Losing Negotiation Tactic: Denigrating the Value of the Other Party’s Offer
Follow-up to the negotiation techniques mentioned in the Boiled Frog post from a year ago, here’s a look at some other common dynamics of negotiations:
Lose-Lose Negotiations through Value-Denigration
The art of negotiation is the art of communication and decision-making under the pressure of time, tactics and incomplete information.
Negotiation tactics are deliberate actions – manipulation of messages or circumstances – in order to affect the other’s party’s perception of reality. Tactics work in concert with the pressures of time and incomplete information… and they are often designed to change the other party’s perception of the available time and information.
One key point of information that every negotiator wants to have is this: “What does the other party really want or care about?” Whether or not every negotiator wants to share that is another story. In fact, for some negotiators or negotiation situations, one party will want to use tactics to distort the other party’s perception of that information.
Enter the common tactic of Value-Denigration. This is when one party tries to create the impression that something the other party has to offer isn’t of any significant value or importance to themselves. The party will directly or indirectly be saying, “That’s all well and good that you’re giving me X, but I don’t particularly want or need X, so I don’t see why I should concede on Y because of that.”
The tactic of Value-Denigration is most obvious when one party asks for an item but refuses to concede any value to that item.
Value-Denigration can be used as a way to counter any specific elements or proposed concessions within a given deal. (“That detail is worth nothing to me.”) In its most extreme form, this tactic can be used to explicitly de-value the other party’s entire offer. (“I don’t think what you’re offering is particularly valuable or unique, either to me or anyone else. You’re lucky I’m even taking the time to talk with you.”)
In some cases, the tactic is actually being used as a counter-tactic to another tactic, that of Value-Inflation – when one tries to create the impression that what they are offering (or giving up) is of a vastly higher value to themselves than it actually is.
For example, let’s say two parties are negotiating over the fee for a service that Party A proposes to deliver to Party B. As a part of that service, Party B specifies that Party A must also include Component X, as part of the service.
Party A knows that the incremental value of Component X ranges somewhere in the area of $50 – $150. However, Party A decides to inflate that true value, and describes component X as having a value equivalent to $1000.
Sensing that the Value-Inflation tactic is being used, Party B can respond in a number of ways, along a spectrum:
Option #1 (high end of spectrum): Party B can go along with Party A and agree to assign a value for Component X well above its range of true value (e.g. $500)
Option #2: (mid-range of spectrum): Party B can insist on keeping the negotiation within the bounds of true value and haggle within that range (e.g. $50 – $150)
Option #3 (low-end of spectrum): Party B can counter with a Value-Denigration tactic, claiming that while they require Component X, they personally don’t value it and are not willing to pay much, if anything, for it (e.g. $5)
In most cases, responses closer to the Option #3 end of the spectrum will be a failing approach for Party B…we’ll look at why in detail a moment, but the short answer is this: Sooner or later, Party A will realize that Party B does, in fact, value Component X. At that point, the relationship will be poisoned.
The above example illustrates the key difference between run-of-the-mill haggling (bargaining or trading) and this idea of outright Value-Denigration… and also to make the point that Value-Denigration tactics are a losing approach to relationship management, even when used to counter Value-Inflation tactics. Even in its more subtle forms, the Value-Denigration tactic can have a lasting, negative effect on the relationship between the parties, especially if subsequent collaborations or negotiations need to happen between the parties.
Let’s go back to our example: Let’s say Party B decides to go with Option #3 above and says to Party A, “To me, this component X that I asked you for is worth five bucks, tops.” Remember that Party A knows this isn’t true (or will eventually figure it out in subsequent interactions). When Party A knows that the statement isn’t true, they now has three choices of what to think:
Impression #1: Party B is a conniving jerk
Impression #2: Party B is an ignorant fool
Impression #3: ..some combination of the above
From Party A’s point of view, Impression #2 is slightly better than Impression #1. With Impression #2, there’s always the hope of overcoming the tactic by educating Party B, which Party A can possibly help out with. Overcoming Impression #1, on the other hand, requires demonstrated character development on the part of Party B, which is usually outside the control of Party A. (Not surprisingly, people who use Value-Denigration will often accompany that tactic with a disingenuous claim of ignorance.)
From Party B’s point of view, they have conveyed the impression that they are a conniving jerk and/or an ignorant fool… whether this is true information or not, it is probably not information that they wanted to share with Party A.