negotiating

Come fly with me

Life is one long negotiation.

You are a highly experienced negotiator. You negotiate at home with your spouse, at work with your colleagues and in shops with sales assistants – and you do it every day.

The goal of most negotiations is to obtain something you want. But how you achieve this depends on the strategy you choose to employ. You could hold out for your best offer…or you could pretend to hold out, but be ready to compromise in the end…or maybe attack the other side and try to prove that they’re wrong and you’re right…or maybe you simply try to be as reasonable and fair as possible.

Finding the right strategy can be crucial to the success of the negotiation. And as the true story that follows shows, everyday situations can teach us a lot about simple negotiating techniques.

The Nibble

Columbia University professor Adam Galinsky was waiting to board a flight when he heard the following announcement: “We are overbooked and are looking for volunteers who can fly tomorrow instead of today.” Initially the airline offered a $200 voucher to anyone willing to postpone their flight to the next day. Adam was not tempted by this initial offer as it was not particularly convenient for him to change his travel plans. As no volunteers appeared, however, the airline increased the offer to $350 (tempting to Adam, but not tempting enough), and finally $500. As Adam did not have a lot of money, this was an offer that really got his attention – especially as he had only paid around $200 for his original ticket!

Most people in Adam’s shoes would simply have accepted the voucher and flown the next day, but as a professor of business Adam realized he was in a negotiation with the airline. So he went up to the counter and said: “If I take your offer, will you put me in first class tomorrow?” And the airline said, “sure, we can do that”. Adam now had a $500 voucher plus an upgrade to first class. Next, Adam asked for a hotel room for the night…“sure, we can manage that too”, said the airline. Now he had a voucher, a first class seat and a hotel. But Adam wasn’t finished yet. “OK, I’m going to need to eat tonight, will you pay for that too? And a friend was going to pick me up this evening but he’s not free tomorrow, so can you organize a car service to take me home?” The airline agreed to everything.

This technique is called ‘the nibble’. You reach a general agreement and then ask the other side to throw in something small. In this case, these were things the airline did not care that much about. The airline probably had spare first class seats and an agreement in place with hotels and limousine services. Ten passengers accepted the airline’s offer of a $500 voucher that day, but Adam was the only one to receive the extras. The moral of the story: Always be negotiating. Even if you think you‘ve got a deal, you can often get more.