I recently read an article in HBR titled: Managing Yourself: How to Negotiate with a Liar, by Leslie K. John. In our world we assume that most people come into a dealership/store and think that the salespeople are the liars...when, from my experience, the customers are far from innocent in this respect.
Here are some of the key takeaways from the article:
- Encourage Reciprocity. Humans have a strong desire to reciprocate sensitive information... we want to match their transparency. A good way to kick start this is to be the first to disclose an issue of importance. This allows the other side to see you are being fair and more likely to disclose something to you. Overall we are building trust.
- Ask the right Questions. Most people lie by omission. We claim that "If the customer asked me, I would have told the truth." In a situation like this we want to make sure we are asking questions that can help uncover issues that can help strengthen your bargaining position...i.e. When was that last time the check engine came on in your car? What was the last repair you had to have done on the car? Were there any recommendations that you didn't have done at that time that I need to tell a customer about in the future?
- Watch for Dodging. People will answer a question that they wish you would have asked. If they don't want to answer the question they will steer their answer to answer a question they weren't asked. The best way to avoid this is write down questions then refer back to them to make sure you got your questions answered.
- Don't dwell on Confidentiality. People are more willing to talk to you and share information when you keep the tone conversational. When we start to ask questions and tell someone "I will keep this confidential" or "I will make sure your answers do not leave this room." This puts people on the defensive and either causes them to stop talking, or start lying on their answers
- Cultivate Leaks. Listen to the questions a customer asks. If they say "What would happen if I am late multiple months on my payments?" This is normally an indicator that they are expecting issues on being able to make the payments. We can encourage clients leaking information to us by giving them options. If we know a customer likes a vehicle we can propose either them buying the vehicle outright and the payment plan, and propose them leasing the vehicle to show a lower monthly payment. The option that the customer tells you they like will let you know their priorities and allow you to ask follow up questions and discover what the customer really wants.
What the author really drives home in this article is that lying surrounds us. We need to use better tactics, based in science, to bring about the best in both parties when we negotiate.