WEBVTT 00:00.000 --> 00:08.560 align:middle line:90% 00:08.560 --> 00:09.060 align:middle line:90% All right. 00:09.060 --> 00:11.130 align:middle line:84% So in reality, I shouldn't even be 00:11.130 --> 00:13.980 align:middle line:84% teaching a chapter on bargaining because if you listen 00:13.980 --> 00:17.060 align:middle line:84% to everything else, you've negotiated great, 00:17.060 --> 00:18.960 align:middle line:84% and you're not going to need to bargain. 00:18.960 --> 00:21.210 align:middle line:90% The deal will have made itself. 00:21.210 --> 00:24.300 align:middle line:84% In those instances, we do need to get down 00:24.300 --> 00:26.520 align:middle line:90% to brass tacks bargaining. 00:26.520 --> 00:28.080 align:middle line:90% Here's some techniques. 00:28.080 --> 00:29.040 align:middle line:90% [MUSIC PLAYING] 00:29.040 --> 00:34.800 align:middle line:90% 00:34.800 --> 00:37.950 align:middle line:84% The Ackerman System is a bargaining model 00:37.950 --> 00:40.500 align:middle line:84% attributed to a gentleman named Mike Ackerman. 00:40.500 --> 00:42.780 align:middle line:84% I was taught this bargaining model 00:42.780 --> 00:45.280 align:middle line:84% when I was doing kidnapping negotiations with the FBI. 00:45.280 --> 00:48.670 align:middle line:84% And they laid out basically, you have a target price 00:48.670 --> 00:50.840 align:middle line:90% you want to come to. 00:50.840 --> 00:52.580 align:middle line:84% Once you've picked out your target price, 00:52.580 --> 00:55.820 align:middle line:84% you're going to come in at 65% of that price. 00:55.820 --> 00:59.030 align:middle line:84% You're going to plan on making three raises to get 00:59.030 --> 01:01.510 align:middle line:90% to the price that you wanted. 01:01.510 --> 01:04.030 align:middle line:84% And the first raise is going to be 20% raise, 01:04.030 --> 01:05.680 align:middle line:84% the next raise is going to be 10%, 01:05.680 --> 01:07.870 align:middle line:84% the last raise is going to be 5%. 01:07.870 --> 01:13.470 align:middle line:84% Each one of your raises are decreasing increments by half. 01:13.470 --> 01:15.510 align:middle line:84% And then when you get to the very last number, 01:15.510 --> 01:18.150 align:middle line:84% you make sure you throw out an odd number, 01:18.150 --> 01:23.520 align:middle line:84% and you also throw in some non-monetary object 01:23.520 --> 01:25.950 align:middle line:84% that you know the other side doesn't want, 01:25.950 --> 01:28.770 align:middle line:84% but it makes them feel like they've really tapped you out. 01:28.770 --> 01:30.550 align:middle line:90% They've taken every last dime. 01:30.550 --> 01:33.900 align:middle line:84% You know, they've fought you tooth and nail. 01:33.900 --> 01:36.600 align:middle line:84% They've felt the decreases in increments. 01:36.600 --> 01:38.670 align:middle line:84% They still feel like they're winning. 01:38.670 --> 01:40.180 align:middle line:84% You come in with the last number. 01:40.180 --> 01:41.430 align:middle line:90% It's an odd number. 01:41.430 --> 01:44.430 align:middle line:84% It seems like that you scratched for every penny. 01:44.430 --> 01:47.638 align:middle line:84% And consequently, they worked so hard to get there 01:47.638 --> 01:48.930 align:middle line:90% that they want to cut the deal. 01:48.930 --> 01:50.280 align:middle line:90% They're not going to renege. 01:50.280 --> 01:59.180 align:middle line:84% All right, so I'm trying to buy a coffee table for $100. 01:59.180 --> 02:00.430 align:middle line:90% And that's what I want to pay. 02:00.430 --> 02:02.770 align:middle line:84% They're asking $150, they're asking $200. 02:02.770 --> 02:04.450 align:middle line:90% They might be asking $250. 02:04.450 --> 02:07.176 align:middle line:90% It doesn't matter. 02:07.176 --> 02:09.509 align:middle line:84% I'm going to see what their reaction is when I throw out 02:09.509 --> 02:10.789 align:middle line:90% my initial price. 02:10.789 --> 02:13.300 align:middle line:84% So I'm going to come in at 65% of where I want to end up. 02:13.300 --> 02:18.330 align:middle line:84% So I'm going to say, look, you know, I got a price. 02:18.330 --> 02:20.720 align:middle line:84% I'll give you the price, but you're not going to like it. 02:20.720 --> 02:21.928 align:middle line:90% I mean, it's going to be low. 02:21.928 --> 02:23.640 align:middle line:90% It's really going to be low. 02:23.640 --> 02:27.230 align:middle line:84% And I got a feeling that when I give you this price, 02:27.230 --> 02:28.790 align:middle line:84% it's going to make you really angry, 02:28.790 --> 02:31.060 align:middle line:84% and the last thing I want to do is offend you. 02:31.060 --> 02:35.950 align:middle line:84% So I'm scared to give you the price. 02:35.950 --> 02:38.170 align:middle line:84% Well, you're getting their permission, you know. 02:38.170 --> 02:40.548 align:middle line:84% You're giving them some emotional anchoring. 02:40.548 --> 02:42.340 align:middle line:84% What they're thinking, like, this guy wants 02:42.340 --> 02:43.600 align:middle line:90% a coffee table for nothing? 02:43.600 --> 02:45.610 align:middle line:84% What's he going to give me, $5.00 for the coffee table? 02:45.610 --> 02:46.650 align:middle line:84% They're going to imagine something 02:46.650 --> 02:48.970 align:middle line:84% that's worse than what you would ever throw out. 02:48.970 --> 02:51.070 align:middle line:84% So you finally give me permission 02:51.070 --> 02:52.850 align:middle line:90% to give you the price. 02:52.850 --> 02:55.510 align:middle line:84% And I say, no, it's going to make you angry. 02:55.510 --> 02:57.442 align:middle line:90% You know, I'm scared. 02:57.442 --> 02:58.900 align:middle line:84% I'm afraid to give you this number. 02:58.900 --> 03:02.000 align:middle line:84% And they'll almost beg you to give them the number. 03:02.000 --> 03:08.380 align:middle line:84% And then very apologetically, you gotta say, $65.00. 03:08.380 --> 03:11.080 align:middle line:84% Now they're not going to be happy with that price, 03:11.080 --> 03:13.773 align:middle line:90% but they asked you for it. 03:13.773 --> 03:15.940 align:middle line:84% They're not going to get angry because you told them 03:15.940 --> 03:18.065 align:middle line:84% they were going to get angry, and that diffused it. 03:18.065 --> 03:20.220 align:middle line:84% And you were deferential the whole time. 03:20.220 --> 03:21.920 align:middle line:90% I mean, they feel powerful. 03:21.920 --> 03:23.710 align:middle line:90% You know, they feel bad for you. 03:23.710 --> 03:26.150 align:middle line:84% But after you throw your number, then your next move 03:26.150 --> 03:28.240 align:middle line:90% has got to be tactical empathy. 03:28.240 --> 03:29.990 align:middle line:84% It's got to be the application of empathy. 03:29.990 --> 03:31.318 align:middle line:90% It's got to be apology. 03:31.318 --> 03:32.860 align:middle line:84% They're going to say, well, you know, 03:32.860 --> 03:33.930 align:middle line:90% that's not what I had in mind. 03:33.930 --> 03:34.690 align:middle line:90% You gotta do better than that. 03:34.690 --> 03:35.920 align:middle line:90% I mean, that's ridiculous. 03:35.920 --> 03:37.713 align:middle line:84% If they're a seasoned negotiator, 03:37.713 --> 03:38.880 align:middle line:90% they're give you the flinch. 03:38.880 --> 03:41.427 align:middle line:84% They're gonna go, oh my god, it's ridiculous. 03:41.427 --> 03:42.010 align:middle line:90% It's horrible. 03:42.010 --> 03:44.560 align:middle line:84% And that's where you gotta ply them, say, you know, 03:44.560 --> 03:46.460 align:middle line:90% I'm so sorry. 03:46.460 --> 03:48.270 align:middle line:90% You know, it's horrible. 03:48.270 --> 03:50.380 align:middle line:84% I can see that I've offended you. 03:50.380 --> 03:52.120 align:middle line:84% And you're asking a reasonable price, 03:52.120 --> 03:54.250 align:middle line:90% and I'm being ridiculous. 03:54.250 --> 03:56.890 align:middle line:84% And you just gotta continue to hit them 03:56.890 --> 03:59.080 align:middle line:90% with versions of empathy. 03:59.080 --> 04:00.940 align:middle line:90% And you gauge their reaction. 04:00.940 --> 04:04.150 align:middle line:84% You know, you've got to push them every step of the way 04:04.150 --> 04:07.480 align:middle line:84% because when you get to the number that you've settled at, 04:07.480 --> 04:08.890 align:middle line:90% you need them to execute. 04:08.890 --> 04:12.080 align:middle line:84% You need them to be happy with that number. 04:12.080 --> 04:14.130 align:middle line:84% So the next point is you're not budging off 04:14.130 --> 04:16.458 align:middle line:84% your number until they come off their number. 04:16.458 --> 04:18.750 align:middle line:84% Whatever amount of money they come off of their number, 04:18.750 --> 04:20.042 align:middle line:90% then you've got to be grateful. 04:20.042 --> 04:21.880 align:middle line:90% Oh, you know, thank you. 04:21.880 --> 04:23.650 align:middle line:90% That was generous. 04:23.650 --> 04:26.830 align:middle line:84% You gotta enhance the positive emotions. 04:26.830 --> 04:28.900 align:middle line:84% You know, they feel like they've given in. 04:28.900 --> 04:32.380 align:middle line:84% You don't want them to regret giving in. 04:32.380 --> 04:34.180 align:middle line:84% You tell them that you appreciate 04:34.180 --> 04:37.030 align:middle line:84% that they were generous and congratulate him on that. 04:37.030 --> 04:40.015 align:middle line:84% Now your next number is going to be $85. 04:40.015 --> 04:42.670 align:middle line:90% 04:42.670 --> 04:44.920 align:middle line:84% They're going to feel like that's still not where they 04:44.920 --> 04:47.620 align:middle line:84% want to be, but they're going to feel a sense of accomplishment 04:47.620 --> 04:50.740 align:middle line:84% that you've come from $65 to $85. 04:50.740 --> 04:52.180 align:middle line:90% And again, you gotta apologize. 04:52.180 --> 04:53.680 align:middle line:84% I'd like to give you another number. 04:53.680 --> 04:55.510 align:middle line:84% I mean, I've worked really hard at this. 04:55.510 --> 04:57.600 align:middle line:84% It's been difficult for me to get to this. 04:57.600 --> 04:59.260 align:middle line:84% You know, as a matter of fact, I gotta 04:59.260 --> 05:01.840 align:middle line:84% go back and check my finances before I get this number. 05:01.840 --> 05:03.370 align:middle line:90% I gotta check with the people. 05:03.370 --> 05:05.170 align:middle line:90% I'm not sure I can cover this. 05:05.170 --> 05:09.630 align:middle line:90% So you've thrown out your $85. 05:09.630 --> 05:11.220 align:middle line:84% They're still fairly disappointed, 05:11.220 --> 05:13.350 align:middle line:84% but they feel like now they're hungry. 05:13.350 --> 05:15.140 align:middle line:90% They're making progress. 05:15.140 --> 05:17.190 align:middle line:84% You know, they feel that the process with you 05:17.190 --> 05:20.570 align:middle line:90% is making progress. 05:20.570 --> 05:23.650 align:middle line:84% And as long as people are making progress, 05:23.650 --> 05:26.600 align:middle line:84% it enhances their ability to stay in the deal. 05:26.600 --> 05:28.120 align:middle line:90% Now your next move is at $95. 05:28.120 --> 05:30.370 align:middle line:84% Now they're going to feel a sense of accomplishment. 05:30.370 --> 05:33.730 align:middle line:84% But they're going to know that that last move that you made 05:33.730 --> 05:36.780 align:middle line:90% was smaller than the first one. 05:36.780 --> 05:41.130 align:middle line:84% Always increase by decreasing increments. 05:41.130 --> 05:43.070 align:middle line:90% Always. 05:43.070 --> 05:46.040 align:middle line:90% You've got to manage the raises. 05:46.040 --> 05:48.150 align:middle line:90% Your next raise at $95. 05:48.150 --> 05:52.740 align:middle line:84% Now you go through the whole scenario again, 05:52.740 --> 05:57.090 align:middle line:84% you know, the whole dramatic scenario. 05:57.090 --> 05:59.280 align:middle line:84% The application of empathy, the recognition 05:59.280 --> 06:01.650 align:middle line:84% that they were generous, the recognition that you're 06:01.650 --> 06:05.110 align:middle line:90% probably making them angry. 06:05.110 --> 06:08.017 align:middle line:84% After $95, your last move's at the number 06:08.017 --> 06:09.100 align:middle line:90% that you're going to give. 06:09.100 --> 06:10.840 align:middle line:84% The number's gotta be an odd number. 06:10.840 --> 06:13.000 align:middle line:90% Everybody likes odd numbers. 06:13.000 --> 06:14.470 align:middle line:84% It's got to come out reluctantly. 06:14.470 --> 06:18.280 align:middle line:84% If you had planned on spending $100, 06:18.280 --> 06:24.890 align:middle line:84% then you really need to come in at $97.43. 06:24.890 --> 06:26.630 align:middle line:84% If you have the opportunity, ask them 06:26.630 --> 06:28.070 align:middle line:84% for a piece of paper and a pencil 06:28.070 --> 06:29.450 align:middle line:90% and start writing numbers down. 06:29.450 --> 06:31.033 align:middle line:84% It doesn't matter what you write down. 06:31.033 --> 06:32.120 align:middle line:90% Write down your birthday. 06:32.120 --> 06:33.560 align:middle line:90% Write down today's date. 06:33.560 --> 06:35.690 align:middle line:90% Write down how much you weigh. 06:35.690 --> 06:38.630 align:middle line:84% You know, make a show that you're working really hard. 06:38.630 --> 06:40.533 align:middle line:84% You're tapping the resources, where 06:40.533 --> 06:42.950 align:middle line:84% they're going to feel like they worked really hard for it. 06:42.950 --> 06:44.450 align:middle line:84% They're going to feel like they've 06:44.450 --> 06:46.930 align:middle line:90% tapped into your last dime. 06:46.930 --> 06:50.440 align:middle line:84% They're probably going to try to take one more 06:50.440 --> 06:52.150 align:middle line:84% move at you to get you off that number, 06:52.150 --> 06:56.980 align:middle line:84% and that's when you go, like, ah, you know, ah, you know, 06:56.980 --> 06:58.230 align:middle line:90% I've got a really nice jacket. 06:58.230 --> 06:59.080 align:middle line:90% Would you like my jacket? 06:59.080 --> 07:00.672 align:middle line:84% Would you like the shirt off my back? 07:00.672 --> 07:02.630 align:middle line:84% Effectively that's what you're doing, you know. 07:02.630 --> 07:05.650 align:middle line:84% But you're playing into the human nature aspects 07:05.650 --> 07:08.060 align:middle line:84% here, which is a little bit of drama play. 07:08.060 --> 07:10.910 align:middle line:84% I realize but these are people with emotions 07:10.910 --> 07:11.660 align:middle line:90% on the other side. 07:11.660 --> 07:15.260 align:middle line:90% Even sociopaths have emotions. 07:15.260 --> 07:16.790 align:middle line:84% So whoever's on the other side, you 07:16.790 --> 07:19.190 align:middle line:84% need to make them feel a sense of accomplishment 07:19.190 --> 07:22.070 align:middle line:84% that this was a victory, a hard won victory. 07:22.070 --> 07:24.050 align:middle line:84% They got you there every step of the way. 07:24.050 --> 07:26.660 align:middle line:84% They felt the brakes coming on the situation when 07:26.660 --> 07:28.340 align:middle line:84% each move was less, until finally 07:28.340 --> 07:31.220 align:middle line:84% that odd number came out there, and then the shirt 07:31.220 --> 07:33.450 align:middle line:90% off your back, whatever it is. 07:33.450 --> 07:35.660 align:middle line:84% And if they're going to make the deal, 07:35.660 --> 07:38.191 align:middle line:84% they'll make it there because they worked so hard for it. 07:38.191 --> 07:40.155 align:middle line:90% [MUSIC PLAYING] 07:40.155 --> 07:44.580 align:middle line:90% 07:44.580 --> 07:48.780 align:middle line:84% A lot of people are told go first and go high. 07:48.780 --> 07:52.830 align:middle line:84% I think that's a bad idea because it's 07:52.830 --> 07:55.835 align:middle line:84% forgoing the opportunity to gather information first. 07:55.835 --> 07:57.960 align:middle line:84% I'm going to want to know where you're coming from. 07:57.960 --> 08:00.440 align:middle line:84% When you throw a price out and how you throw out, 08:00.440 --> 08:03.300 align:middle line:84% it's he's going to give me a lot of information about you. 08:03.300 --> 08:04.950 align:middle line:84% And that's information that I want. 08:04.950 --> 08:07.110 align:middle line:90% I love information. 08:07.110 --> 08:09.570 align:middle line:84% Every bit of information I get in a negotiation 08:09.570 --> 08:13.030 align:middle line:84% makes me smarter every step of the way. 08:13.030 --> 08:15.810 align:middle line:84% So if you go first, I get information on you. 08:15.810 --> 08:18.420 align:middle line:84% You haven't gotten any information on me . 08:18.420 --> 08:21.210 align:middle line:84% If somebody is really pushing you to go first, 08:21.210 --> 08:24.420 align:middle line:84% it's also an opportunity to pivot the terms. 08:24.420 --> 08:27.840 align:middle line:84% You can say, all right, so I'll be happy to give you a number. 08:27.840 --> 08:29.820 align:middle line:84% Let's set that aside for a few minutes 08:29.820 --> 08:31.320 align:middle line:84% and let's talk about what it's going 08:31.320 --> 08:32.877 align:middle line:90% to take to make a great deal. 08:32.877 --> 08:34.710 align:middle line:84% I mean, what looks like a great deal to you? 08:34.710 --> 08:36.730 align:middle line:84% What else do you have to have in order 08:36.730 --> 08:39.210 align:middle line:84% to make any price that I give you a good price? 08:39.210 --> 08:42.807 align:middle line:84% It's always good to prepare some things beforehand so 08:42.807 --> 08:45.390 align:middle line:84% that you're not caught off guard in the moment trying to think 08:45.390 --> 08:47.490 align:middle line:90% of what those things might be. 08:47.490 --> 08:50.700 align:middle line:84% And when you start to prepare that list beforehand, 08:50.700 --> 08:54.090 align:middle line:84% realize that it's really a brainstorming list. 08:54.090 --> 08:56.250 align:middle line:90% It's to trigger some thoughts. 08:56.250 --> 08:58.410 align:middle line:84% You really want to engage in brainstorming 08:58.410 --> 09:02.430 align:middle line:84% with the other side because nearly every circumstance, even 09:02.430 --> 09:04.630 align:middle line:84% in a one off negotiation, there's 09:04.630 --> 09:07.350 align:middle line:84% going to be some stuff that they could throw in that you 09:07.350 --> 09:09.000 align:middle line:90% might not know that they have. 09:09.000 --> 09:11.400 align:middle line:84% And if you engage in a collaborative brainstorming 09:11.400 --> 09:13.410 align:middle line:84% session, between the two of you, you 09:13.410 --> 09:16.235 align:middle line:84% may come up with some ideas, again, to make a great deal. 09:16.235 --> 09:18.360 align:middle line:84% Yeah, you can use this when you're buying your car. 09:18.360 --> 09:20.670 align:middle line:84% You can set the price off to the side for the moment 09:20.670 --> 09:22.620 align:middle line:84% because there's always going to be other inducements that they 09:22.620 --> 09:24.540 align:middle line:84% want to add and to get you to make that deal. 09:24.540 --> 09:26.778 align:middle line:84% You know, what kind of follow-up service do you want? 09:26.778 --> 09:29.070 align:middle line:84% What are they willing to throw in at this point in time 09:29.070 --> 09:31.370 align:middle line:90% to try to get their price? 09:31.370 --> 09:33.090 align:middle line:84% They're probably going to be a lot more 09:33.090 --> 09:36.900 align:middle line:84% flexible on the other terms, on the follow-up service. 09:36.900 --> 09:39.900 align:middle line:84% Free car when you come in for its routine maintenance. 09:39.900 --> 09:42.630 align:middle line:84% Do you get a rental car to drive around while you've 09:42.630 --> 09:45.840 align:middle line:90% got your car in their shop? 09:45.840 --> 09:47.670 align:middle line:84% What are the other maintenance add-ons 09:47.670 --> 09:50.557 align:middle line:84% that they might be willing to throw in to make the deal? 09:50.557 --> 09:52.140 align:middle line:84% And that's actually a really good move 09:52.140 --> 09:53.910 align:middle line:84% because people can get so focused 09:53.910 --> 09:57.917 align:middle line:84% on price that they forget that it's going to be the terms that 09:57.917 --> 09:58.500 align:middle line:90% make the deal. 09:58.500 --> 10:00.292 align:middle line:84% The price will break the deal, but the deal 10:00.292 --> 10:02.612 align:middle line:90% is made on the strict terms. 10:02.612 --> 10:04.596 align:middle line:90% [MUSIC PLAYING] 10:04.596 --> 10:08.570 align:middle line:90% 10:08.570 --> 10:11.330 align:middle line:84% Well, setting a range is a great way 10:11.330 --> 10:14.990 align:middle line:84% to not exactly name price first also. 10:14.990 --> 10:18.260 align:middle line:84% You can do a range of what's going on in the market. 10:18.260 --> 10:21.600 align:middle line:84% You can do a range of what you might be willing to pay. 10:21.600 --> 10:25.110 align:middle line:84% Understand that whenever you throw out a range, 10:25.110 --> 10:28.310 align:middle line:84% the other side is going to settle on the end 10:28.310 --> 10:31.040 align:middle line:90% that most favors them. 10:31.040 --> 10:32.960 align:middle line:84% Then I gotta compromise and meet you 10:32.960 --> 10:34.160 align:middle line:90% in the middle of that range. 10:34.160 --> 10:35.540 align:middle line:84% You threw out a range hoping they 10:35.540 --> 10:37.483 align:middle line:84% come in and pick the number in the middle 10:37.483 --> 10:38.900 align:middle line:84% because they're trying to be nice. 10:38.900 --> 10:40.340 align:middle line:90% That's not going to happen. 10:40.340 --> 10:44.210 align:middle line:84% They're going to pick the end on that range that favors them. 10:44.210 --> 10:45.950 align:middle line:84% You better be willing to accept that. 10:45.950 --> 10:48.630 align:middle line:84% If you come off of that, then they're 10:48.630 --> 10:50.460 align:middle line:84% going to be able to accuse you of bad faith 10:50.460 --> 10:52.507 align:middle line:84% bargaining for good reason because you 10:52.507 --> 10:54.840 align:middle line:84% gave the impression if you threw that number, that you'd 10:54.840 --> 10:55.542 align:middle line:90% take it. 10:55.542 --> 10:57.000 align:middle line:84% But a range is going to be dictated 10:57.000 --> 11:00.120 align:middle line:84% by two things, what's going on in the market 11:00.120 --> 11:02.620 align:middle line:90% and what you can pay. 11:02.620 --> 11:05.020 align:middle line:84% What you can pay may not line up with what's 11:05.020 --> 11:07.300 align:middle line:90% going on in the market. 11:07.300 --> 11:10.250 align:middle line:84% And there's always a possibility that other terms still 11:10.250 --> 11:13.070 align:middle line:90% might make your number work. 11:13.070 --> 11:15.740 align:middle line:84% And that's why the brainstorming with your counterpart 11:15.740 --> 11:19.070 align:middle line:84% is extremely important because there may be something really 11:19.070 --> 11:21.290 align:middle line:84% valuable that you could do that's not 11:21.290 --> 11:23.190 align:middle line:90% reflected in the market. 11:23.190 --> 11:25.310 align:middle line:84% Great collaboration, it creates success 11:25.310 --> 11:29.120 align:middle line:84% for both sides in the future is always valuable. 11:29.120 --> 11:31.790 align:middle line:84% So understand what your ranges are, 11:31.790 --> 11:33.986 align:middle line:84% what the market ranges are, and then go out 11:33.986 --> 11:36.048 align:middle line:90% and try to make a great deal. 11:36.048 --> 11:37.964 align:middle line:90% [MUSIC PLAYING] 11:37.964 --> 11:41.800 align:middle line:90% 11:41.800 --> 11:45.710 align:middle line:84% An anchor is a price that you throw out 11:45.710 --> 11:50.460 align:middle line:84% that's quite some distance from where you expect to land. 11:50.460 --> 11:53.960 align:middle line:84% So if you want to pay $100 for something, 11:53.960 --> 11:58.600 align:middle line:84% I may throw out right off the bat that I can pay $20. 11:58.600 --> 12:01.100 align:middle line:84% I'm going to throw something out that's quite some distance, 12:01.100 --> 12:03.440 align:middle line:84% gives me a lot of room to maneuver. 12:03.440 --> 12:08.060 align:middle line:84% Makes you feel like you won when you get me to my actual price. 12:08.060 --> 12:10.940 align:middle line:84% So you're going to get a lot of advice 12:10.940 --> 12:14.090 align:middle line:90% that you should anchor extreme. 12:14.090 --> 12:17.082 align:middle line:84% You should go high, you should go low. 12:17.082 --> 12:19.540 align:middle line:84% And people are going to tell you over and over again that's 12:19.540 --> 12:22.430 align:middle line:90% going to give you better deals. 12:22.430 --> 12:25.160 align:middle line:84% What it's really going to do is make a lot of deals go away. 12:25.160 --> 12:27.410 align:middle line:90% The terms make the deal. 12:27.410 --> 12:30.455 align:middle line:84% Make great deals, don't extreme anchor, 12:30.455 --> 12:32.330 align:middle line:84% and you're going to go a lot farther and have 12:32.330 --> 12:34.430 align:middle line:84% a lot more people doing business with you, 12:34.430 --> 12:36.965 align:middle line:84% and you will not drive deals away from the table. 12:36.965 --> 12:38.840 align:middle line:84% I'm more concerned with the emotional anchor, 12:38.840 --> 12:41.900 align:middle line:84% the emotional reaction to my price. 12:41.900 --> 12:45.740 align:middle line:84% If I go with a high price with no warning, 12:45.740 --> 12:49.550 align:middle line:84% the emotional reaction from you is going to be negative. 12:49.550 --> 12:53.420 align:middle line:84% Negative reactions leave a toxic residue 12:53.420 --> 12:58.063 align:middle line:84% that, by and large, long term, are bad for relationships. 12:58.063 --> 13:00.230 align:middle line:84% Now on the other hand, I will characterize my number 13:00.230 --> 13:02.750 align:middle line:84% before I throw it out because I want you to actually 13:02.750 --> 13:05.477 align:middle line:84% be relieved when I give you my number. 13:05.477 --> 13:07.310 align:middle line:84% So I'm going to say, look my number is high. 13:07.310 --> 13:09.350 align:middle line:84% Don't expect anything other than that to be high. 13:09.350 --> 13:11.600 align:middle line:84% It's going to be higher than you expect, probably more 13:11.600 --> 13:15.500 align:middle line:84% than you plan to pay, maybe more than you have. 13:15.500 --> 13:17.130 align:middle line:84% Now by the time I drop that number, 13:17.130 --> 13:19.670 align:middle line:84% you're not going to overreact to the number. 13:19.670 --> 13:22.310 align:middle line:84% It may still be more than you plan to pay, 13:22.310 --> 13:25.030 align:middle line:84% but you're not going to be mad about it.