Negotiations begin with “No”
Book Review: FBI hostage negotiator takes on the business deal
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- Written by Lisa Rabinsky
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- Comments: DISQUS_COMMENTS
Imagine that you receive a phone call that your son or daughter has just been kidnapped. The kidnapper has selected you because “he knows” that you can get into the vault and he wants $50,000,000—or even $50,000. What do you do?
For starters, I would look for Chris Voss. He is a former FBI hostage negotiator who has negotiated all over the world. His favorite word: No!
As bankers, we live in a world where we are always trying to get to “yes.”
How hard do you work to hear “Yes, I will open the account” or “Yes, I will sign the commitment letter”?
But the real fun starts when someone says “No.” As Voss explains, “No” starts the negotiation.
For Voss, his gateway from the Joint Terrorism Task Force to hostage negotiator came from Amy Bonderow, head of the FBI Crisis Negotiation Team in New York. She also got Voss thinking about the power of “No.”
Heckuva job interview launched new skill
Voss admits knowing nothing about negotiation at this point in time. His conversation with Bonderow went something like this:
“Do you have any training?” No.
“Do you have any credentials?” No.
“Do you have any experience?” No.
“Do you have a relevant degree?” No.
“Then go away.”
“Really?? Isn’t there anything I can do?”
“Know what? Go volunteer at the suicide hotline—then come talk to me.”
After this conversation, Voss realized that “No” was just the gateway to get to “Yes”! And he volunteered for the hotline.
Don’t be afraid of the word
Saying "no" makes a person feel safe and makes them more willing to participate in a conversation, according to Voss. You have to train yourself to hear “No” as something other than rejection.
If someone says “No,” think of alternatives, he recommends, such as, “No, I am not ready to agree.” So then ask what about it doesn’t work.
Another tip, the earlier people say “No,” the better.
Also: If you want a straight answer, don’t ask “why.”
“Why” puts people on the defensive. The word comes across as accusatory.
“Why don’t you want to open the account?”
You can hear the negative undertones if you say it aloud. “What” or “How” are much more mellow, as in “What can we do so you will open the account?” Better.
Techniques in action
Another trick of the trade that Voss shares is to use labeling, which is validating the other person’s emotions. Bankers can use this strategy.
For example, in our work, say a client comes in upset over bank fees. He is visibly angry, raising his voice and growing more enraged.
A good start might be, “Good afternoon sir. It seems like you are very upset with the bank. How about sitting at my desk and discussing the situation with me?”
If the customer sits, let him talk—let him vent. Mirror his sentiments back to him. (Voss devotes his second chapter, “Be a mirror,” to this principle.)
“It sounds like you feel that we have treated you unfairly by assessing a late fee when you didn’t make your payment on time.”(Assume he says “That’s right”)
“Is there something the bank could have done to help you make your payment timely? We certainly appreciate your business. How can I introduce you to our online banking? It includes free bill pay. I would be happy to walk you through it and even help you set up your loan for automatic payment.”
By this point, the customers has calmed down. The rage has subsided. You labeled his feelings, showed empathy, and let him know he is a valued client.
It’s possible this negotiation may continue. Or it’s also possible that the customer will accept that he was irresponsible in not making his payment timely and will take you up on your online banking offer.
But in either case, he has been defused. It’s important to remember people want to be appreciated and understood.
More “simple” skills
Two other words that Voss states can transform a negotiation are “That’s right.” He cautions that “You’re right” is not the same thing.
“That’s right” signals agreement and understanding and at that point, we are on the same page and change becomes possible. “You’re right” means “I agree in theory but not with your conclusion.”
Voss feels “That’s right” is even better than “Yes”.
Another fun tactic is one I learned first-hand when negotiating a loan rate. That’s the power of non-round numbers. While 4.99% and 5% are so close, many more people are interested at 4.99% as opposed to 5%. It’s not surprising to know marketers have figured that out when you look at bank advertising.
Handling “the black swan”
The last part of the book delves into the unknown—or more specifically, the unknown unknowns which Voss refers to as “black swans.”
This is information that can totally change the course of a negotiation. Depending on what it is, a black swan can kill a deal or bring you success. (Voss actually named his consulting firm The Black Swan Group.)
I had a black swan event. I had worked hard to approve a commercial real estate loan purchase for a local owner of a successful chain of restaurants. Very few banks are eager to do loans to restaurants and mine was no exception. So I already knew I wasn’t going to be competing with any other lenders. And I obtained approval in the end.
Two days before closing, he cancels the loan!
I knew he needed the funds, we had agreed on terms, we were able to close by the contract date … what happened?
As it turns out, my “black swan” was the applicant’s father. His father was someone who had never even come up in conversation but was a retired successful businessman who regularly advised his son.
He did not think his son was going to get approval for the bank loan. When his son proudly told him he had received the commitment letter from the bank for his purchase, he father asked to see it.
His father then said, “Son, I am so proud of you. I know this was not easy to get approved. Since the bank has this much faith in you, I am just going to write you a check for the amount you need. We will consider it part of your inheritance.”
I was flabbergasted. Never saw that one coming. Perhaps Voss could have negotiated for him to still take the financing. But I simply congratulated him.
These are just some of the tips and information Voss offers in his book, which is a fascinating read with actionable information for everyday circumstances.
Tagged under Blogs, HowTo, Books for Bankers, Community Banking, Feature, Feature3,
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