advantage of you because it knows you will be consistent and never retaliate. On the other hand, if you bluff on a regular, predictable basis, the other side will eventually figure out your bluffing pattern and your bluffs become as predictable as Rich Gannon’s fakes were in Super Bowl XXXVII. Therefore, the best way to keep the other side on the defensive is to bluff occasionally on a purely random basis so the other side never knows what to expect. An example of a bluff in a media selling situation would be to set your initial offer higher than you are actually willing to accept. If you are dealing with a buyer with whom you regularly negotiate, you must have walked away from business in the past. By doing so, your current bluff becomes credible. Two things can happen in this bluffing situation, either the buyer pays the highball rate or the buyer may call your bluff and say that your price is too high. In which case, you can back down, lower your price and get the business. However, you can only back down on rare occasions, because the buyer will learn that your bluffs are just that, bluffs, and not believe them. Rule #9: If you bluff, use a mixed strategy and occasionally bluff on a random basis. If you bluff on an occasional random basis, a buyer will never be certain whether or not you are bluffing. And remember, bluffs are only for experienced not for rookies. Estimate the ballpark, commit to walk-aways, and set anchors Estimate the ballpark. A ballpark is the difference between a buyer’s initial offer and your highest legitimate expectations (HLE). Your HLE includes not only price but also terms and conditions. Rarely are media negotiations about price alone; they include many other elements such as contract terms, non-cancellation clauses, added value, favorable ad positions, options for renewals, favored-nations
advantage of you because it knows you will be consistent and never retaliate. On the other hand, if you bluff on a regular, predictable basis, the other side will eventually figure out your bluffing pattern and your bluffs become as predictable as Rich Gannon’s fakes were in Super Bowl XXXVII. Therefore, the best way to keep the other side on the defensive is to bluff occasionally on a purely random basis so the other side never knows what to expect. An example of a bluff in a media selling situation would be to set your initial offer higher than you are actually willing to accept. If you are dealing with a buyer with whom you regularly negotiate, you must have walked away from business in the past. By doing so, your current bluff becomes credible. Two things can happen in this bluffing situation, either the buyer pays the highball rate or the buyer may call your bluff and say that your price is too high. In which case, you can back down, lower your price and get the business. However, you can only back down on rare occasions, because the buyer will learn that your bluffs are just that, bluffs, and not believe them. Rule #9: If you bluff, use a mixed strategy and occasionally bluff on a random basis. If you bluff on an occasional random basis, a buyer will never be certain whether or not you are bluffing. And remember, bluffs are only for experienced not for rookies. Estimate the ballpark, commit to walk-aways, and set anchors Estimate the ballpark. A ballpark is the difference between a buyer’s initial offer and your highest legitimate expectations (HLE). Your HLE includes not only price but also terms and conditions. Rarely are media negotiations about price alone; they include many other elements such as contract terms, non-cancellation clauses, added value, favorable ad positions, options for renewals, favored-nations
MS_5_Chapter_13_NegotiatingClosing.docx