Here's how a former FBI hostage negotiator says small business owners should strike deals throughout

that was uh yes very indicative of 2020 but chris i have to say i've been really really looking forward to the session i am thrilled it looks like our audience is excited too that was just a little bit of suspense right we had to do it to make sure everyone was listening so uh chris thank you good afternoon how are you doing i'm doing great i mean these are all first world problems um i don't have anything that's a serious problem to deal with and i get a look at you right now what else could i ask there we go we've somehow sorted it all out great group work everyone by the way so let's dig into some actual problems um i am absolutely thrilled to be talking to you and that i get to do this session i feel that it's certainly an honor um negotiation tactics are needed in everyday life but particularly now amid the pandemic for small business owners when they have to have a lot of scary negotiations maybe they shouldn't be scary you tell us that but negotiating rent with creditors um landlords suppliers etc start us off by just saying what do you think is unique about this moment what do you need to keep in mind when you're negotiating amid a pandemic when everything is just so uncertain yeah well i like action so you know i hate inaction i hate inertia and what the pandemic is doing to us now is it's requiring us to make decisions it's requiring us to move forward um if we if we move forward with it we can move forward in some great places we can think about who we really want to be in relationships with business partnerships i mean who's really good for us you know there's some tough decisions to make but think about who you want to be with on the other side of the pandemic and those are the people you want to collaborate with now question two how do you prioritize that particularly when there are so many things maybe in a typical environment you're negotiating one or two key things but everything is thrown into question where do you even start yeah well and that's a great question because everything is being renegotiated now i mean literally there isn't if you if somebody that you're doing business with hasn't called you yet to renegotiate they're going to so the first question after you start thinking about how you know how productive is the collaboration been with my this person so far this business partner my landlord do i like living here uh do i want have they treated me well um and then just have a sense for that that's not gonna be make up your mind essentially but then when you talk with them when they talk with you you don't get a feel for are they renegotiate with you because they can because they have to or is it a combination of the two but it's going to be largely either they have to or they can't now the person who's renegotiating with you because they can because now this is an opportunity look don't ban with those people they don't have your interests in mind um because they're picking on you because the environment's giving them a chance to do so now how do you figure that out you know on the negotiation skills my company teaches the black swan method first of is just sort of like hearing it out what's your gut instinct telling you um your gut instinct might be telling you from their approach that they're not under a lot of pressure how do you handle that you say sounds like you're not backed into a corner right now it's interesting how if you feed back to somebody about what they're not feeling what you're guessing they're not feeling instead of what they are you get a different response sounds like you're not up against a wall either going to say oh yeah no no we are or they're going to say yeah no not that bad so it's a sort of reverse way to get some good information out of them to let you know who they are in that instance me like you're talking about one of your principles and that is having empathy for the other side is that correct and i mean that can be a difficult thing to do on under normal circumstances right see the other side but in a pandemic when everyone has their own stories and likely their own set of issues that can become more difficult how do you navigate that yeah great question in in finite terms or in specific details or granular times as some people would say yeah you don't really know what the information is but you you got a pretty good you got a rough guess uh what they're dealing with now without even talking to them you you know that a lot of people are under pressure you know landlords under pressure you know bills have not gone away because that's what put is putting pressure on you your bills haven't gone away you know that whatever business they're in if their business thrives on uh if it's a restaurant and it thrives on people being able to get together in person they're under some serious pressure and there's not a lot of duplication for what they can do they they still have to be in that restaurant they can only have to have fewer people in it but if it's a business that can be done online well they're they're in the midst of a shift they're not in the midst of being shut down they're shifting so you get a rough idea of what they're going through and empathy really is let's change the definition from common use common use is sympathy agreement or compassion let's make it the mercenaries definition just understanding what pressure they're under and then taking an educated guess on your information on what that is articulating it saying it out loud and it's something as simple as wow sounds like you're really backed into a corner right now that's a simple empathy statement getting there with anyone no matter how difficult or how hardened their stance i'm sure you've come across in your experience um that people who don't want to budge or people who you know may not show their hands it may not be immediately obvious where to be empathetic towards them what do you do in those kinds of situations well you know um here's a great magic question to ask up front because we want everybody to be real careful the word why uh why causes people to be defensive um so there's a one limited instance when that serves you and that's when why do they want to deal with you you know why do you why do you want to stay in business with me it's a legitimate question now why are you renegotiating but you know why would you want to be in business with me when this crisis is over that's a great the only time that you should ask somebody why because why triggers defensiveness every other time you need to know why you should say well you know what's causing this instead of why are you doing it but now we refer to this as proof of life is there a deal here that works for you with them that's from the kidnapping days you know is there a deal is a hostage alive is a relationship alive is it going to thrive ask them why they want to deal with you that's going to begin to immediately tell you what kind of a negotiation you're in are you in there with a mercenary is trying to cut your throat or you're in there with someone who wants to be with you for the long haul really great questions already from our audience and real life examples um v jeevens asks someone walks into my store without a mask how can i negotiate with them when it's a county mandate and not my policy what would you do in that scenario chris very touchy one yeah oh wow the mass negotiations right now particularly all right so what what's causing someone to not want to mass wear mass these days we know what we know exactly why they feel like it's infringing on their freedom uh they feel like it's infringing on their rights they feel like wearing a mask is a political statement well the definition of empathy is to know where the other side's coming from so somebody walks in without a mask you could say look looks to me like your freedom's really important to you looks to me like you don't want to be constrained looks looks to me like you feel really backed into a corner by this whole mess that's going to catch him off guard you're the first person that hasn't argued who said anything that hasn't argued with them now then what do you do you follow up like is it ridiculous for me to want to look out for you as much as i want to look out for myself how can we feel comfortable with each other if i think a mask is important and you don't what you want to do is you want to leave the decision making in the other person's court so to speak but really frame them in a way where they got to make a choice between options you know one definition of confrontation is a focused comparison you don't want to be confrontational but you want to give them a focused comparison between safety and freedom and in your store you're leaning towards safety because you want to be with your customers for a long time that was a good answer wow even you caught me off guard by the way you know you i imagined you handling someone coming into a store uh someone notes you must like al pacino move movies i think you were giving some al pacino vibes there uh in a good way of course let's get to some more practical questions this is another great one benjamin ritter asks how do you negotiate price without impacting their perception of value that's a great one how do you for example negotiate with a landlord and make sure that they're not going to be worried that if they give you some kind of break or a deal that's he or she is going to lose value on that property yeah well you know um if we want more value price and value are really two separate things like buying my belief is that you should never you should never give in on price and that's predicated on the uh presumption that whatever your product is it's a good and valuable service so you're not cheating somebody to begin with you know when com people in my company when we're coaching a black swan method our presumption is that you have integrity and you have a valuable product that's more than worth the price so that's where we're coming from this is not for somebody selling snake oil if they if they're worried about the price they're really worried about the value so with a landlord landlord values i'm here to tell you i've been a landlord in the past a landlord values a tenant that keeps the place clean doesn't bust a place up and pays a rent a tenant values a landlord that's responsive to requests when i was a landlord i would have been happy to not raise a rent on a tenant that paid their bills on time didn't didn't kick holes in the walls and kept the place clean so what's it about it's about a relationship where both sides are delivering on their their promise that they made at the very beginning and then the other side's going to give you some latitude so if i'm negotiating with my landlord i'd say again it's the the not sort of label that you know sounds like something's not valuable to you i'd say sounds like it doesn't matter to you that i always pay my rent on time and say it not as an accusation because tonality is the magic of the hostage negotiator that's how we get terrorists to not get mad at us great tone of voice you can use that in your negotiations you can do the late night fm dj voice or you know the genuinely curious voice sounds like it didn't matter to you that i always paid my rent on time it's not an accusation that's genuine curiosity that helps your your words land without having land softly without having them land like a slap in the face that must be so much more important the tonality of your voice because you know under different circumstances you could have a face-to-face conversation right so what do you lose when it has to be over the phone or after a zoom where you have an echoing voice or another situation where you just can't be there in person i mean what do you gain or what do you lose in that scenario well you know i think if you just if you're willing to slow down if you're willing to slow things down it actually accelerates the overall interaction you know i had a when i was an fbi agent we had a trial in new york with a great judge michael mukasey he used to say we're going to slow things down in order to save time and everybody will be like oh yeah wow that's a great idea it's slowing it down it's going to save time we don't mind so it's it's all in how you you pitch it and in in reality if you slow your conversations down you'll have fewer overall because you won't be spinning your wheels and there'll be fewer misunderstandings you'll be more effective and you'll save time so if it's got to be over the phone you know just slow down a little bit uh focus a little bit more on making sure you heard the other side out yeah they're going to be uncomfortable because they're not a person either there's something about being in person it has a certain special feel to it you can make up for it by simply slowing things down when you're on zoom or whether you're on the phone that's a great tip um i went to another audience question from david hundley it's an interesting one how do you handle negotiations between genders and i think that also raises the question uh should there be a difference i added in that last part chris yeah well with good negotiations it doesn't make any difference um great bad negotiations it might be a problem but you know that's that's going to run into a problem is one of the two people being too assertive too too blunt too pushy is one of the two people completely focused on the relationship when the other person is completely focused on the transaction uh which if you're for really top tier negotiators they focus on the transaction and the relationship because they realize that the relationship has to be there to make the implementation of the transaction smooth so i you know you run into problems between genders when one or both are not particularly adept at negotiation i we have found in point of fact in learning our negotiation strategy the black swan method women pick up faster than men do i can't explain what causes that i could i could speculate on it but women tend to pick it up faster than men do it's about relationship long-term relationships long-term success uh societally maybe women are more encouraged to focus on the relationship i don't know but i do know that women happen to pick up this style of negotiation faster than men do but at the top tier it doesn't make any difference interesting another um great question just came in from caesar rivera how do you negotiate with a narcissistic person that makes all points of negotiation personal and ties their ego to every decision made in a negotiation i imagine that's going to be the toughest kind and you've probably had experience with these kinds of people where do you even start yeah well you know those people are so predictable like if their egos tied to the points then all i got to do is tie their ego to the points that i want you know it's more about you getting out of your own way a narcissist is offensive they are so self-centered and so self-involved that they set us off well you know that's triggering negative reactions on us and the thing that we really learned about emotions and negotiations it's not emotions that are bad for negotiations it's negative emotions if somebody punches your buttons it's your negative emotions that are getting triggered and when your negative emotions are getting triggered you're actually dumber when you're in a positive mindset you're 31 smarter than you are in a negative mindset 31 percent that's a huge tactical advantage i got a question so if you are speaking to this person who has a large ego you want to play into that ego are you kind of just like massaging their ego to get what you want but of course because what you know what forget you do you want to get even or do you want to get where you want adapting to the perspective of the other person the definition of empathy is not layering in your ego to make them see your point of view that is not empathy empathy is where is the other side coming from let me identify where they're coming from and then let me use that uh some people won't say negotiation is the art of letting the other side have your way well yeah you got to get out of you get your ego out of the way in order to do that chatter um still in our session chat about rent so let's spend a little bit more time there how do you and to be practical how do you negotiate your rent down let's say that we're not the landlord i think you explained that side a little bit but if you're the one who's renting where do you go from and i loved your example with the mask because you sort of told me exactly what you would say in that scenario well let me give you a real life example of one of our clients that the landlord was recently raising a rent on her i don't know if it's a coincidence that it was a woman that applied this technique but a lot of our examples have to do with women so she sat down with a landlord and what are the landlord's reasons for raising the rent the landlord is saying to themselves look my taxes are going up my bills are going up i get bills to pay i get a mortgage to pay now the important part of a negotiation is when the word butt is about ready to come out of your mouth you should shut up and letting dynamic silence work for you so that the the tenant said to the landlord look you feel like you need to raise my rent because your bills are not going away your taxes are not going away your taxes are going up your utility bills are not going away your utilities are going up you're under no shortage of pressure yourself and then she shot up she didn't try to make her case at all and here's exactly what happened with the landlord the landlord said but if keeping you as a tenant requires that i not raise your rent you've been a good tenant i'm not going to raise your rent the tenant never pitched her point of view at all the first move is to completely state the other side's reasons for them and then shut up how often does it work the way it worked for this woman in this negotiation what difference does it make if it works one percent of the time let me pull that one percent off the table i can always make my value pitch afterwards but if i can make any percentages of my deals make themselves for me just by articulating the other side's perspective and their reasons and their justification i'm willing to take those off the table it saves me a massive amount of time i like that because it feels counterintuitive by just repeating something back to someone instead of trying to make all these arguments that you may have built up sometimes the best thing to do is just sort of let silence speak for itself um and that goes also to one of your sort of negotiation tips and that's the power of no one of our producers said she heard you speak about this a long time ago and she still uses it um in her daily life krista hello um tell us a little bit about that because i found it fascinating as well well you know the short answer to that is while we love hearing yes everybody hates saying it and why do people hate saying it everybody has burned in their brains some experience where somebody got them to say yes and they condom we were talking about this the other day my son who's the president of my company phenomenal negotiator he still to this day remembers when he was eight years old and someone tricked him into saying yes over something and he lost one of his famous sporting cards yeah and and it still bothers him everybody's gotten suckered by saying yes there's an entire business out there where people are buying back time shares because people have gotten suckered into buying time shares with this whole yes momentum nonsense would you like to travel the world for free would you like to stay in luxurious surroundings and never have to pay for it would you love to have the freedom to go on vacation whenever you want and boom they got a time share now they don't know how to use it and they don't know how to get rid of it everybody's been been suckered with this yes momentum at some point in time so on the other side saying yeah if you're the negotiating negotiator you want to sucker someone into saying yes or do long term does that not work out so well well only if you never want to do business with them again only if you want them to hate you for the rest of your life uh it's a great short term strategy long term it's a great way to put yourself out of business if you leave that sort of impression with everybody feeling burned by you you know you're gonna have to go on a witness security program and change your identity if you keep it up long enough so no it's not a good thing i'm curious what did what did your friend say to him to get that prize baseball card do you know you know he doesn't even know all he knows is that he gets suckered into yes and i gotta tell you something in the top drawer on my desk i still have a coupon book that i bought when i was 17 years old for 25 dollars that was supposed to be worth 50 000 worth of discounts and i still haven't figured out how to use that stupid coupon book but would you like to buy everything at 90 off i think was probably how that pitch started so but just just accept that people have been burned by yes everybody's been burned by yes i think in africa they have a saying once bitten by a snake you're scared of ropes that's how nervous uh getting someone to say yes will begin to make them whether they realize it or not now the stupid thing is people have been conditioned that every time they say no they protect themselves so change your yes questions to know switch from is now a good time to talk to is now a bad time to talk go from do you agree to do you disagree um we we get sometimes when we ask people if we want an appointment at two o'clock on tuesday we'll say would it completely destroy your entire week if we talked at two o'clock on tuesday actually what we get a lot of times is people say no no i can't talk it too but here's what i can't talk because saying no made him feel safe since they felt safe they felt like they could collaborate and they offer us answers after they say no so it's it sounds crazy but everybody that starts to do this loves the impact that it has on their lives a comment from jerry he says a great deal is always win-win so i think that gets at what you're talking about here too is that if you burn someone make them say yes they won't feel like they've won um another great question from jennifer she asks in the current environment how do you avoid negotiating against yourself and professional services well um one of our favorite negotiation skills because it's so simple is the mirror that's repeating the last one to three words of what somebody's just said or selected one to three words now it is the simplest skill of all i mean there is nothing simpler than those sort of directions repeat the last one to three words what somebody just said the funny thing i've noticed is people of really high combined iq and eq if their eq emotional intelligence is very high if they're very book smart boy they love mirrors and my one of my favorite stories over mirrors was a gentleman i was i was on a conference call with recently happen to be african-american he's got twin nine-year-old boys who are smart as whips and he was saying like you gotta teach my boys because they love the mirror and so i thought i said to him your boy's got to be smart because smart people love this every time they mirror their mom and it works on their mom then one of the nine-year-old boys will go aha i just married you so you don't go aha after you marry somebody but the original question is how do you keep from negotiating with yourself get good at mirrors and sprinkle them into the conversation and you'll find that you don't negotiate against yourself at all because the other side is talking 90 percent of the time do me a favor chris and never teach thousand to my own kids okay i don't need them to uh turn the mirror on me to to get more of what they already want um here is another question says he lays out a scenario a potential client asks me my rate and price and i'm not ready so his question is what kind of research and decisions should he have made beforehand to negotiate in that moment well he's actually doing research in the conversation um somebody starts pitching rate and price at you really early chances are you're the rabbit or you're the competing bid or they're looking for free consulting especially if they're pushing for price on you earlier there's a really good chance it's it's probably at least 50 50. it's probably actually closer to 70 percent chance they're looking to you for a competing bid and this gets back to this entire proof-of-life issue that we talked about earlier are they looking to do a deal with you are they looking to do a deal with somebody else and they're just trying to drive the price down on the other person with your price so uh if it's your gut instinct uh and and believe me it should be your gut instinct because it's the case about 70 of the time feed it back to them innocently uh say sounds like you're still gathering information on this uh sounds like you're still in the information gathering stage that's an observation that they're going to respond to in one way more uh with more information than the mirror that i was just talking about whatever they say to you back as a response to your label and because it sounds like is a label then you mirror that and they'll talk some more they'll give you some more information if they're just shopping price for you here's the bad news and you're not to like this they're wasting your time say to them look it doesn't sound like you're ready to pull the trigger with me right now when i'm your preferred vendor i'll be happy to give you a product a service a relationship that you'll never be able to duplicate anyplace else but until then i don't think i can help you that's interesting and you're hoping that maybe they eventually come back or you've strengthened your position in the future um okay i can't believe we're out of time i are you guys sure we can't go another hour i really wish we could but there is one last thing that i think one last question that i think would be a quick one i'm not familiar with this but i was intrigued so i got to ask jerry says that he read your book and couldn't visualize the late night dj voice is that a thing and can you demonstrate it he wants me to demonstrate the late-night fm dj voice well i'm not sure exactly what that would sound like how was that it's amazing i i really put myself out there i didn't even know if that was a thing but that was uh the reward for that chris was great thank you jerry i think that was um a great note to end on you should be a voiceover coach too that was pretty good chris you could teach me to talk like that on tv that would be appreciated or totally not but um thank you so much again i i so wish we had more time and i hope we get to do this again i think that um the audience participation was fantastic so thank you to everyone who was asking questions and commenting you've got a lot of fans out there um and thank you again stay well it's my pleasure thank you it was fun to do now bye everyone you

Channel: CNBC Events

Views: 6,032

Keywords: Small Business Playbook

Id: OE_M7G4LYkM

Length: 30min 37sec (1837 seconds)

Published: Wed Aug 12 2020