It is unlikely that you will get through too many negotiations without facing a counterpart who tries to use threats to improve their own outcome. From a clear ultimatum – “Drop your prices by 15% or we’re taking our business elsewhere” – to a more subtle threat - “It would be a shame if details of this issue were to find their way to the press” - threats are used by negotiators to demonstrate their power and to claim value for themselves.
Expert negotiators need to both defuse a threat made by their counterpart as well as knowing when and how to make threats themselves.
How to defuse a threat
When a counterpart issues a threat to you in the negotiation, the first thing to remember is that, generally, threats represent the party’s best alternative if an agreement is not reached.
So, if you’re trying to collect payment on a debt, and believe you’ve got a rock solid case in court, you may threaten to sue me if you don’t agree to payment of a certain amount. For you, if you can’t get at least $x now, you’d be better off by going to court.
Every party in every negotiation has a best alternative so I can simply acknowledge that fact and try to get the negotiation back on track. “Of course you could sue us, and we feel we could sue you for the poor quality of the goods you but rather than focusing on that, we’d like to discuss how we can come up with a result today that saves both of us the time and stress of litigating this.”
If the threat keeps coming up, you may try another tactic to defuse the threat by testing it against how well it meets your counterpart’s interests or if it is realistic. For example, “I know you could sue us but we're offering to settle?” or “I understand you could sue us and our advice is that the recent changes to the legislation have changed the position around this and that we have no case to answer”.
How to make a threat
When I first started teaching negotiation, it was suggested to me that threats had no place in an interest-based negotiation and should be avoided at all costs. However, there are definitely times when introducing a threat into the situation can deliver you a better result and maybe move the other party away from a stubborn position and firmly back to the deal table.
Before launching a threat, it is useful to consider three key questions:
What’s my purpose? - Why am I considering this threat? If the answer is that you are angry and the threat is an emotional reaction to this action, the best plan is generally to avoid the threat. Anger is an emotion which can lead to poor judgement and risky behaviour. If anger is taking over, a better strategy is to take a break in the negotiation and give yourself time to calm down.
What could they threaten? – Think about what alternatives the other party could have that they have not raised. If their possible threats are bigger than yours, it may be best to keep yours to yourself.
Does the threat promote your interests? – Making a threat to harm or offend the other party is quite possibly going to do more damage to your position than leaving it unsaid. If your threat angers the other party and makes them less collaborative in the negotiation, your chances of getting to an acceptable outcome may have been reduced rather than enhanced. Is there a way you can frame the threat as something that helps their interest rather than hurting them? For example, “If your refusal to negotiate forces us to bankruptcy, it’s unlikely you’ll see much of the money you are owed but if we can work together to find a way to continue business and protect your future debts then we can work with you to promote your product in the market.”.
What is the “best” threat someone has used against you in a negotiation?
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