn't give her exactly what she wants, she will find it somewhere else. And none of that, she'll probably find it pretty soon.

So sure enough, she finds the exact same car she's looking for at another dealership. The next week gets the car for the exact price she wants. And then takes the car after getting the keys, drives it back to the first dealership, makes the guy come out with his boss and goes, you could have had this sale. Oh, that's so mean. Yeah. This woman is like next level stuff. She's not even walking on planet Earth. What?

But she's an absolute main thing. But she's right. And the reason that she won there was because she was willing to walk away. She has immense power. And no one has power over because she knows if you don't give it to me, I will get it somewhere else. Imagine the power of internalizing that way of looking at life. she's unstoppable. How did you grow up a nice person?

I'm going to be unpacking the effects of these things for the next 50 years. That's so terrible. No, but it's great that because she raised my brother and I to be very empowered. Because you know what? If we don't get it here, we will get it somewhere else. I love that. Wow. Wow, you definitely, yeah, got to be ready to walk away.

Yeah. I don't know about that whole showing up the next week with the thing you got and rubbing into their face. I don't know. Is that optional? Well, she's like a huge adherent of street justice. She is like judge jury and execute. She's the judge dread of like negotiating. She's dispensing justice on the street wherever she goes.

But she is, you know, some people would say life's too short, let it go. She's like life's too short to let people get away with shit. Yeah. So she makes everybody like pay the price for their transgressions because they need to be taught. I think it's a motherly thing. I think it's like mom I need to teach you. So there's some compassion involved in there. Very much so.

Yeah. I wouldn't be doing this if my kids weren't in the car. Right, right, right. Sure, mom. This is for your own good. This is for your own good. It hurts me more than it hurts. hurts you. Exactly. What about keeping that positive frame of mind? What about staying collaborative? What about staying positive? Yeah. So we referenced this a little bit before with kind of the illusion of control and the late night FM DJ voice, the Chris Voss thing. But, you know, another way to look at this is you want to keep people in a place where they're still willing to collaborate. So there's lots of ways in addition to, you know, keeping people's illusion of control to do this. So one way that my mom does it is she has kind of her Susie cutesy routine, she calls it, where she'll go in and she'll just kind of act.

like she doesn't know what's going on. Like, oh, what is that? Is this bad? Oh, is that good? Like, I don't even know. Like, and she knows exactly what the hell she's doing. But she walks in and acts like she doesn't so that it disarms people. So like, oh, no, like this is what you want, ma'am? She's like, oh, is that good?

And then she lays the screws, puts the screws into people. But, you know, in a more practical sense, many people do this by being friendly with their body language. By seeming, you know, seeming open and collaborative and smiling when they talk, things like that. Body language can go a long way to keeping people disarmed. And, you know, salesman, like we talked to. about before, we'll do this in a way to increase social cost to be negotiating with them, but also to keep me in a positive frame of mind by saying things like, you know, noticing areas where we may have something in common.

I'm wearing a giant shirt. He's a big fan of the Giants. That keeps me in a positive frame of mind by establishing a rapport. Okay, good. So we're smiling when we talk. We want to collaborate. Not in a creepy way, because it's taken too far again. What are you trying to say?

It looks like a serial killer. Not you. Your beautiful smile. I appreciate it. All right. Okay. So do we stay? Is there a place for conference?

confrontational nonverbal communication or like how does how do we calibrate our nonverbals other than our susy cutesy routine and getting that locked in so poker playing i'm a huge fan of body language huge huge fan because you know there's a rule in behavioral psychology and communication science called the 73855 rule and that rule states that 7% of the meaning transmitted to the things we're communicating are the words that we choose what i'm choosing to say to you my vocabulary the the sentence structure things like that uh the the 38% of it comes from my intonation and my inflection. So that's me.

Am I ending every sentence with a question mark? Like I have no idea what I'm talking about? Or am I coming down force to... Yeah, you never talk like that. No, I don't. And not only that, I emphasize specific words inside of a sentence that I want to put focus on. I will emphasize action words. I will come down at the end of a sentence.

I will draw out syllables to bring emphasis to things because I'm communicating conviction when I say these things. Now, I do it implicitly. I'm not necessarily doing it intentionally all the time. But you read that when you hear. When did you learn that? You know, I'm curious. Well, you know, a really interesting thing is if anyone's ever had the opportunity to do this, is I've been extensively media trained.

So if you ever go on the road and you're raising money for a company or something like that, often or you start doing a lot of TV interviews, like you obviously do a lot of this stuff, you'll get media trained where you have someone come in and it'll actually videotape you and they'll ask you questions and they'll play back your responses and like game tape watching an NFL game. They'll like circle things and be like, see, we did this thing. This means this. Don't do that. And by forcing myself to look at what I'm saying on a regular basis, it makes you hyper aware when you're doing things that make it less likely for someone to believe you or betray the point that you're making.

Reduce the sense of communicated conviction. So that's a super helpful way of getting to some of that stuff. Yeah, that's great. So in a negotiation, your body is often communicating for you. So 7% of the meaning of the things that I'm communicating are the words I choose. 38% of it is my inflection. And then 55% of it is your body language, the nonverbal communication cues that you were. were just mentioning.

And so when I'm talking to you, am I closing my body language, meaning am I crossing my arms? Am I protecting my vital organs? There's the fig leaf where sometimes people cross their hands and put it in their lap covering their genitals. That's one of the most frequent things little kids do when they're in trouble. They kind of cover themselves up. There was a woman that I knew years ago who taught, who was a charisma coach, and she focused very

heavily on teaching women how to take up more physical space in boardroom environments because how much physical space you take up communicates the level of confidence. that you have implicitly. So women often when they're sitting, they will cross their legs, they'll put their hands in their lap, and they'll lean forward. That's making themselves as small as they can possibly make themselves. Whereas you look at like a male CEO of a company, his hands are behind his head, his feet are up on the desk.

He's taking up a ludicrous amount of space. It's like, and I hate this term, but man spreading on like public transit. Sure. That's a dominance play in some sense. Right. Yeah. And then you can tell who read about it somewhere and is now doing a lot of it because they are taking up space in a way where they're clearly uncomfortable.

Yeah. Because they're stretched out so far. Yeah, like, this is too much. Yeah, it's too much. Yeah. And, you know, interestingly, I actually, back in the 90s when I lived in the former East Germany, a friend of mine and I were in West Germany on a trip. And he goes, you know, you can always tell East Germans from West Germans, by the way,

they sit. And I said, what? What are you talking about? I'd never heard of nonverbal communication at this point. No. I was 17 years old. And he goes, yeah, look at the. these two guys and they were like really spread out arm across the other chair you know they had

their stuff on another chair they had taken up this whole table of four four chairs with two guys and I said oh okay whatever maybe and then he goes go ask him where they're from and I said well that's going to be weird I can't start a conversation with a stranger he goes do it in English they won't care all right you're right hey where are you guys from Germany yeah we're from Munich have you have you been there you know have you been there and I'm like okay you were right but then he kept doing this and he would see a guy on a train like a tram and the guy would be sitting there with his legs forward his hands in his lap his shoulders forward and just looking straight forward. And he'd go, I bet that guy's from East Germany.

And I went no way. And he goes up and he asks him and he goes, sir, where are you from? And he goes, oh, you know, I'm from Halleer in East Germany. And he goes, yeah. And he just kept doing that. And I thought, this is so interesting because not only is it a gender thing, cultures will teach people to behave in a certain way. So Americans, man spreading is inherently.

a Western thing, not just a guy thing. Our spurs are jangling when we walk in there, right? That's right. You go to Asia, there's not a lot of man spreading going on. There's maybe different things happening, of course. Totally. Totally. And often in body language, it's less important what people are specifically doing.

What we're mentioning here are broad-based cues that are useful to know. But in reality, it's also deviation from the baseline. So people will tell you when you're either developing poker reads on people at a poker table. It's not specific things that they're doing, but it's what things they're doing that are deviations from the norm. Oh, you're doing this thing, but you've never done that before. What does that mean? Something must have changed for you. Paying attention to things like that can be very useful in environment like that.

But in negotiations day to day or in conversations, people are constantly telegraphing their emotions to you. And once you start paying attention to stuff, people are screaming to tell you how they're feeling at any given moment through their eye contact or lack thereof, touching the face, the neck, putting your hands through your hair, closed body language like crossing your arms or covering your vital organs. all these things communicate that I am uncomfortable, that I am maybe lacking confidence in some sense, that I am in a troubled state. Now, some people are always like that because they're naturally very nervous. So again, you have to compare to the baseline.

But a broad-based average, a good thing to pay attention to. Another thing that's really important to call out is a difference between men and women. So when men talk to each other, like when you and I talk to each other, let's say we're at a party, we're never facing each other directly.

Men don't do that because to a man that's like super confrontational, like squared shoulders, direct eye contact, I'm going to fight you. That's what that is. It's a little intense, even if it's a friendly conversation. Yeah. I think highly charismatic people do it a lot, but it's also kind of an intimidation thing. It's a leadership thing.

Yeah, it's a really hard to play. So men notice this next time you walk to a party or a networking event, when men are talking to each other, like Jordan or I, we're sitting diagonal to each other at an angle, both facing out towards the room. Typically, our arms are crossed or holding a drink or something like that. That's like, that's position number one for men talking to each other in public. There are, and not only that, men don't have physical contact between each other when we're talking. I don't talk to Jordan and like stroke him on the arm when I make an important point, but women who are friends with each other will constantly touch each other's hair.

There are friends that I've had dudes for like 30 years that I've never physically touched. It would not occur to me to touch any part of your above the neckline. Exactly. I like pat you on the arm of the back. That's probably the max. Oh, we hug when we see each other. But that's kind of it. And we're really uncomfortable doing it.

We just know we have to. It's just a... Go up and hug it. Give Alex a hug now. Go up and do it. You can do it, Jordan. It's okay. Exactly.

But it's not something that men do frequently. So often this causes friction between the sexes because men talk to women, like men talk to men. And that's a problem because women like direct contact. When they talk to each other, they commonly square shoulders. They get closer than men do when they're talking to each other. They will touch each other. So when men are talking to women, you can't talk to a woman like you talk to a man. you should give her direct contact square shoulders.

I would necessarily recommend you touch people because especially in a work environment, that's super dicey and really risky. Right. Hashtag me too. Right. Well, this is hashtag like violation. Don't do that. Yeah. Hashtag sexual harassment in pretty much any situation.

Exactly. So don't necessarily do that, but do square shoulders. Another thing is that if a woman is talking to a man and you square shoulders of the man, that can be seen as direct confrontation if you volunteer that type of behavior. So for men, many times women are a mirror for all of our insecurity. being judged by a woman is basically the sum total of our existence. Not to be too reductive, but in many ways it is. So when women are very confrontational to men, when they talk to men like they talk to other women,

that can be extremely insecurity producing for men or bringing it out because, again, it feels confrontational to us. So I see this commonly. There's a lot of disconnects between the genders. So in negotiations, in interpersonal communication, you need to pay very close attention to how other people are reacting to the things that you're saying. are they shutting down? Are they touching their face or neck or hair when you're talking to them? And then modulate your approach accordingly. Step it back, maybe. We've talked about a lot of poker mindsets, poker mentalities that come into play with negotiation. Is there anything else from that game that falls into the negotiation realm?

Oh, yeah, so many things. But one of the most important things I learned from playing a lot of poker is that, especially if you play tournament play, is that if you treat each hand as a life and death situation as a really important event in and of itself, you're going to burn. yourself out in a matter of minutes and you're going to make a lot of shitty decisions because you're emotionally compromising yourself continuously as you play the game. In poker, you have to adopt the mindset that if I lose a hand, it doesn't really matter, especially if you play the hand correctly. Then you can't feel bad about it at all. Because in the long run, the better poker player will win more than they will lose. In like an average game between a very junior poker player and a professional, the junior poker player has almost a coin flip chance at winning any individual hand, but exploded out over thousands or tens of thousands of hand, the poker player has a

very slight edge, but gets magnified to an extreme difference in outcomes between the amateur and the professional because they adopt this mentality, again, that each hand doesn't kill me. Each hand is just another hand. There's another hand after it. So we have to make sure that we don't fall in the quicksand, and that's true with negotiations. If I negotiate for a job offer and I don't get exactly what I want and I don't end up taking that job, don't feel bad that it didn't work out. Feel good that you negotiate it, feel good that you took the shot and walk away into your next opportunity to negotiate, feeling like you're doing the right thing, as opposed to building up all these mental barriers for why I don't want to do this again. So again, adopt that poker mindset that

no matter what the outcome of a negotiation is, the fact that I did it was the right thing. So let's focus for a minute on the job offer, right? We've done, and yes, I am eating banana. If you're watching this on YouTube, it's been a long show. It's been a long day. It's a prop banana. It's intentional. So it's all going to tie into the point that we're talking about a minute. You killed it. You got the job. Right.

You're trying to negotiate your salary. You know, like you said, you shook hands. You kissed babies. Dubs are flying. People are crying. Yeah. The offer comes. Yeah.

So what we're about to walk through is a very typical job offer scenario, job negotiation scenario. The truth is that there's very little variation in what happens with people's job offer negotiations. There's some things that happen, but from like a macro perspective, it's a pretty predictable series of things that happen. And so what you see here is kind of a compendium or average view of a couple hundred different job negotiations that I've either directly done or helped advise on behalf of friends or students or things like that. So what I want to walk through here is kind of step by step what happens. What do you do in an optimal scenario? And then tie in a bunch of the things that we've talked through today, those kind of more theory and functional specific acts that we brought up and see how they're applied in this situation. Okay.

So the first offer comes in, which is always the what quiz time? The FU price. The FU price, exactly. I'm so smart. We did not take that twice just so that I would be right. Definitely not. It was incredibly smooth and seamless. So the first offer is always the FU price, right?

So that's my personal rationalization for how to make myself feel comfortable negotiating for the things that I want no matter what. So the first offer comes in. And the important thing is before the first offer comes in, before I even see what I'm up against, I've already made the decision that no matter what comes in, I am going to negotiate. I've accepted as a foregone conclusion that I'm going to negotiate this offer. Now, that's really, really important because I get a lot of people to come to me and they're like, hey, should I negotiate this job offer? Can you take a look at it? I'm like, I don't need to take a look at it.

The answer is yes. You're going to negotiate this job offer. You always negotiate. It doesn't matter what it is. Anyone gives you an offer, just assume you will. So when that point comes up, you don't have to make the call. Because again, like we talked about before, when you're under duress, when the spotlight is on you, you're going to make suboptimal decisions because of a million other factors. Maybe in the offer letter, they say, and we're offering you with the top of our range. So you read that and you're like, well, I don't know. That's the top of their range. Maybe I'm not going to negotiate. No. That's a thing people say, you still negotiate. It doesn't matter. So the offer comes in too high, too low, just right, no matter what you negotiate. So once that

negotiation begins, let's just say, let's say the offer comes in. Let's deconstruct what that offer typically looks like. Typically, the offer has a couple key components. There's a lot of social nicety in there, things like, we're really excited, we really want you to join. This has been such an important position, blah, blah, blah, blah, blah, blah. But in like those CIA movies where they redact, like classified information from a document, like the black marker, they go through and they cross everything out except for like five words, we're going to do that here. So with your offer letter, cross a bunch of stuff out. The only things that matter are the position that you're getting offered in the title, the base salary, plus any other material terms like the common stock you're

being offered, a stock options or package, if your company does that, start date, things like that. Nothing else matters. Everything else other than those key material terms or a distraction that are meant to make you less likely to negotiate. Like we talked about before, increase the social cost for you asking for what you want. So all of that, we're excited to have you on board, looking forward to taking you around the campus, what size T-shirt do you wear. Right. We're going to order your laptop immediately. All that stuff. Is that a real one?

Oh, sure, all the time. People do things like that constantly. We're going to just send you some documents even in advance of giving you an offer so you can review them to be ready. for your first day. Again, it's not always malevolence. The co-founder of my company, he and I have famous arguments about this constantly. He always assumes incompetence before malevolence. He keeps saying that he's like, I just assume people are incompetent. I'm on the exact opposite side of the spectrum. I always assume malevolence before incompetence. Not that's necessarily the right thing, but it helps me plan for a worst case scenario. That's good. In fact,

I wish I'd done that in previous dealings as well. Yeah, yeah, yeah. So anyway, the first offer comes in, And let's, after we redact all that social nicety, all the other bullshit out of it, really what the offer is, what it comes down to is it's what they think they can get you for. They're pricing you. But it's not their best, it's not your best case scenario. In most cases, it's the best reasonable case scenario for them. In job offer scenarios, often the first offer is in the low to middle allowable budget. So imagine if there's a budget and you divide it up into four quartiles. The first offer is almost always in the first or second quartile.

It's always in the low to middle of the allowable budget. So there's almost always flexibility. So the key thing to walk away with here is the first offer is almost never the only case scenario. It is just the best reasonable case scenario for them, not for you. That makes sense. Okay. So it's in the low to middle of allowable budget. It's their, it's kind of what they are really hoping that you're going to take.

Yeah. And in the hundreds of times that I've taught this, often some of my most frequent students are people who are HR management. who are actually the folks that are extending offers of folks. And I always ask them with everything in this deck, is that right? Is that how it is for you guys? And every single time, like, yeah, that's pretty much what we do. It's in the low to middle of the Albor. Wow.

So there's a lot, again, this stuff has been smoke tested quite heavily with people to do this. So the first offer comes in. We kind of isolated out the parts that are important. We recognize what the first offer is. We've already decided we're going to negotiate no matter what. Right. Even if they give you twice what you want, what you thought you wanted, negotiate anyway. Otherwise, you're leaving money on the table.

Exactly. Okay. And then remember how we said before, whenever you're given an offer, don't react to the offer immediately, create some times so you can actually think about it. That's really what we're going to do here amongst some other things. So the first response that you send is not a direct response to the offer. It's a response to the notion of an offer. So let's walk through it. Yeah.

So I'm going to read a typical response. It's very short that I would give to a first job offer. Bob, I appreciate the consideration. The offer is whom the guy's name is Bob. Sure. I truly enjoyed our conversation and feel great about the team and the company. I need to evaluate this based on other options. opportunities I am looking at, I will get back to you shortly. As I'm doing that, it'd be helpful

to know if there's any flexibility in the terms or the base or whatever thing I want to negotiate. And then I'd say, I look forward to your response and then just sign with my name. So now, what are we doing here? This is a very simple, quick email. It's like four sentences, but there's a lot of very complex machinery happening here. So first, always start with a first name. I get a lot of kids that are straight at a college who've never been in a professional environment. Dear Mr. Harbinger. Dear Mr. Harbinger, exactly. But when you do that, you are indicating a sense of value hierarchy.

You're putting them at a different level than you are. So in these situations, you want to talk to them as though they're peer. I would say the only caveat to that should be if you are talking to someone that has a more senior title like a doctorate or a legal title by which they go, like a J.D. Or whatever, something like that. I would address them by however they address themselves on LinkedIn. That's the rule that I typically use. I live in California in San Francisco in particular, which is super hippie, egalitarian bullshit. And I've actually been bitten by that in the past.

I met with a woman who had a doctorate in cryptography as a company I was starting with a company I was starting years ago. And I addressed her by her first name. And she got very upset. She's like, I addressed me as doctor so-and-so. I think I've earned that title. And I'm like, shit, you are 100% right. I'm sorry. I've been living in California too long.

So again, I use LinkedIn as a reference. So the first part of that email, as you mentioned before, I appreciate the consideration. The offer, I'm really excited. I'm just reiterating my passion and I'm setting the tone. There's this guy that I met years ago. He was the head of retail consulting for this major strategy consulting company. And I asked him retail consulting, like selling shit, right? Yeah.

And like, okay, like what are your thoughts on retail? Like, what's your overarching strategy? How do you look at it? How do you evaluate a retail store? And he goes, well, he's like, when you walk into a store, there's 10 things that you expect to see. When you see those 10 things, you don't even notice. Like, I expect there to be lighting and clothes and a place to pay and a place to change.

Someone to ask questions for. I don't walk into a store and go, oh, gee, isn't it nice? They have lighting. How wonderful. That shit doesn't happen. Yeah, that never happens. No. But when one of those things is missing, I get super pissed off.

This reiterating the passion and setting the tone for the email is one of those 10 things. When it's there, it's not going to determine the outcome of the negotiation, but when it isn't, it can piss people off. So make sure that you show them that respect, have those 10 things there. So these examples with these highlights will be in the worksheet. So if you're like, wait, what do we have to have in there? Well, you'll find that in the show notes. Exactly. So the next part of the email, and this is where the real meat of it comes in, it's really only two sentences.

The whole strategy I have here is broken down to two sentences. The first is I need to evaluate this based on other opportunities I'm looking at, and I'll get back to you shortly. What am I doing there? I am creating or displaying social proof and market validation. Social proof is like Yelp. Yelp is an app built on this concept in behavioral psychics. psychology of social proofing that I look to other people to validate whether or not something is good. If, you know, 5,000 people said this Chinese food restaurant has great general toast chicken.

I believe they have great general toast chicken and I'm going to go there and eat that food. So I'm doing that here. Chow, by the way. Chow, oh, I'm so sorry. That's right. It's not way more worldly than that. It's not a real Chinese dish. So you can say it so.

It's just. Wasn't it invented for Americans like me that don't know how to pronounce things? It was, which is weird why they would put TSO, which is something clearly no one knows how to actually say. Well, you learned it here. If you take away nothing else from this podcast, it's General Chiaz Chicken. Right, General Tiao. And it's not really Chinese. Yeah.

Right, exactly. So anyway, the point of saying I'm evaluating this based on other opportunities I'm looking at is me displaying that social proof. They will assume that there are other job opportunities that I'm considering. I'm using market validation as another way to say that. They will assume that there's other things that I'm looking at that means I'm sought after by the market and I'm more valuable. And you have good Yelp reviews. And I have good Yelp reviews. Exactly.

And I make great chicken. The second part of this email, the second sentence in this paragraph and the whole purpose of this email is as I'm doing that, it would be helpful to know if there's any flexibility in the terms. Now, what I'm doing here is asking a very simple question. I'm not actually asking for anything. I'm just asking if there's any flexibility. Now, remember we talked before about making the other side reactive? That's what I'm doing here. I'm changing the pace of the negotiation.

I'm painting them into a corner because what are their outcomes now? Let's game through the situation now. They can say yes or they can say no or they can say some variant of each one of them. If they say yes, then they're inviting me and asking me for my counter. Yes. Which is huge. Now they're making me reactive. So again, we've changed the perceived leverage in the conversation.

They could say no, which very rarely happens because that's going to sound super unreasonable. Right. What do you mean there's no flexibility at all? This is a job offer scenario. This is a conversation. Everybody negotiates jobs. I'm guessing that they would say something like, well, what did you have in mind? Exactly.

Right. So typically the response is somebody in the effect of, we think this is a really fair offer, but what would you? We're open to your expectations. Yeah. Exactly. So at that point, they're asking you for your counter. And that's really the magic of this email and the whole purpose for sending it. Because then once you send it, you get their initial response, like what we just said, and you see what you're talking to.

Typically, it's some variant of we think this is a really fair offer. But, and then you come back with your response. So this is a basic, another email here. Again, only a couple sentences. Bob, I appreciate the consideration of the offer. I'm very excited about the team, the product, and the direction of the company. I know I can make a big impact on the organization based on our organization. based on other opportunities I'm looking at,

I feel X is a fair number for what I can bring to this role. If you can match that, I'm ready to sign today and we'll give my notice tomorrow. Look forward to your response. So what's happening here? So let's unpack it a little bit as well. Okay. We use the first name.

First name. We have the nice little cultural courtesy. I appreciate the consideration of the offer. The check. And then I'm very excited about the team, the product, the direction of the company. I know I can make a big impact on the organization. Sounds like you're saying,

not only that you're interested in it, but that you realize you have some value to offer? Yep, absolutely. It's just a powerful thing to say. And then comes the really important part. And again, these two sentences are the entire strategy behind this negotiation. First is, based on other opportunities I'm looking at, I feel X is a fair number of what I can bring to the role. What we're doing here is we're displaying, again, social proof and market validation. Not based on other offers I have, based on other opportunities I'm looking at.

You can also say, based on the market rate, if you don't want to use opportunities. although I would say opportunities is the stronger play. I'm looking at, I feel X is a fair number. Now, again, social proof and market validation. I'm not saying I would like this, I want this, this would make me happy. I'm saying based on other opportunities I'm looking at, X is a fair number for what I can bring to this position. You're listening to the Jordan Harbinger show. We'll be right back.

If you like this episode of the show, I invite you to do what other smart and considerate listeners do, which is take a moment and support our amazing sponsors. All of the deals, discount codes are all in one. place Jordan Harbinger.com slash deals is where you can find them. You can also use the AI chatbot to find deals and promo codes. Just go to Jordan Harbinger.com, use the AI chat bot and ask it for the promo code and, well, hopefully we'll come up with our promo code. Thank you so much for supporting those who support us. And now, back to the show. Yeah, that difference, that subtle difference makes sense, right? Because it's not that you're unhappy with it. It's that, look, I have other

evidence, concrete evidence that I'm worth more than what you would offer. And the real war of this, the battle of this is fought in the subtlety. It's not big, wide-ranging things that change the outcome of negotiations. It's small little things like this. Now, if this kind of stuff doesn't come naturally to you, use the script that we're providing you here. This is a great place to start. Or write the email yourself and then have other people read it.

Don't introduce it to them. Just say, how does this come off? What's the tone here? What do you expect? Some people, this kind of thing comes naturally to. Many of us, it doesn't. And if it doesn't, don't be afraid to ask other people what their opinion is. Very cool.

So what is the X in this case? Is it 12% or something? Am I imagining that? Yeah, no, that's right. So typically I recommend people counter with 12 to 15% when using this strategy because that's inside of that allowable budget. Remember, again, if they're in the low to middle of their allowable range, 12 to 15% puts you right at the top of that range, almost all the time.

Okay. Now, I will say as a caveat, some of this changes. if you're negotiating a very senior position, like a C level or VP level or senior director position. And that situation, you may have more flexibility because those positions tend to be more harder to hire for. Sure, sure. Yeah, you hear stories all the time. Like, well, I was working at MIT, and then I had dinner with Mark Zuckerberg, and he handed me an offer that was 10 times what I'm currently making. Right.

So I took the job. Yeah. And you're like, okay, well, if you're going from government or academia to tech. Rocket ship startup. Yeah, rocket ship startup. then this is going to be different. And also, if you're in that situation, what would you recommend? What if someone is negotiating C-suite stuff?

Not how would they do it, but are there coaches they can hire for this? It seems like there should be, that's a professional's job. Hey, I need an executive compensation package negotiated with Oracle. Yeah, I mean, some people use employment lawyers. In some cases, their personal lawyers can help them navigate if they're really complex agreements. But the truth is, it ends up being people that get to that level typically have been around the block enough to know generally, what they're looking for. So they have a better sense of context. Again, if you're right at a college,

it's harder to establish that context. So these rules of thumb are very useful for most situations. Yeah. But for the very senior ones as well, often it's salary, but it's also stock or equity, control terms, board seat, all kinds of things. Sure. Okay. And then last but not least, you said in the example, if you can match that, I'm ready to sign today and I will give my notice tomorrow. Yeah. What are we, what's going on there? So that's such a power place. So remember we talk before about helping people visualize the win. If the car salesman knows that he's going to get a deal that day, he's more likely to give you what you want or what you're asking for.

That's exactly what we're doing here. I am, and this is the most important part of this email, the social proofing and the number that you're giving, you just need to do that. That's got to be there. But the most important part, tactically, is this part. If you can match that, I'm ready to sign my day today and we'll give my notice tomorrow. This presents a slam dunk on a silver platter, if it's even possible to do those two things, to the HR rep on the other side of the phone.

That means, again, remember, they want the negotiation to end. Put yourself in their position, right? So let's say you interviewed with five or six people on the team. At $180 or $200 an hour total cost for an employee's time, not to mention the opportunity cost of them not working on other things that would be valuable to the company. They've invested a lot of money in giving you this offer. The entire team signed off on you.

The manager who probably outranks this HR person gave you the go-ahead. and now they hand it off to this person to get you in the door. That's a high pressure situation for that HR rep because now it's up to them to screw this up or bring you in the door. They're really in kind of almost like a no-win scenario here. It's a really tough spot from there being. So this is where the empathy comes in again. Imagine yourself on their side of the table. So if you can say, you know what, I'm in the door tomorrow and happy for this number if you do this thing, they will be willing to pay more because they see that end really close.

Yeah, I think also just from my perspective, having done it. a bunch of negotiation with advertisers and things like that, saying if we can do this, I'll sign right now and we'll get going. That lets me know that, or me letting them know, I'm not going to then pull some other thing out of the sky that you then have to contend with. I'm not going to go, thanks, good. Now that we're there, I want this other thing. And oh, now there's this, it's going to, it's done.

Yeah. I'm done. This is the thing that I want. There's not going to be 10 other things. This isn't going to take three more weeks. Yep. It could be over by 5 p.m. if you get back to me today.

And again, bird in the hand worth two in the bush. That's exactly what's happening here. All that a lot of the things that we're talking about today kind of in this go-through here is that it's a lot of wisdom that your grandfather, your great-grandmother would know that we're just applying here very tactically for a specific purpose. But these are not groundbreaking concepts. They're just applied to this situation. Right. Okay. Great.

Yeah. And then basically I look forward to your response. Power close that email. Send it off. Now, the vast majority of the time that I've seen this employed roughly 70 to 78. percent of the time, the job offer is done at that point. They say yes, and it's over. There are rare situations, kind of in that 20 to 30 percent or so, well, they'll come back and say, well, we can't do that, but we can counter with this. It tends to be less than what you asked. Often when you ask,

let's just say you ask for a 10K increase, they'll come back with 5K or 7K. They typically come back with half or in some cases less than half of what you requested if they're going to counter. And be prepared for that. That's always very possible. It's unlikely in situations like this. Again, if you are over-optimizing for ending the negotiation quickly. But then you have the opportunity to counter one more time, and then you enter what we talked about before, the danger zone, where you're beginning to test the relationship. There are situations where you can negotiate multiple times past that.

It's easier to do that at a senior level, but at most levels, you're beginning to kind of test the social fabric a little bit too much. So then after your last counter, they give you response. I would say you either accept or you walk away in the vast majority of cases. Great. Okay. So to review some of these major problems, points. And again, this will be in the worksheets for this episode and the show notes. Never make the first offer. Always be thankful, gracious, et cetera. Setting a positive and is passionate tone for the negotiation. Absolutely. That's right. Displaying the market validation, the social proof to make sure that they know you're in demand. You know, you're not just relying on them. Set your ask. Help them visualize the win, aka happy Friday we hired him. And then reiterate interest, close strong. Make it rain.

Couldn't set it better myself. Right. Just a couple of things to qualify here. So there are different types of negotiations, but I use a job offer scenario because it's most common to all of us. Sure. But all the things that Jordan just mentioned, you can use in every single one of your negotiations, the social proof, the market validation, right?

I mean, the visualizing the win, the setting to ask, all these things are core concepts that, again, work in every kind of negotiation applied to a job offer scenario. Now, for more complex things like business-to-business deals, basically go to negotiation tenants and rules still apply, but there's a couple key differences. The back and forth can be endless. The amount of pre-work that you have to do is significantly higher than it would be for a job offer scenario. BD or business development has very different metrics by which the people that you're talking

to are being evaluated. In a job offer scenario, the HR rep, it's either gets you in the door or doesn't get you in the door at a rate that's inside budget or outside budget. It's a very small bounded number of things. And again, business development, kind of business-to-business deal side of things, it's much more complex. There's a lot more back and forth. deals can take eight months years to close depending on the complexity of the industry that you're in.

And there's a lot more options, just way more things to negotiate. But again, same basic negotiation tenants still apply. I remember a while ago you told me that you negotiated a mattress? Sounds really exciting. Yeah. I know you bought cars, motorcycles, but the mattress was by far your favorite. Oh, yeah. Oh, mattresses are the best.

In my opinion, that's like the in the day-to-day trenches, like the Olympics of negotiating. because the deck is so stacked in your favor for negotiating situation. Really? For mattresses? Yeah, for mattresses. So no one really knows this, but the entire mattress industry, and there's a reason it's being disrupted right now by companies like Casper and others, is an entire industry built to fuck you, basically.

You walk into these stores, and they all sell basically the same products. In many cases, the exact same product, but they will call them different things, give them different serial numbers, different brand names, different tags, colors, everything, just to make it harder for you. if you could compare it and shop offers around. They also do a lot of kind of schlocky sales stuff. Like, there'll always be balloons outside of a mattress store. Notice this when you're driving past one next.

It's always like some crazy time in the month where there's always a rebate. They try every trick in the book from a sales perspective to get you to buy. And the other best part about it is that the vast majority people that I've talked to don't negotiate mattresses. They don't even know that they can. But these are products that have, and I'm not exaggerating, hundreds of percent markup on top of the wholesale cost that the should be. I met a guy who was a mattress manufacturer. He was probably one of the richest guys I've ever met in my life. Yeah.

It's absolutely insane. It is a pure margin business, which makes it super fun to negotiate. So I'll walk through an actual example of this. So I bought my girlfriend a mattress recently. And we went through and found an area. And for some reason, everything is always like this. But all the mattress stores cluster themselves around each other. So if you find like one mattress store, there's like six within like a five mile radius.

But for some reason, they're always in the same general place. That's so strange. Yeah, I don't know why. But if you're in San Francisco, Van S Street here, Van S Avenue, is basically exactly that. There's about five mattress stores within like a couple blocks of each other. So anyway, she and I go to the first place and she lays down on a bed. We go around, look at different ones. She's like, okay, find the one you want.

She finds the one she likes. Mattress guy comes over. He leads into his whole schlucky sales routine. Oh, what a beautiful couple. Oh, my God. You guys are going to have the most beautiful kids. I'm like, won't you cut that bullshit with it. Yeah, yeah.

We're going to be doing it on this mattress. That's right. He's like, he looks so beautiful. He's like, oh, you guys like this. He would try and find shared interest. He tries to humanize himself. Oh, you guys lived out here. You lived together.

Nope. What's going to happen? I can tell. I can feel real love. Like the whole just bullshit line. And so she finds the one she likes. And the first matter she looks at that she seriously likes is $1,800. I'm like, wow.

That's expensive. Those are some expensive kids. Yeah, some expensive materials there. So, okay, fine. The first thing I do immediately, and everybody should do this, Go to Google. Go to Google and just Google the price of that mattress because every mattress place, for the most part, in addition to places like Best Buy, they all do price matching. So if you can find a publicly advertised price, they'll immediately match that price.

So if you're uncomfortable negotiating, you don't want to do it, just show them to hold up the phone and be like, it's $1,500 over here. And so they'll immediately match that price. So that's the first thing I do. So we started $1,800 and I immediately find it online for $1,200. And I'm like, well, will you guys match this price? He goes, oh, I don't know. let me talk to my manager and goes to the whole schlucky thing, goes in the back room. He's probably playing Gallagher or like ping pong or smoking a cigarette or something like that, drinking a beer, comes back out after an appropriately, appropriate amount of time to like make me believe that he really considered. He goes, well, you know, my manager didn't like it, but okay, we're going to do it.

I'm like, that's not even close. But if you get, if you reach our price, we're going to buy today, right, visualize the win. And he goes, all right, right, right, right. I'm like, what can you do? It's, all right, right, break my balls, break my balls. Okay, all right, fine. $1,100. And I'm like, not even close.

and I'm like, will you throw in a box spring with that? Okay, fine, what about a bed frame? Okay, fine. She doesn't need either of these things, but he'll throw it in. All right, what about free delivery? Okay, fine, you're breaking my balls, fine. And I'm like, yeah, $1,100's just not going to do it. Will you do that minus 10%?

Well, what if I pay cash? Well, I don't know. I don't know how I feel about this. I'm going to walk out and I'm going to find it somewhere else. Okay, hold on a second. So after all this is beating this guy back, like my mom did with the Zuzu Trooper, I get him down to $1,050. All right.

So we started at 1800. These are real numbers. now we're at 1050. And I go, you know what? Fuck you. I'm out of here. And I leave. And I go to the next place.

I hope you don't really say that. No, no, no. I was very polite. Thank you, sir. I appreciate it. Right. I mean, obviously, in my mind, fudge. Yeah.

Right. So anyway, we go to the next place and I find the exact same mattress. I had to Google it because it's a different brand name and a different serial number. And we go over and it's $1,800. I'm like, listen, I just came from a place and they're going to do this for $10. You got to beat that. And I go through the same rigamor roll with the other guy. will you do that minus 10%.

What if I pay cash? I'm going to buy this today. You've got to do better. Give us a deeper re-blah, blah, blah, get them all the way down to $8.50. We started at $1,800. Jeez, you're already... I get this guy down to $8.50.

$1,000 plus a free box spraying and delivery. Exactly. With that, it's over $1,000. But I'm $9.50 down from where I started. And I go, you know what? That's not going to do it. And I walk out and go to the next place. So I go to the third place and we find the same mattress.

And I go, listen, guys, I just got this exact same mattress down to $850 in other place. You're going to beat that price. I'll buy here today. So we do the whole thing with them. We do that minus 10%, same thing. At this point, my girlfriend can't even look at me. She's so embarrassed to be around me. She goes off in the bathroom, and I'm, like, putting the screws of this guy, just like my mom did.

And I eventually get this guy down to, like, $750. And then I call down, I call the place that I just came from before, and I put him on speakerphone in front of this other guy, which point, my girlfriend completely disowns me and leaves. She's like, I'll pick you up after you that. Exactly. And she's driving down 101 starting a life in a new city. And I'm like, listen. I'm over at this place now. You gave me the price $8.50 before.

I've already got this guy down to $750. Whoever, which one of you beats that right now, I'm going to buy the mattress right now, cash. They're on speaker phone. They're on speaker phone. These guys can't even believe it. And I actually kind of feel bad for them as well. Yeah, yeah. They're like, I never wanted to work here in the first place.

Yeah. Yeah. So anyway, we get the exact mattress you wanted that place for $700. Out the door, we're done, including tax and everything. Wow. So we basically saved $1,100 just by going through the same basic tactics at every single place. So when you're in these situations, What'd you do with the box spring and the bed frames you didn't need?

Yeah, so we ended up using them, but in past, I've sold them. Like, I've done it for myself, for my brother. We sell them. We don't need them. So you just knock it down even further. But so we'll put these in kind of the show notes, so you can put it up later. But, you know, we say things like, there's a script of things you can read. And in my students in my class, you know, you don't have to love the brawl this as much as I do.

I'm taking, like, sick pleasure when I'm doing this. Yeah, you're clearly, the speakerphone thing was like, okay, all right, come on. Yeah, they're like, they're dying and I'm loving it. And I'm, like, feeding on it. I'm like, ah, yes, more strength. This is fantastic. But most people don't feel that way. Most people hate it.

Mom would be so proud. She would. Well, she'd be ashamed because she would have done it for $6.50. Yeah. But, yeah, my mom didn't raise any cissies. But anyway, the point is, in my class, I give people just a list of things to say. And this will be in the show notes. But what's your best out-the-door price?

Will you do that minus 10 percent? If you reach my price, I'll buy today. I'm on the phone with X and they have it advertised at this. Will you match it? If I buy here, would you throw in this? There's a good guy discount, which is a good guy discount, which is something I know I learned from you years ago. Really?

The good guy discount. Yeah, that's right. I hadn't heard that one before you. The good guy discounts. Or like the local discount too. Yeah, that's right. That's right. But the whole point is you don't have to be tactically a genius in negotiations.

Just try saying some of these things out. So print them out, put them on your phone, and just try reading them off. And students of mine who've been really uncomfortable negotiating the past have done this and just gone on and said these things. And they come back and they go, I just saved 800 bucks. I'm like, I know. It's so easy. Just ask. Yeah.

That's great. I mean, if, again, all the way back to like that rationalization, if I can rationalize myself asking for the things I want, the tactics in cases like this are super, super simple. So just try them out. See what happens. Yeah, I guess that whole margin on something like a mattress, motorcycle, belongs to, in part the salesman and the rest probably to the dealership. So he's playing in part with house money, but also really wants to make the sale.

And knows that you have options and hopes that you don't realize that. Exactly, yeah. And again, if these people, and this is one reason I never feel bad about situations like this, if they sell me a mattress or anything, they are making money on the deal. No matter what they say. They don't sell things at a loss. They're not doing things for a favor. If they sell it to you, they're making money off it, no matter what they say. So again, all the way back to what we talked about before, you have a fiduciary responsibility to maximize your personal value in situations like this. Either you're going to get taken or they are. You're going to get a good deal or they are. and you need to protect yourself in your own self-interest. So find your rationalization that helps you do that, whether it's every price is a fudge you price, thinking about foregone revenue, thinking about what Beyonce would do or somebody else,

get yourself over that hump, then just try some of these things and you'll be amazed how it works. Thank you so much. This is truly a master class in negotiation, and we're going to do some advanced stuff soon enough. Yeah, we're going to get into the deep psychology of things. because what we talked about today are all the tactics of specifically how you negotiate. But the truth is most people don't even get to a place where they can adequately employ these tactics

because there's so many things that stop them from getting to a place where they can try that. So in another show, a whole other conversation, we'll deeply examine kind of the psychological aspects of negotiations and how we can fight those impulses that stop us for from asking for the things that we want. Perfect. Thank you very much, Alex. Thanks, man.

Great big thank you to Alex Kutz. If you enjoyed this one, don't forget to thank you. him on Twitter, tweet at me your number one takeaway as well. I'm at Jordan Harbinger on both Twitter and Instagram. Part 3 coming next week, part one already aired. Hopefully you heard that before you heard this one. If not, go back and listen to that one as well. Don't forget, if you want to learn how to apply everything you just heard from Alex, make sure you go grab the worksheets, also in the show notes at Jordan Harbinger.com slash podcast. And of course, check out six-minute networking. It is replacing Level 1 if you were in that. This is the course that will change your life.

It is free. There's no credit card up front. There's no upsell. All I want to do is teach people how I've created an amazing network in my personal life and in my business life. This has been a game changer for the business. It's been a game changer for me personally. Jim Rohn said you only go as high as your five closest friends. Or you're the average of the people you spend the most time with.

The way you level that up is through your network. And I'm teaching you that for free at six-minute networking. And you can find that at Jordan Harbinger.com slash course. That's Jordan Harbinger.com slash course. This episode was produced and edited by Jason DeFilippo. Show notes are by Robert Fogarty. Booking, Back Office, and Last Minute Miracles by Jen Harbinger. And I'm your host, Jordan Harbinger.

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