Alex Kouts (@akouts) is a teacher, adventure technologist, Chief Product Officer of Countable, and — as you’ll soon discover — quite savvy in negotiation. This is part three of a three-part series. Make sure to check out parts one and two!
What We Discuss with Alex Kouts:
- Why the post-mortem of the way a negotiation plays out rarely finds tactics to be responsible for the outcome — and what actually is.
- What we should remember about the human beings on the other side of the negotiation table in relation to our own ability to leverage a desirable outcome.
- The toolbox of tactics that opens up to us when we can put ourselves in the shoes of the people with whom we’re negotiating rather than focusing on our own emotions.
- Questions we can ask someone on the other side of the table to understand who we’re dealing with, what motivates them, and put them in a position to react to us rather than the other way around.
- How to better look outward rather than inward when under the stress of a negotiation in progress.
- And much more…
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During a negotiation, pay attention to your internal emotional experiences. How do you react to certain situations? How does new data affect you? What choices are made for you instead of you actively making the choice? We tend to judge the success or failure of a negotiation by the tactics that were used (don’t accept the first offer, make them reactive, get to no), but the real reason a negotiation goes the way it does is usually based on very human, internal factors.
Business developer, startup veteran, Countable CPO, and professional negotiator Alex Kouts joins us for this final, extended third episode of our three-part series to share his expert secrets of negotiation with those of us who feel a little squeamish at the prospect of getting a “yes” in a world that actually finds it surprisingly hard to say “no.” Here, we’ll review some highlights and dive deeper into advanced negotiation.
This is part three of a three-part series. Make sure to check out parts one and two!
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More About This Show
Professional negotiator Alex Kouts joins us for round three of this three-part series to share his best negotiation secrets! If you missed the first two parts, make sure to check them out here: Part One and Part Two
Negotiation Emotions vs. Tactics
When we do a post-mortem of how a negotiation played out, in most cases the tactics aren’t found to have made a difference, according to Alex. In truth, there are a lot more discreet human factors that affect our ability to effectively negotiate.
“When we’re reviewing a negotiation and it went after the fact, we always end up pulling out things that we understand or that are obvious to us, but it doesn’t necessarily mean they’re the real things,” says Alex. “The most important thing during negotiation, if you’re trying to get better at it yourself, is to really pay attention and look at your internal emotional experience. ‘How did I react to things that happened?’ ‘How did I react to new data?’ ‘What did that make me do?’ ‘What choices were made for me by virtue of the situation and the context that I was in as opposed to me actively taking a role in it?’
“In many cases the tactics can be important, but the bigger part of it, and the thing that stops us from being effective, tends to be what happens internally.”
And while it’s important to understand that our internal reactions play a large part in affecting the outcome of a negotiation, it’s also important not to overanalyze our own emotions to the point where good old-fashioned paranoia takes over. When this happens, we risk misinterpreting neutral intentions of the other party as something more than they really are and missing what might actually be meaningful data in the distraction.
Alex points out that people negotiating for a job offer often make the mistake of thinking they’re powerless to influence the outcome. The common reasoning is that they’re only one among many in competition for the job and they should be grateful for the opportunity and willing to accept whatever offer they’re lucky to get.
What gets overlooked in this reasoning is that the company is already investing the time and resources to find the best candidate and, if you’re among them, you’ve been found worthy of that investment — especially if you’re interviewing at a company that has a multi-level hiring process and you’ve made it beyond the first round. The people on the other side of the table are just as human as you and they have the same internal, emotional responses affecting their stake in the negotiation.
“There is some leverage there,” says Alex. “They’ve decided to invest in you — we just don’t think about it very often. And when we don’t, it makes it less likely for us to want to negotiate. We just psych ourselves out.”
By putting ourselves in the shoes of the people on the other side of that table, not only can we escape the trap of unworthiness that might be lurking in our own head, but we gain the perspective to see what it is they’re really looking for in us.
“By thinking a little bit less about my emotional experience and what I’m looking for, and more about the person on the other side of the table, a whole toolbelt of tools become available to me that makes it a lot easier for me to do this well,” Alex says.
Learn to Lead with Questions
“Often, someone will make you an offer and you feel the need to react to it,” says Alex. “I never react in the moment when anyone offers me anything. I always lead with questions: ‘Thank you; I understand the consideration. When do you need an offer by?’ ‘Is this negotiable?’
This tactic allows you to step back for a second, relax, get new data, and ask for new data from other people.
“Once you train yourself to do this, it forces you to look outward rather than inward,” says Alex.
Never Indulge Yourself
“I never react to offers, ever,” says Alex. “If the offer is three times what I’m expecting — it’s fantastic — I don’t act excited. I don’t go, ‘Oh, my gosh! That’s unbelievable!’ I’m not telegraphing emotions.
“My father used to say this thing growing up and I since had him paint this with graffiti markers and I framed it on my wall. It’s ‘Never indulge yourself.’ I think in a lot of situations like that, a lot of people have a strong feeling and they indulge themselves by expressing it to other folks; they need to get it out. They need someone else to get what they’re feeling.
“So in those situations, I think you need to play it slow. Play it smart. Don’t give an immediate reaction no matter what it is — if it’s three times you price, if it’s one-tenth of your price — ask some questions, ask when [they] need an answer by, consider it, and then come back.”
Asking questions like this not only buys you time to consider the offer, but it also shows respect to the person on the other side of the table.
Questions We Can Ask
Two of Alex’s favorite questions to ask people in a business setting — even outside of the context of a negotiation — are:
- What does a win look like to you?
- What keeps you up at night?
“It’s a great way for me to figure out how people are evaluating success, what their goals are, what they’re worried about,” says Alex, “because that gives me the bounds of the conversation. That helps me understand what their world looks like in a way that basic chit-chat is not going to do.”
When an offer has been made in a negotiation, Alex often asks:
- Is there any flexibility here?
“That’s a hugely important question, because in reality, I’m not asking for anything. I’m just throwing a layup to figure out exactly who I’m talking to. Because what are they going to come back with? They’re going to say “no” and risk seeming unreasonable; they could say ‘yes’ and then they’re basically inviting you to counter.”
It also forces the person on the other side to react to you rather than the other way around, which is a valuable negotiation tactic we learned in the earlier episode of this series.
Listen to this episode in this entirety to learn more about ways to extract additional data from someone in a negotiation simply by rephrasing or asking them to clarify what they’ve already said, examples of clarifying questions, how to better look outward rather than inward when under the stress of a negotiation in progress, how to accurately gauge the emotional telegraphing of others without misinterpreting their signals, how you can benefit from being media trained even if you don’t ever plan on being the public face for your organization, the empowerment gained by testing boundaries, and lots more.
THANKS, ALEX KOUTS!
If you enjoyed this session with Alex Kouts, let him know by clicking on the link below and sending him a quick shout out at Twitter:
Click here to thank Alex Kouts at Twitter!
Click here to let Jordan know about your number one takeaway from this episode!
And if you want us to answer your questions on one of our upcoming weekly Feedback Friday episodes, drop us a line at firstname.lastname@example.org.
Resources from This Episode:
- Alex’s Pre-Negotiation Worksheet
- Alex at Twitter
- Never Split the Difference: Negotiating As If Your Life Depended On It by Chris Voss and Tahl Raz
- TJHS 30: Vanessa Van Edwards | How to Captivate with Social Cues
- TJHS 57: Phil Hellmuth | The Winning Strategies of a Certified Poker Brat
- Fashion TV
- The Greatest Scene from Ex Machina
Transcript for Alex Kouts | The Secrets You Don’t Know About Negotiation Part Three (Episode 76)
Jordan Harbinger: [00:00:00] Welcome to the show. I'm Jordan Harbinger. And as always, I'm here with my producer, Jason DeFillippo. In today's conversation, my good friend, Alex Kouts is back with Advanced Negotiation Tactics. This was a fun one because, well one, Alex was so tired that we were both a little delirious, which always makes for a good show. But this is stuff that he hasn't taught much in any classes. This is stuff that's not documented anywhere. This is all the kind of like the psychology stuff in a way that sort of hard to teach and explain, I guess you might say, that really does make a huge difference in negotiation. We do cover, again, some of the basic fundamentals one more time, just to sort of plug everything in. But there's a lot of new stuff here that I had never heard, which I think is great. And I ran this by some other negotiation experts, lawyers, and people like that and they were like, “Oh yeah, this is something I hadn't heard.”
[00:00:48] So even if you sort of thought, “Well you know, I'm pretty good at negotiation,” which I love when I get emails like that, “I'm already good at all the things you teach.” Really? You're 22. Really? So I love this episode. I think it plugs in great with the previous two. And I think Alex really, really needs to make a course with us like a formal teaching course. And so we're going to get that going at some point as well. And by the end of this show, you're really going to know how to turn the screws on an opponent in negotiation, make everybody feel like they won at the end of that negotiation and get some drills and exercises to make sure that you're honing your negotiation skills at all times. This is the final piece of this series as well. And if you enjoyed the other two, including this one, please rate and review the Jordan Harbinger Show in iTunes and recommend it to friends because we are starting that whole reviews process over again and we need to regain that audience. And so you're a key part of that.
[00:01:46] So my negotiation tactic is to beg for ratings and reviews. If you liked this series as well, and thanks so much to all the people that shared it. Don't forget we have a worksheet for today's episode so you can make sure you solidify your understanding of all the key takeaways here from Alex Kouts. That link is in the show notes at jordanharbinger.com/podcast.
[00:02:06] By the way, I've been teaching networking. It's been the number one lever in my life for personal and professional. When we had to rebuild the business, my network was there. It's the reason we're back at over 5 million downloads a month. It's a reason we were picked as Apple’s Best of 2018. It's the team, it's the network, it's the people around you. And I created a free course to teach you how to consistently engage and reach out to people in your personal and professional network. It's free. I just look, this is not one of those things where it's like, enter your credit card number. This is free. I want it to change your life. That is what it's, that's the whole point. And it's called Six-Minute Networking. If you were in the old one LevelOne, it replaces that. It's new and improved. Six-Minute Networking and it's at jordanharbinger.com/course. That's jordanharbinger.com/course. See you in there.
[00:02:54] All right, here's Alex Kouts. Thanks for coming in, man. I know you had a rough night.
Alex Kouts: [00:02:58] Yeah, that's an understatement.
Jordan Harbinger: [00:03:01] Yeah. So look, unless somebody else's appendix or other organ bursts, we'll try to get through a show on negotiation. Tell us again who you are, because a lot of people might not have heard Negotiation Part One and Two, which were massive hits on the Jordan Harbinger Show. So just in case someone's joining us right here.
Alex Kouts: [00:03:19] Yeah. So, my name is Michael Jordan. I play professional basketball for the Chicago Bulls. No. So my name's Alex Kouts, and I'm a professional negotiation teacher. I advise companies and teach folks all over the country about negotiations, help them think through difficult problems and I love it. It's one of my favorite passions and pastimes, working through hard, difficult human problems through the form of a tactically applied negotiation strategy on stuff.
Jordan Harbinger: [00:03:44] Good. And of course, I want to do, I want to do a whole course on negotiation with you at some point that we turn into a product. But until then I just want to make sure that we exploit what's in your brain for use here on the show. Part one and two are really in depth. I know you said you were your own harshest critic and that they were too dense. I don't know. I've found them to be really useful. A lot of other people did too, but yeah, sure. Let's do advanced negotiation. And then while we do advanced negotiation, we'll also simultaneously make it less dense.
Alex Kouts: [00:04:14] That sounds good.
Jordan Harbinger: [00:04:15] If that's even possible.
Alex Kouts: [00:04:16]Yeah.
Jordan Harbinger: [00:04:16] All right.
Alex Kouts: [00:04:17] That sounds good. Let's do it.
Jordan Harbinger: [00:04:18] So where do we start?
Alex Kouts: [00:04:19] The kind of Genesis of this conversation is I've been teaching negotiation tactics for years now and one of the things that I've found is that often I can teach people all the right things to say or do inside of negotiation. A lot of mistakes that they put may just say, “Okay, don't do that one thing or do this thing,” but the truth is when you do a postmortem of how a negotiation plays out, in most cases, the tactics don't actually make the difference. There's a lot of more discrete human things that affect our ability to effectively negotiate, and you know, I've been thinking for a while of creating a separate curriculum just for this more kind of behavioral psychology applied to negotiation tactics. That's what we're going to talk about today. Those human things that get in my way, they make it harder for me to actually do this well.
Jordan Harbinger: [00:05:00] Okay. When we say human things, of course, we're going to get into some actual concrete examples, but you're talking more about behaviors, or our human flabels that interrupt the process rather than-
Alex Kouts: [00:05:11] Flabels.
Jordan Harbinger: [00:05:11] Yeah.
Alex Kouts: [00:05:12] I like that.
Jordan Harbinger: [00:05:12] You like that? Yeah, but it's because I think a lot of people are like, “Oh, you know what the problem was?” “You set the price first and you're never supposed to set the price first,” and it's like, “Okay, maybe that was part of it,” but the other thing was that you feel like you're lower social status so you let this guy steam roll you or something.
Alex Kouts: [00:05:28] Yeah. I mean, you know, when we're reviewing a negotiation, how it went after the fact, we always end up pulling out things that we understand or that are obvious to us, but it doesn't necessarily mean they're the real things. I think the most important thing during negotiation, if you're trying to get better at it yourself, is to really pay attention and look at your kind of internal emotional experience. How did I react to things that happened? How did I react to new data? What did that make me do? What choices were made for me by virtue of the situation and the context I was in as opposed to me actively taking a role in it? I don't think a lot of people think about that. I think they more focused on, “Well, what was your offer?” “Oh, that's too high.” Well maybe, and in many cases the tactics can be important. But again, the bigger part of it and the thing that stops us from being effective tends to be what happens internally inside of us.
Jordan Harbinger: [00:06:09] Okay, so where do we begin then with learning this? Because I think a lot of people were like, “Well, I understand all of the things that happened in my negotiation,” or we think we're more self-aware, or maybe we don't think we're self-aware, but we also don't know where to start looking for these sort of internal states that are affecting our negotiation.
Alex Kouts: [00:06:27] Well, I think we have the answer in that paragraph, that the first place you start is by looking inward a little bit, but not too much. That's the problem. So a lot of times people in a negotiation focus very heavily on their internal monologue as opposed to other people. So they're beginning to view every piece of new data that comes in. Every action the person takes, every piece of communication through the lens of their own feelings and emotions. So if I'm alarmed and I'm worried and someone says some very banal normal thing, I may interpret that as a little bit more intense than it actually was intended to be because my emotional context is really intense. I'm really, I'm really constricted. So when we do that, when we look internally too much, we end up missing a lot of things. And we shut out a myriad of other data and important factors that can affect how the negotiation should go. So let's give an example to make it more tangible.
[00:07:14] So, in a job offer scenario, I've worked with a lot of folks who are negotiating a job or a salary and one of the things you hear is most folks think that they don't have any leverage. The jobs been offered to them, they're one of a thousand people they could go to, that they should be grateful for this opportunity, and that there's no possibility for them to negotiate, which is just a false idea, patently. It's a bad idea to believe that. But you know, we're not often thinking of the other side of the table. So imagine what happened, right? So I interviewed at a company, maybe three to 10 people at the company interviewed me. That means they spent a significant amount of money and resources and opportunity costs of those people working on other things, spending time with me, figuring out if I'm the right person. They all felt good enough about me. Chances are I'm not the only person that they've interviewed. They probably said no to a couple other people. And so everybody felt really good about me. They said, “Okay, we want to hire this person.” They hand that hiring recommendation over to the hiring manager or the HR representative and say, “Get this person in the door.”
[00:08:09] So imagine the person that you're talking to is dealing with the upstream pressure of every single other person on his or her team who've already said that they want you and their job is just gets you in the door. So really it's theirs to lose at this point. There's not a lot of upside for them. So we don't think about the emotional experience of the HR representative when we're negotiating a job offer. We only think, “Oh gosh, I should be grateful. I don't want to be presumptuous in negotiating this.” We're only thinking about ourselves. So if we look outwards and we say, okay, then five to 10 people invested their time, they signed off on me, the opportunity cost is there for again, the time they invested in interviewing me and spending time reviewing me, all that kind of stuff. And now I've gotten an offer. Great. But that being said, it's going to be hard for them to find someone else to replace me, maybe. Or they're going to have to go back into a hiring pool or go to their second chances. So there is some leverage there. They've decided to invest in you. We just don't think about it very often.
Jordan Harbinger: [00:09:03] Sure. Yeah.
Alex Kouts: [00:09:04] And when we don't, it makes it less likely for us to want to negotiate. We just psych ourselves out.
Jordan Harbinger: [00:09:08] I think that's really true. And I think also even in tech, where you go, “Well, wait a minute, this is Google. Look at this crazy hiring process.” They're really screening for the best people. I don't have any leverage. It's actually kind of the other way around, right? The more intense the screening process, the more leverage you probably have because that's the more resources the company has spent getting you through 10 levels of BS or whatever to get there in the first place.
Alex Kouts: [00:09:32] Yeah. And specific to the Bay Area, and also many major commercial or tech hubs, the competition for talent is outrageous. So let's just say, and this is obviously not a indicative of the entire country, but let's just say someone gets an offer to work at Google. That person can go to Facebook and say, I got an offer from Google. You should consider me for a role. And often that will at least start a conversation. So the environment is so hyper competitive that people can just walk out the door with an offer to somewhere else and accelerate the hiring process with a different company. But the point is, there is significant competition for good people. Good people are the hardest thing to find. And as someone who's built teams and companies before, people make all the difference. You think it's company strategy? It isn't. It's people who take ownership and accountability for the business. So HR managers know that, companies know that, and we have more leverage than we think.
Jordan Harbinger: [00:10:18] How do they know that you have an offer from Google? If you're at Facebook?
Alex Kouts: [00:10:22] You'd have to tell them.
Jordan Harbinger: [00:10:23] Okay. And that's it?
Alex Kouts: [00:10:24] Yeah. Yeah. So sometimes you can just shop your offer around the different places. I've seen number of engineers do that specifically, but again, the competition for engineering talent out here is pretty outrageous.
Jordan Harbinger: [00:10:33] It just seems like it would be really easy to go, “Hey look, I've got an offer at Facebook.” And they're like, “Oh really? Okay, I'm just going to take your word for that. And accelerate the hiring process here at Google.”
Alex Kouts: [00:10:43] Yeah, yeah. Maybe they, maybe they would. Maybe they wouldn't need to see something written.
Jordan Harbinger: [00:10:46] Don't do that, by the way.
Alex Kouts: [00:10:47] Okay. Don't do it.
Jordan Harbinger: [00:10:48] Nobody should do that. If you get caught, you're going to be, it's not good.
Alex Kouts: [00:10:51] Imagine someone who works at like a tire store is going to take their offer to Google's HR offices now. There's something that—
Jordan Harbinger: [00:10:57] I worked at Canadian tire.
Alex Kouts: [00:10:59] That's right.
Jordan Harbinger: [00:10:59] I've got an offer for a promotion. Don’t sleep on this.
Alex Kouts: [00:11:02] Let’s listen to this. So another great example is a car salesman, right? So let's say I'm going to buy a car. The car salesman comes and does kind of his or her song and dance about rebates or good deals or pre-negotiated and all that kind of stuff. This is a really rare car or whatever. But we never really often think about where they are. We think about what we think is a good deal. The car, we want the little intangibles, the emotional part of our journey with negotiating car. But consider on the other side of that, the salesperson most likely has a quota. Most likely hasn't hit that quota because quotas are always pushed really high. That's how sales teams are managed. They don't want really easily achievable quotas.
[00:11:36] So when you're negotiating your car, if I internalize that, I go at the end of the month before, their quota is about to close, at the end of the week. So it looks like they can just do one deal that's going to push them over the edge closer to that quota. So by thinking a little bit less about my emotional experience and what I'm looking for, more about the person on the other side of the table, a whole a tool belt of tools become available to me, that makes it a lot easier for me to do this well.
Jordan Harbinger: [00:11:58] What are some of these tools that we're looking for, or that we're working with?
Alex Kouts: [00:12:01] Yeah, so let's get tangible. So how do we actually do this? How do we begin to look outward as opposed to inward? Well, the most important thing and what I've learned in business time and time again is learn to lead with questions. Often someone will make you an offer and you feel the need to react to it. If you say, “Wow, that's too low,” or “Wow, that's too high,” or “I don't know about that, or I'm not ready.” I never reacted in the moment when anyone offers me anything. I always leave with questions. “Okay, got it. Thank you.” Understand the consideration when you need an offer by, is this negotiable. And those types of things begin to open things up a little bit. It allows you to step back for a second, relax, get new data, ask things of other people, and once you train yourself to do that, it forces you to look outward. So whenever an offer comes in, whenever a negotiation scenario presents itself, always learned to lead with questions.
Jordan Harbinger: [00:12:48] That's interesting. So you never actually, and I put never in air quotes because there's always going to be some random exception, but essentially you just say thank you. And then immediately launched into when by when do you need an answer? What other considerations might there be? Blah, blah, blah. And because you're right, it is tempting for me to go, “Oh, okay, great, super.” That sounds okay, but now I'm not sure. “Shoot, I shouldn't have said that was okay, because then they might think that it is okay, but I want to negotiate it. Now what do I say?” “Well, it's pretty low.” I didn't really mean to say that either. That sounds kind of bad.
Alex Kouts: [00:13:22] No, I never react to offers ever. If the offers three times when I'm expecting, it's fantastic. I don't act excited. I don't go “Oh my gosh, that's unbelievable.” I don't do that kind of thing. I'm not telegraphing emotions. Yeah. My father used to say this thing growing up and I since had him paint this with graffiti markers and I framed it on my wall. It's “Never indulged yourself.” I think in a lot of situations like that, people have a strong feeling and they indulge themselves by expressing it to other folks. There's other reasons for it, but they need to get it out. They need someone else to get what they're feeling. So in those situations, I think you need to play it slow, play it smart. Don't give an immediate reaction no matter what it is. If it's three times your price, if it's one-tenth of your price, ask some questions. Ask when they need an answer by, consider it and then come back.
Jordan Harbinger: [00:14:07] Which questions? When do you need an answer? What else?
Alex Kouts: [00:14:09] Yeah, when do you need an answer by? That's a great one, but real quick, the other real reason that you want to ask questions like this, it also gives the other side the sense that you're considering the offer. So even if it's an obvious answer to you one way or the other, by stepping back and saying, “Okay, I'm going to think about this, and then I'll get an answer back to you.” That actually showing the other person respect. That's the respect of considering the offer. Even if you know what you're going to do immediately. So it's not just for your own purposes, but it's also for theirs.
Jordan Harbinger: [00:14:36] It sort of makes the other person feel like an equal participant maybe in what's going on, instead of just reacting to your reaction. It's funny, the whole getting excited or not getting excited. Do you ever see Big with Tom Hanks where he gets his paycheck and he said, “187 dollars. Yeah!” And he's like jumping up and down in his cubicle.
Alex Kouts: [00:14:54] Yeah. I love that movie.
Jordan Harbinger: [00:14:55] Yeah. Yeah. I can see a lot of people seeing their first offer at a Wall Street law firm, and basically jumping out of the chair and going, I can't believe, that's how I felt when I got my first offer and I didn't dare negotiate that thing, I was like, “Yes, I'll take the job immediately.”
Alex Kouts: [00:15:10] Love it. So yeah. So you asked the question before, what are a couple of questions that we can ask in a business context and make it a little bit easier? Well, two questions that I always ask in pretty much every business meeting I ever have, especially first meetings is what does a win look like to you? And what keeps you up at night? This is outside of just a pure negotiation context, but it's a great way for me to figure out how people are evaluating success, what their goals are, what they're worried about. Because that gives me kind of the bounds of the conversation. That helps me understand what their world looks like in a way that basic chitchat just is not going to do.
Jordan Harbinger: [00:15:40] That's good. It also teaches you what maybe buttons or levers to pull later on, but it does bear repeating that this is contextual, right? Because they don't say we're willing to offer you 87,000 dollars plus an annual bonus and you're like, what keeps you up at night?
Jordan Harbinger: [00:15:54] Right. Maybe not appropriate for that situation.
Jordan Harbinger: [00:15:56] Maybe not.
Alex Kouts: [00:15:56] Yeah. I mean in an offer scenario like that, the question that I always come back with is, is there any flexibility here? That’s a hugely important question. Because in reality, I'm not asking for anything. I'm just throwing a layup to figure out exactly who I'm talking to. Because what are they going to come back with? They're going to say no and risk seeming unreasonable. They could say yes and then they're basically inviting you to counter. So in a job offer scenario with my classes, I script responses for people, I said, “Okay, here's your offer and here's the response. Here's what I would say.” And my response to every job offer is, “Thank you so much for the consideration and the offer. I really appreciate it. I'm very excited about the team and blah, blah, blah, blah. I want to consider this amongst other opportunities I'm looking at as I'm doing that. I would be helpful to know is there any flexibility in the terms or is there any flexibility in the base salary?” That changes the entire pace of the negotiation. Now they are reacting to me as opposed to the other way around.
Jordan Harbinger: [00:16:48] Yeah. That's great. That's great. I think we covered a little bit of that in part one and two, memory serves.
Alex Kouts: [00:16:55] Yeah. I think we did it.
Jordan Harbinger: [0:16:55] But it does bear repeating because I think a lot of people, myself included, have never used that tool.
Alex Kouts: [00:17:00] Yeah. We talked about it in a tactical sense of this is what you should actually do. But here, we really want to focus on as the reasons why we're doing it. We're doing it because it allows you to look outward. It gets you out of your internal monologue a little bit and create some distance for you to begin to make better choices.
Jordan Harbinger: [00:17:14] Why? Just explain to me like I'm five, is it so important for us to get out of our head and get away from our internal monologue? And be in their world a little bit more.
Alex Kouts: [0:17:24] It's a cosmic question, right? Because the truth is -- all the variables and all the information that you need to effectively navigate the situation are going to come from other people.
Jordan Harbinger: [00:17:32] Yeah, that's true.
Alex Kouts: [00:17:32] It's going to come from how they're reacting, how they're feeling. It's not going to come from you. So if it's like 90 percent internal data, 10 percent external data, you're going to make a bad decision.
Jordan Harbinger: [00:17:41] Right. Because you're 90 percent of what you're using to weigh in is irrelevant to the actual situation.
Alex Kouts: [00:17:48] Exactly. It doesn't make any sense if you think about it logically, but we don't think about it logically.
Jordan Harbinger: [00:17:52] No.
Alex Kouts: [00:17:52] We think about it emotionally.
Jordan Harbinger: [00:17:53] Yeah.
Alex Kouts: [00:17:54] Yeah. And you know, part of that is a rule and that's okay. Everybody's emotional. We all feel emotions all the time. Even sociopath's like you and me, constantly feel emotions.
Jordan Harbinger: [00:18:03] Psychopath, but you know who's -- let's not split hairs.
Alex Kouts: [00:18:05] Yeah, obviously right. Totally. I'm sorry, I didn't mean to insult you there.
Jordan Harbinger: [00:18:09] Yeah, don't throw me under that bus.
Alex Kouts: [00:18:10] Right. But no, everybody feels emotions. And you know, that's one of the things that I think is important to cover here as well. Don't just imagine that the other side of the table has constraints and goals and interests and all kinds of things. Imagine that it is an emotional person going through an emotional journey that are probably just as scared and hate negotiations or scared negotiations as much as you or anybody. And imagine that they're not a monolith. You're not negotiating against a brick wall. It's a soft human, and that helps. It takes away some of the pain versus, I think I'm negotiating against some like inhuman difference engine. That's a really intimidating prospect.
Jordan Harbinger: [00:18:44] Yeah. No kidding.
Alex Kouts: [00:18:45] But if there's a human sitting on the other side of the table that has flexibility and has an emotional narrative that's a little bit more helpful.
Jordan Harbinger: [00:18:51] Yeah. I wonder how that would've panned out. I always think about this now, that we've done this course. I'm like, “Well, if I had gotten my Wall Street first year out of school job, and tried to negotiate, they probably would have said, “Why do you need more than what we're offering you?” And if I had had any sort of credible real reason for that at all, like “Look, I'm taking care of elderly parents, and I've got a dog with special needs or something like any sort of reasonable, I don’t know if that one's reasonable, but some sort of reasonable, they probably would have been like five grand a year. “Oh yeah, sure. Okay, fine.” I mean we need you to work here. So it's Wall Street five grand a year. Okay. “Can we sign it now?” I don't know one person that would've negotiated out of school because we thought like, “Are you kidding me? I need this job so effing bad right now. Are you insane? I'm not jeopardizing this.” But what they don't realize, what I didn't think about back then was they called me before my freaking plane landed back in Ann Arbor to offer a job after basically eating lunch with two partners and then like some five minute conversations.
Alex Kouts: [00:19:54] Yeah, and five grand. I mean they'd probably spend that on like hand soap for their like extra bathroom.
Jordan Harbinger: [00:19:58] That was like twice the price of the lunch that we actually went to with the two partners anyways.
Alex Kouts: [00:20:02] Oh yeah, yeah. So a couple of other things to use in situations like this. Just questions you can ask yourself. Let's say I'm sitting down again to the negotiation table and we're negotiating you and I. And I want to ask myself questions they're going to help me get outside of my internal monologue. I can think of things like, “Okay, let me not pay attention to what this person is saying. Why do I think they're saying what they're saying?” And that sounds like a basic and obvious question, but it's amazing how infrequently we actually sit down and say, “Okay, what is their motivation for saying that specific thing?” Not what is my general emotional context and what am I feeling holistically from the person, but why did they say that specific thing? How does it benefit them? So what's their motivation? What do they gain? How are they evaluated? How many deals did they do? What frequency with which they have these conversations? All those things can really affect it.
[00:20:46] So those questions are good to ask. And the other last thing I would say is that, and this is going to be a consistent thread through all the classes, the two podcasts we did before and this one as well, is that doing pre-work really helps here as well. So I think we shared a pre-worksheet on the website or will for some of these courses, and really what it walks through with everything that I need to know before walking into a negotiation.
[00:21:08] And as I mentioned before in the previous show, I don't print out and fill out that sheet every time I walk into a negotiation. But it has created this mental rigor that every single time I walk into a negotiation, I've gone through all those things and I've checked all those boxes. So I've asked myself what are their interests? What are they trying to accomplish here? How do I fit in their grand scheme of what a win looks like for them, right? What keeps them up at night? What are their alternatives? What are my alternatives? What price am I looking for? So by knowing all those things, by taking the time to research and think about it, you put yourself in a much better position to be able to think outwardly.
Jordan Harbinger: [00:21:40] That seems extremely useful. Not even just in the context of negotiation, but in general, whatever we feel like maybe we're having an emotional reaction. The question technique might not always be appropriate, like if we're talking to a kid or your significant other, but it might also really work well with your, I'm going to try that next time Jen and I get into it. Just instead of reacting, I'm going to start asking questions, Jen. She’d be ready for those questions.
Alex Kouts: [00:22:04] You know, it's --
Jordan Harbinger: [00:22:05] She's shaking her head like, good, bring it.
Alex Kouts: [0:22:07] Oh no.
Jordan Harbinger: [00:22:07] Come at me, bro. She's in fear of questions.
Alex Kouts: [00:22:10] I'm never coming back on the show. That's what's happening. No, but I mean, it's huge. I've done a bunch of user experience research in my career where when you're building digital products, you sit down with prospective users and you investigate their needs and what they're looking for, and you really try and learn deeply about it and not throw too much of yourself and in the conversation that can aberrate or distort their responses.
[00:22:30] So by doing that, you learn how to listen actively and ask probing questions. So one of the most useful things, and we'll talk about this a little bit more later, is once someone tells you something, ask clarifying questions, even ask them to rephrase it. There's all kinds of interesting data that can come from people rephrasing things they've already said, even though it can seem a little bit laborious.
Jordan Harbinger: [00:22:47] Okay. What type of questions might be clarifying. Do you have any examples off the top of your head that are generic enough to apply in a lot of places?
Alex Kouts: [00:22:56] Yes. So not specifically. Only because the question shouldn't be written ahead of time. It should be a reaction to what's been said in the conversation.
Jordan Harbinger: [00:23:03] Yeah. I guess that's what a clarifying question has to be.
Alex Kouts: [00:23:05] Exactly. So I will say in a conversation though, so you mentioned the word clarifying question a moment ago. Can you explain a little more about what that is? So I'll take specific keywords that they mentioned in responses and I'll ask them to give me a little bit more information on it. Can you clarify it? Can you put that in context for me? So things like that tend to help out a lot. Pick specific things and ask more information about that specific thing. And if they said it previously in conversation, even better.
Jordan Harbinger: [00:23:27] I feel like that's basically my entire job.
Alex Kouts: [00:23:29]Yeah.
Jordan Harbinger: [00:23:30] Yeah. I should've, I should've probably been better at that. But now I know. All right, what's next?
Alex Kouts: [00:23:35] So the first one just to review is learning how to look outward. Now very closely tied to that is the idea of emotional control. So in a negotiation you are by definition under duress for the most part. If you're negotiating for a job, you're worried about not getting that job, you're worried about losing that opportunity, you are concerned, you are under the spotlight. So it's basically our inability to control our own emotions, the detriment of our effectiveness, and even approaching a negotiation in the first part.
[00:24:03] So let's give a couple examples of what that looks like. So everybody knows this feeling. We probably had recurring dreams about this feeling. But when you feel the real sense of anxiety and you can just feel that like cold hand crawling of the back of your neck, over your skull and you just feel the physical effects of like anxiety and duress and stress, especially when you're in negotiation, that's extremely common. Sometimes we feel in our stomach, very commonplace to feel it. Even myself, I speak publicly all the time and sometimes I get like rumbly stomach before I do it. And I've spoken thousands and thousands of times in front of people, but I still get it every single time. I've recognized where my emotional responses, or my physical response to emotional stresses.
[00:24:40] So the first step is just kind of recognizing that kind of thing. But in reality, this feeling of emotional control, you can feel like you're under attack sometimes even when you're not. So because I'm in an uncomfortable situation, I have this higher tendency or propensity to just assume that things are happening to me in a negative way. So I've seen people in negotiations who get a really basic offer that they're not happy with. Think, “Well, I'm obviously being discriminated against because of X, Y or Z.” Or “Oh, I'm obviously being a, you know, treated with less respect than I should be treated for X, Y, and Z.” Now sometimes that may be the case and you have to judge that in an individual scenario. But often we run to situations like that to feelings like that as a reflection of how we're feeling emotionally rather than data that's actually happening in the real world. But again, you have to judge that on a case by case basis.
[00:25:27] So I've seen countless people destroy potential negotiation deals, because of emotions, that feeling that they need to defend themselves and display strength because they've been, you know, hit, so to speak. And I think that's a really important thing to be aware of in ourselves when we have that response. If you begin to feel like we're being discriminated against, we have to really diagram it. Is this real? Is it just the situation? Would this be happening to somebody else and make a fair judgment one way or the other?
Jordan Harbinger: [00:25:52] Like what does that look like in practice?
Alex Kouts: [00:25:55] Let's say I get an offer. So the early part of my career, one of the reasons I have this beard that I have now is -- in my early part of my career, I was managing people that were older than me.
Jordan Harbinger: [00:26:03] I was going to say, because you have a baby face.
Alex Kouts: [00:26:05] That's right. My eyes are huge. So when I shave I look like I'm 12. So this is like a --
Jordan Harbinger: [00:26:09] A really tall 12-year-old.
Alex Kouts: [00:26:10] It's legally required for me to wear this.
Jordan Harbinger: [00:26:12] Okay. So I can drive a car. But early in my career I had a bit of a chip on my shoulder, it was an insecurity that I had because all the people around me, even some of the people I was managing were significantly older than I was. And so frequently over the course of the day, people would say really normal stuff to me. Like they'd asked me a question or they pushed back on something.
Jordan Harbinger: [00:26:29] Hey, do you know the Macarena?
Alex Kouts: [00:26:30] Yeah, exactly. And I'd be like, “You wouldn't ask me that if I was older.”
Jordan Harbinger: [00:26:33] Yeah.
Alex Kouts: [00:26:33] I was like really worried about my age. And so I began to interpret everything through this lens of my emotional experience and I had the wrong view of the world. So I had to work really hard to be aware of when I was doing that so that I didn't basically turn myself into a raving lunatic or a total asshole, which you know, it starts with being aware of yourself. That's the first step.
Jordan Harbinger: [00:26:53] I can only imagine what people are asking you that triggered that. Like, “Hey, did you see the new Star Wars?” “Why?Because I look young.” “Yep, see you later.” I mean.
Alex Kouts: [00:27:02] Pretty much, I mean functionally it was whenever I'd recommend a course of strategy or something like that, I get a lot of pushback. And we all get pushed back. It's normal, and it's actually very healthy. You want people to push back on ideas. That's how you get to better ideas. But I would always assume that their pushback was a reflection of the level of respect they had for me or my age or something like that. And I would say probably 90 percent of the time I interpreted it as something about my age. It had nothing to do with that at all.
Jordan Harbinger: [00:27:25] Right. You're like, in 19 months when this beard grows out, you guys are going to stop treating me this way.
Alex Kouts: [00:27:29] That’s right. The second I get my learner's permit, you guys are going to get in line. But no. So these things are important. I think, you know, another way that this manifests, if we're not able to control this emotional aspect of our experiences, we end up saying yes to things we don't want, or not being able to say no to things that I don't want. That's really dangerous.
Jordan Harbinger: [00:27:47] Yeah, that's a problem.
Alex Kouts: [00:27:48] Yeah. I see that all the time. I see people offered things that they would have said in an isolated scenario they would never take, but because someone is asking them to their face, they're like, “Yes, all right, fine. Let's do it.” Because they want to keep that social equilibrium. They don't want to have the difficult conversation. And again, that's one of those things that governs the outcomes of negotiations more often than we would think. Our inability to manage our own emotions creates bad decisions like that. It makes us say yes to things we don't want or not be able to say no to them. Very, very important to be aware of.
Jordan Harbinger: [00:28:16] Yeah, that can be really dangerous. I had a former business partner with like no assets. Be like, “Hey, we need you to co-sign this loan.” And I was like, “Uh, I kind of feel like I have to say yes to this.” And then luckily I did not do that because eventually I was like, this is just causing too much anxiety because I know it's a bad idea and I would run it by friends and they're like, “Do not do that.” And then finally I was like, “Okay, I can't ignore this anymore.” But I could just as easily like had I been in a vacuum, and that decision needed to be made in that room, I could have just been like, “Sure, where's the pen?” I want this feeling to end.
Alex Kouts: [00:28:53] Yeah. No, totally. So one other example here. One kind of tool you can put in your tool belt before we talk about how to combat dealing with emotional distress issues -- is people are constantly telegraphing their emotions. I spend a lot of times we've talked about in previous shows at the poker table. And the poker table, you are almost like required to look at everything everybody is doing because you think you're going to be pulling in tells all the time. In reality that happens less often than people think. It's more betting patterns and other things, but you're like, “Wow, he touched his face like you did this thing.”
Jordan Harbinger: [00:29:23] There's a teardrop of blood coming out. It means he is awakened.
Alex Kouts: [00:29:25] Exactly. Exactly. That's his tell. He always bleeds. But you know, the interesting thing is in daily conversation, outside of that context, people are constantly telegraphing their emotions.
Every single time I feel distress, you can see it on me. I'm touching my face, my hair, I'm self-soothing by, you know, crossing my arms in front of my body. I'm rubbing my shoulders. I'm doing the fig leaf, putting both of my hands crossed in front of my body, covering my cash and prizes, right?
Jordan Harbinger: [00:29:52] Yeah, cash and prizes. I haven’t heard that in a while.
Alex Kouts: [00:29:55] That's me telegraphing I'm very nervous, right? That's what little kids do when they're in trouble.
Jordan Harbinger: [00:29:59] Right.
Alex Kouts: [00:29:59] And so people are constantly screaming to tell you what their emotional responses. And once you start paying attention to it, once you start looking at it, you can see incredible things. And we'll talk about that a little bit more in a minute, how to gauge that with more direct information. But you know, it's not just our body language, people are screaming their emotion and their inflection, which we're going to talk about a bunch as well, so you know it's not just enough to understand my emotional response and account for it. Also recognize what you're doing with your body and how you're telegraphing your emotions to other people because that can then affect their response to you. If I look like I'm super worried about things, or I shut down or I'm being very protective or self-soothing with my body language, other people can either knowingly or unknowingly respond to that by either shutting down, walking away, wanting to back off of the conversation. Our emotional response manifests physically, not just internally.
Jordan Harbinger: [00:30:46] I agree with that, we've talked about that a few times on the show as well, that your body language is a reflection of your internal state. And I think Vanessa Van Edwards, who is a body language expert and a good friend of mine, she and I have talked about this as well, and it is a little bit dangerous because sometimes someone's just sitting awkwardly in an air on chair like I am right now. And they're like, “Ah, let me hold on, I got to shift.” And then my headphone cord is pulling. So I'm moving that around.
Alex Kouts: [00:31:09] You look fantastic.
Jordan Harbinger: [00:31:10] And it's like, “Uh-oh, did I just look like I'm doing the fig leaf?” Am I leaning over because the mic is low or am I self-soothing? So you have to be a little bit careful, but when you have a huge bouquet of physical manifestations like that where somebody is closed up and hunched over, and this and that and the other thing, you can start to put those things together. But I just want, I always caveat the body language stuff with, if someone's arms are crossed, maybe they're just cold.
Alex Kouts: [00:31:36] Yeah, totally. And we're going to talk about that specifically in a moment. So let's talk about how to fight that emotional response, how to control it right. So one of the most useful things that I've ever gotten professionally was being media trained. So that's where a firm will come in and they will do mock interviews and TV and they'll record you. They'll even set up a real or fake studio inside of a conference room in a company. They'll ask you difficult questions, they'll see your responses, then afterwards they'll play the tape back for you.
Jordan Harbinger: [00:32:00] Oh! That's awesome.
Alex Kouts: [00:32:01] And like point out things like, “Oh, well, you did this thing, you look less trustworthy, that kind of thing.” Not everyone has access to media training, but you can record yourself and conversations. You can record yourself on phone calls. You can just look at it, or even like sit in front of a mirror when you're having conversations and try and do both things at the same time. Although I recommend that can be distracting sometimes.
Jordan Harbinger: [00:32:19] Oh yeah, that could be -- plus you're going to calibrate in the moment, which is going to be a huge problem.
Alex Kouts: [00:32:22] Totally. But having to watch yourself. It's amazing what you will pick up. It's funny, I was talking to a friend the other day, we think we have a really good relationship with ourselves, but what we see internally is not what other people see. There's a whole another person on the outside of you that you're not seeing on a regular basis, and you force yourself to look at that person, to listen to that person, then there are so many things you don't pick up. You're just not aware of how you're coming off. So I would highly recommend that if you have the opportunity to speak in front of people, have it recorded, even if you put up your phone with one of these little holders in the back and you just press the record or have a friend do it, it is amazing what you will pick up.
[00:32:58] So first step is just pay attention to what you're doing. Recording yourself is a great way to do it. The other is, and we kind of touched on this before, try not to react in the moment immediately with things. So if I know I'm going to have an emotional response except as a foregone conclusion before an offer comes, if you know that it's coming, like in a job offer scenario. Assume ahead of time that you are not going to respond immediately so that you're not caught off guard, and in searching for words to put into kind of the conversation how you're feeling.
Jordan Harbinger: [00:33:27] Well, that's useful because if we're just reacting with questions, then we don't have to really game it out too much. Because the question can be the same regardless of what the offer actually is.
Alex Kouts: [00:33:37] Exactly. You can never take back a communicated reaction. That is hugely important. You can never take it back. Once someone offers me something and I react to it, every other conversation we have now has that as a data point upstream from it. And it's very difficult to change people's perceptions, once they make decisions based on that reaction.
Jordan Harbinger: [00:33:53] That's true. That's a really good point. You can never sort of reel it back in.
Alex Kouts: [00:33:57] Yeah. You just can't do it. And like we talked about before, words of my father, “Don't indulge yourself.” Keep it inside to whatever degree you can. Delay it, ask clarifying questions, ask for more time, ask for more information so you'll get an answer soon. Very, very good way to do it. Another one that's huge, and this is important on the poker table specifically is -- often I played a lot of tournament poker, meaning I could be playing for like 18 hours at a time.
[00:34:21] In tournament play, one of the most difficult things is regulating your internal emotions. So if I get a bad beat, like I'm having a really tough hand, often poker players will go on what's called tilt.
Jordan Harbinger: [00:34:31] Yeah.
Alex Kouts: [00:34:32] Yeah. And they'll just start making a lot of really bad decisions. Because like Jordan you took my money and I'm out for blood, and I'm going to raise you, a check raise you, and throw you off in every single hand, because I'm just trying to get my chips back. That is a really bad position to make decisions from. So in situations like that, whenever I would have a really bad beat at a poker table and you see a lot of poker players do this, they'll put their chips down, they'll put their blind in the middle or whatever, and they'll walk away. They'll take a deep breath, they'll get a massage, a Coke and a smile, whatever it takes. Just chill out.
Jordan Harbinger: [00:34:59] Unless it's Phil Hellmuth. Sorry Phil.
Alex Kouts: [00:35:01] Right. And he'll lean into it and just go nuclear.
Jordan Harbinger: [00:35:03] Yeah, you're not going to last 10 years in this. No, I’m fine. I'm good.
Alex Kouts: [00:35:08] Yeah. But I mean take a walk a, you know, say thank you. I need to consider this alongside other opportunities I'm looking at, when do you need an answer by? Create some distance. That's very, very important.
[00:35:18] Another tactical thing in job negotiations especially, or it doesn't just have to be job negotiations and if you're not good at this kind of stuff or you know that controlling your emotions is going to be difficult. Try and do things via email as supposed to via phone.
Jordan Harbinger: [00:35:30] Something asynchronous where you have time to like take a breath and calm down and not fire back right away.
Alex Kouts: [00:35:35] Exactly. And if ever you read an email, they'd like irritates you and you immediately start typing a response. You've already lost the battle.
Jordan Harbinger: [00:35:41] I know! That's so me too.
Alex Kouts: [00:35:42] You haven't lost the war yet because you can still not send it, but you've lost that battle. So just take some time, take a deep breath and walk around.
Jordan Harbinger: [00:35:49] Save as draft as your friend.
Alex Kouts: [00:35:51] Yeah, exactly.
Jordan Harbinger: [00:35:52] Take your head out of your ass. You know what? Maybe I shouldn't. Maybe I shouldn't send that.
Alex Kouts: [00:35:55] Yeah. You know another one, and this is the last one I'll say on this because this is the hardest one by far. For controlling your emotional experiences, broadening your context. So this is like the classic, really irritating feedback someone gives you when something doesn't work out. Well, there's more fish in the sea. Yeah, I know that, but that doesn't really help me at all. But the truth is they're right. There are more fish in the sea and we have to -- sometimes it takes us a little bit of time to get there, but if you can begin to kind of widen the context of viewing any individual negotiation scenario with a little bit more, -- well, there's going to be a lot of these, I'll figure it out later. This one is not a life and death scenario.
[00:36:32] You really have to tell it to yourself over and over again. Hearing it from other people is probably just going to piss you off if you're anything like me. So you got to tell it to yourself. And you know, the funny thing is -- every situation, especially if we care about it feels like a life and death scenario because we're focusing on it. That's really what it is. Our zone of focus is so narrow that we don't see anything beyond that. If we just broaden it a little bit, it can make things a lot less painful.
Jordan Harbinger: [00:36:55] Do you have a concrete way to do that that you do all the time? Do you just tell yourself there's plenty of fish in the sea, or do you actually like go look at?
Alex Kouts: [00:37:02] Yes, a tattoo on my chest.
Jordan Harbinger: [00:37:03] Yeah. Do you have a Where's Waldo book and you're like, “You're right, there are a lot of people in this.”
Alex Kouts: [00:37:07] Yes. So one way that I, that I helped myself with this is by keeping my options open. So one of the things I tell people is even if they found a job that they really like, even if they're like most of the way through the interview process, still be applying to other jobs constantly. Because even if you're like a 100 percent positive, it's going to work out. And even if no matter what offer they give you, it's 100 percent that you're going to say yes, you still should be looking at other offers because you never know. And even if it is going to work out 100 percent, you're likely to make better decisions knowing, not thinking, not being abstractly aware that there are other options, but knowing that there are other options that are available to you. So I never negotiate things in a vacuum. I'm always keeping my options open. I'm always creating other opportunities.
Jordan Harbinger: [00:37:48] Yeah. The more irons you have in the fire, you can always say, “Well, I don't love this offer.” And instead of going, “Yeah, there's plenty of other ways for me to get an offer. Oh, but I'd have to start over like that, and so hard.” You go, “We'll have like three other applications and I'm already in the preliminary interview phase for each one. So this offer isn't really that great and I'm starting to get more excited about this other place that I applied to. So maybe I'll give a more consideration.
Alex Kouts: [00:38:12] Totally. Abstractly knowing that there are other fish in the sea is really different than seeing fish in front of you.
Jordan Harbinger: [00:38:18]Yeah. It's kind of like relationships. Do you have a rebound that you're going to call now, or do you just sort of vaguely know that you can maybe meet someone new?
Alex Kouts: [00:38:25] It just doesn't work that way. So give yourself real tangible options that can force you to broaden your context and be aware that there are other things out there. It makes all the difference. And I would say it's not just specific to a job offer scenario. Even if you're coming up to negotiating a raise with your boss or you know, another title escalation, be applying for other jobs at that same point. If you are pushing yourself to a decision point, always be looking for other opportunities, make it tangible.
[00:38:50] So now the third thing, so the first thing we talked about just to review is when be looking inward, figuring out how to get outside of our internal monologue. The second was learning how to control our emotions a little bit, and we walked through some tactical tools for that. The third thing, and this is closely tied to those, is learning how to read the other side of the table. Now this is very difficult, because there's a lot of bad information on the Internet, the wilds of the Internet. I know that that's heresy to say that there's bad information on the Internet, no one believes that. Everyone just gasses and gushes and do the same.
Jordan Harbinger: [00:39:17] Everyone is shocked when they hear this.
Alex Kouts: [00:39:20] Yeah. But there's just a lot of shit information on the Internet about how to read other people. There's people --
Jordan Harbinger: [00:39:24] You’re pointing at the door. It means they want to leave.
Alex Kouts: [00:39:26] Exactly.
Jordan Harbinger: [00:39:27] No.
Alex Kouts: [00:39:27] Yeah. No, it doesn't.
Jordan Harbinger: [00:39:28] It means that their feet are pointing at the door, they don't even notice it.
Alex Kouts: [00:39:30] Yeah. Maybe there's a sandwich over there, that they're like walking to, or who knows what it is, right?
Jordan Harbinger: [00:39:34] Maybe there in an air on chair and they don't know what to do with themselves.
Alex Kouts: [00:39:36] Yeah. I mean, be aware of people who recommend specific cues as definite indicators of behavioral intention or emotions. There are some general rules of thumb, some of which we talked about which are good, but per your point earlier, those are violable. They are not inviolable. The most important things you need to look at when trying to read someone else is establishing a baseline for them. Both their physical characteristics, their mannerisms and their inflection, intonation of word choice. We'll talk about that more in a second. And then their tolerance levels, their variability. How do they react to things? Are they reacting a lot? Does their behavior change dramatically when they're scared or upset, or does it change only a little bit or not at all? So figuring out where their baseline is and then figuring out how they respond to stimulus. And we'll decode both of these a little bit. Give us some more tools to do this. That's how you read people effectively. It's not absolute measures. It's not inviolable rules. It's reading a baseline and then figuring out their variants from the baseline.
Jordan Harbinger: [00:40:30] Nice. Okay. So like lie detection, interrogation tactics.
Alex Kouts: [00:40:35] Yeah.
Jordan Harbinger: [00:40:35] One O, let me even that 101.
Alex Kouts: [00:40:37] Yeah.
Jordan Harbinger: [00:40:37] 201.
Alex Kouts: [00:40:38] If you have a lie detector, feel free to bring out a parties. I don't have one. So I've never tried that.
Jordan Harbinger: [00:40:42] Yeah, I've never tried it either. I would love to take a polygraph test just to see what that's like.
Alex Kouts: [00:40:46] Totally. That would be so weird.
Jordan Harbinger: [00:40:48] Shall we get into reading people? What do you think?
Alex Kouts: [00:40:51] Let's do it.
Jordan Harbinger: [00:40:51] Let's get back into that.
Alex Kouts: [00:40:52] Yeah. So as we mentioned, baseline and tolerance is the two most important ingredients and understanding and reading someone effectively. So let's start with reading someone's baseline. So -- and let's illustrate why it can be problematic to use absolute rules to read body language.
So we would generally say that arms crossed means that someone is uncomfortable. It means they're not feeling good, right? They're protecting themselves, their vital organs would be the evolutionary explanation for that, right? So in that situation, I could look at someone with arms crossed and say, “Oh well they're uncomfortable. I need to abrogate my, I need to, excuse me, change my strategy. I need to do all kinds of different things.” But in reality, maybe they just cross their arms all the time. Maybe they're uncomfortable to begin with. That could just be them normally. So it's different -- it's a bad idea to walk into conversations with these preconceived notions. It's more important to look at how they respond to things. So if your arms are crossed, maybe after a while you start like moving or twitching or something like that. My baseline is arms crossed, bad behavior or concerned or distress behavior is moving side to side -- is touching my face or something like that, or adding another one of those on top. So that's really important.
[00:41:54] I think there's a rule, and we've talked about this before, you and I called the 7-38-55 Rule, that seven percent of the meaning that I'm communicating with, with what I'm saying to you are the actual words I'm choosing. Only seven percent. 38 percent is your inflection and intonation, which is so huge. I'm going to talk about that in a second. 55 percent of it is your body language, but again, we have to be smart. That 55 percent is not an inviolable set of rules. It's me changing my behavior from my baseline. So when you meet someone, a good way to get this is just kind of have a general conversation. Maybe don't jump into the thing they're stressed out about the most immediately. That's generally good manners, and just see what they're doing. Are they moving around a lot? Are they staying still? Where are they pointing? Where are they facing? Are they touching like your arm or something? Is there physical contact, or they just relaxed? How their shoulders look? The big one for me and the one I think that most people overlook. I think body language is a pretty well traveled thing -- is inflection and intonation.
Jordan Harbinger: [0 0:42:47] Sure. Vocal tonality.
Alex Kouts: [00:42:48] Such a huge thing. Absolutely. I mean, when I'm communicating to people, I'm very cognizant of the words that I'm using. Even listen to the conversation we're having now.
Jordan Harbinger: [00:42:57] Use the word aberrant like four times.
Alex Kouts: [00:42:59] Yeah. So I use the word aberrant a lot when I’m tired.
Jordan Harbinger: [00:43:01] We all know that you're trying to impress us with your diction.
Alex Kouts: [00:43:05] Oh gosh. Aberrant that. That's a common word though, right?
Jordan Harbinger: [00:43:07] Is it? I don’t know. I never use it, but I'm going to start.
Alex Kouts: [00:43:11] Yeah, but the point here is that when I'm saying something declaratively, right? I'm emphasizing certain words in the sentence, right?
Jordan Harbinger: [00:43:17] Claritively, yes.
Alex Kouts: [00:43:18] I'm going to do this constantly with, of course, the conversation. I'm emphasizing specific words. Like I use the word emphasizing in that sentence, that inflection and intonation, I'm hitting specific keywords really hard -- communicates a level of confidence in what I'm saying. If I end every sentence with a question mark. So what do you think about that as a good thing? And I like kind of ended up everything. I'm communicating a lack of confidence in whatever it is that I'm talking about, which is dangerous.
Jordan Harbinger: [00:43:39] It happens a lot when people introduce themselves in groups and you'll see this if you're in a circle. I take classes a lot on every conceivable thing. Last I was in a voice acting course, and the teacher had us go around the room and introduce ourselves and everyone said, “Hi, my name is Jordan, and I'm from the South Bay, and I grew up in the Midwest.” And she goes, “Are you sure about that?” And of course the first person was like, “Yeah, why?” And she goes, “Because it sounded like you are asking all of us if that was true.” And then so -- and then the next person would go and introduce themselves and do the exact same thing, and then catch themselves. And we went around probably 15 people. Almost every single person made the same mistake. And I remember when it got to me it was like, don't use question tonality, don't use, you know this, you teach this stuff. “Hi, my name is Jordan.” Shit. Dang it. Like it's just a thing that people do in groups to make sure that they sound, we do it for lots of reasons. One of which is we don't want to sound like we're being dominant or too confident, We often don't want to be that way because it's unbecoming in some way. So we'll say, “Hi, my name is Jordan.” Even though what I want to say is my name is Jordan, I do this and I'm good at it. And F you, you know like you just as a human --
Alex Kouts: [00:44:52] Is that confidence sounds like?
Jordan Harbinger: [00:44:52] That’s confidence. Yeah, bro! Yeah, bro! That's what confidence sounds like.
Alex Kouts: [00:44:56] Get at me, bro.
Jordan Harbinger: [00:44:56] But people really don't want -- it's like we want to kind of signal that we're all sort of at the same level of self-confidence because we all want to get along. And that's actually bad for you.
Alex Kouts: [00:45:08] Yeah. I mean, we strive for social equilibrium all the time, right? We don't want to be overt. We don't want to disturb that. We want to keep that kind of social fabric in place, which we've talked about before. So it's normal. But the important thing to pull out here is when people use question tonality, like you're mentioning, when they trail off at the end of sentences, when they're not being declarative with key words, when they're communicating things, that can be a tell in and of itself that can communicate how they feel.
[00:45:33] Now it's important to understand that from a baseline. So if they're talking normally like what you and I are talking now, and then they start ending up at the end of every sentence, that means something happened in the conversation that made them concerned, unwilling to impose socially, or a lack of confidence in what they're talking about. That change is really what's most important.
[00:45:50] So understanding that baseline and then looking at deviations from that are huge. So I would say, you know, body language is obviously very important. Inflection is also extremely important. I would also add onto that -- rate of speech and volume of speech.
Jordan Harbinger: [00:46:04] Oh, good. Yeah. People don't really talk about that very much, but you're absolutely right.
Alex Kouts: [00:46:09] Yeah. So when I'm tired sometimes, I will speak really fast. If I'm nervous, I will speak really fast. Now, I speak fast to begin with, so it can get kind of disgusting.
Jordan Harbinger: [00:46:20] I do that too. And it's been a long slog trying to slow down. I almost gave up on doing that.
Alex Kouts: [00:46:27] Yeah, it's really tough. Rate of speech is a tough one, but as inflection is very important. Rate of speech can also tell you a lot about someone's mental state. Volume of speech. Is there volume going up? Are they getting angry? That's obvious, right? Is their volume going down a little bit? That can be less obvious. And as a side note, I've actually seen senior executives in companies do a total power play. Where in loud rooms, they'll speak really low because they don't want everyone to pay attention.
Jordan Harbinger: [00:46:50] That's kind of interesting. I never thought about that.
Alex Kouts: [00:46:52] I've seen it several times and it irritates the heck out of me every time. But it makes everyone cater to this person in a very effective way.
Jordan Harbinger: [00:46:59] Uh! It's one of my pet peeves. If I can't hear someone because they're mumbling, I literally go, you know, and I'm not listening to you. And when you're looking, you didn't hear, hear me? I'll be like, “No!” You fricking mumble, and it’s driving me crazy.
Alex Kouts: [00:47:10] Yeah, it doesn't make any -- it's very irritating. I had the same thing because I have trouble sometimes focusing on people in conversations when there was a lot of background noise because I'm hyper aware of like everything that's happening. It makes it difficult to focus and that drives me nuts. I have to ask people to repeat themselves constantly.
[00:47:26] But anyway, to review here. So in reading people -- developing the baseline, understanding their variants from the baseline and their tolerances are huge. In establishing that baseline. Look at words they're choosing, but that's the least important. Look at inflection and look at body language. The inflection and the body language will tell you where your baseline is -- it’s the most two important -- the two most important things to pay attention to. Now, once we have that baseline, now we need to test their tolerances. Now we need to understand how they react to stimulus.
[00:47:53] So some of that will happen in conversation just generally -- like they're going to be tested, they're going to be presented with new information, they're going to be reacting to your counter offer or whatever. So you'll just see that. But sometimes you can take the reins a little bit and I will ask probing questions to bring this data out of people, at the beginning of a conversation. So one that we mentioned before -- what I would call asking these tolerance questions is, -- is there any flexibility here? Like we talked about before with a job offer, is there any flexibility in the terms?
Jordan Harbinger: [00:48:21] Can I point out something really quick? Even one of the ways that I get rid of in clients for Advanced Human Dynamics, one of the ways in which I get rid of the whole question tone at the end of the sentence -- is I tell people to use statement questions where even your questions sound like statements because you can always add inflection in later. But if you just get used to saying what time is lunch? And you do that naturally, you say, is there any flexibility here? You don't say is there any flexibility here? I've never heard you actually talk like that.
Alex Kouts: [00:48:51] No. I had a surgery. I had that had that removed.
Jordan Harbinger: [00:48:53] You had that removed.
Alex Kouts: [00:48:53] I can’t do that anymore.
Jordan Harbinger: [00:48:55] I've got to learn that procedure with, for us, we have to give people drills and one of the drills is to have them record their half of a phone conversation. And I say they're half because there's all these wiretapping laws that are insane in the United States, but you can always record yourself and as long as it's only your side of the conversation, it makes less sense, but it doesn't matter anyway because what you can hear is how many ums and uhs you use, filler words, your rate of speech. And then if you really want to punish yourself and get better quickly, throw the wave file or the audio file into an editor and cut out all of the filler words and you'll go, “Oh my gosh, there's 87 edit points in a 20 minute conversation.”
Alex Kouts: [00:49:34] I said like three seconds of things.
Jordan Harbinger: [00:49:36] Yeah. There's actually had three words of this were not filler garbage.
Alex Kouts: [00:49:39] Yeah, I remember I read a -- I went to the -- as you know, I work in politics and I went to the DNC and the RNC back to back, and I missed a couple of speeches of Donald Trump, and his rallies. I wanted to figure out how he was speaking. I want to learn more about him. And if you read the transcripts of what he's saying, the amount of fillers in his conversation are insane. He can talk for like 45 minutes and say like two things. Now, he plays to the crowd very well and it gets people engaged with what he's saying. So he's able to kind of get over that with his personality. But he does a lot of that. So it's really interesting to listen to.
[00:50:11] So anyway, I will ask these probing questions. So one is, is there any flexibility here like we're talking about? I will also say things that sound more empathetic. Like is there a possibility to find like a workable solution that works for both of us here? Like is there something we can do that will, will both work out for us? Like are you open to that conversation? Just to see what people saying. It tells me who I'm talking to by their answer.
Jordan Harbinger: [00:50:31] Does anybody say no?
Alex Kouts: [00:50:34] That's the thing. No, they don't. It's very rare for them to do that. If they do, then there may maybe really is no tolerance.
Jordan Harbinger: [00:50:40] Yeah. That's a huge red flag. No, I'm going to get my way. I don't care about you. Okay.
Alex Kouts: [00:50:44] But to reillustrate that concept over and over, we're using the social fabric to our benefit. We're using people's desire to maintain that social equilibrium, that social fabric, not twist it, not bend it, not break it for our own purposes. So by them, me asking you that general question, is there any flexibility here? You're going to seem unreasonable. You're going to upset that social equilibrium. If you say no, there's no flexibility here.
Jordan Harbinger: [00:51:06] Sure. Yeah.
Alex Kouts: [00:51:07] So I'm painting them into a corner a little bit in a nice way.
Jordan Harbinger: [00:51:10] Yeah, that makes sense. And we love painting people into a corner in a nice way.
Alex Kouts: [00:51:14] Right. Another thing that's really a huge play in negotiations and something that I think is underused by a lot of people is the notion of something called social proofing. Social proofing is something that you and I've talked about before, a bunch, but basically what it is, is that in plain terms that people won't believe you, but they will believe other people, when it comes to opinions on things.
Jordan Harbinger: [00:51:35] Oh, sure.
Alex Kouts: [00:51:35] So if I tell you, like, “I make the best muffins in the world.” You're going to be like, this guy doesn't know anything about muffins. He's not to be trusted. He's got too much to lose here. If his muffins aren't the best in the world. But if 45 people come in, they're like, “Yeah, these are like the best muffins I've ever had.” Then other people will likely begin to believe that. So that's using an element called social proofing or wisdom of crowds. There's five major types of social proofing. There is social proofing with experts. Like nine out of 10 dentists recommend this particular pack of cigarettes in 1965.
Jordan Harbinger: [00:52:05] Yeah sure.
Alex Kouts: [00:52:06] Right. Celebrity social proofing.
Jordan Harbinger: [00:52:07] Calling of all the bacteria.
Alex Kouts: [00:52:09] Exactly. right. Yeah. Healthy for moms and kids. And then they're a celebrity social proofing. So because Brittany Spears says this is the best shave, or to completely shave my head bald. Like yep, she knows what she's talking about. She just shaved head.
Jordan Harbinger: [00:52:20] Really?
Alex Kouts: [00:52:20] Absolutely. I love Britney Spears. There is users or consumers, so other people like people that are eating the muffins that I've made. It sounds weird when I say that, like I sound dastardly in some weird way.
Jordan Harbinger: [00:52:31] Yeah, it’s a little bit what does that euphemism actually mean?
Alex Kouts: [00:52:34] Yeah, wasn't there arrested development episode with poisoned muffins or something like that?
Jordan Harbinger: [00:52:37] Maybe. I mean muffin in general is kind of a suspicious breakfast item.
Alex Kouts: [00:52:41] It is.
Jordan Harbinger: [00:52:42] Yeah.
Alex Kouts: [00:52:42] Yeah. I've never really thought about it, but it's a really nefarious baked goods, I don't cost them.
Jordan Harbinger: [00:52:42] I take 100 percent true.
Alex Kouts: [00:52:48] Cupcakes forever. The four types of social proofing, his wisdom of crowds. So you use Yelp or online review services. A hundred people said this Chinese food restaurant is good. It must be pretty good. And the last one is friends. So because we're friends and because you recommended something to me, I'm much more likely to believe it. That's why companies use invite a friend so frequently because the conversion rates, the click through and buy rates from a friends introduction to a product are abnormally high relative to all other types of social proofing.
Jordan Harbinger: [00:53:14] That makes total sense. For me, it's a little -- those companies probably wonder why it doesn't convert because I get invites from random show fans that emailed me once and then sent out to their whole contact list. It's like some guy you've never met that liked one of your pictures on Facebook three years ago wants to invite you to this referral service. But I can see why it would make sense if you had maybe only your friends and family on social media as one normally does.
Alex Kouts: [00:53:38] Yeah, exactly. So social proofing is a really important concept and it can be used in negotiation scenarios. So for instance, when I am -- let say negotiating a raise with my boss. So if I walk in and I say, I think I feel, I want this. That's my subjective opinion. And it's very easy to discount that, it's very easy for someone to go, well, you think you want that. Well, no, that's not true, but if I come in and I say, “Listen, I love my job. I love working here. This is great. I want to build a career here.” Like padding it with all the nice social stuff, the relationship, the empathetic stuff. Then I say, but for the job that I'm doing here, the market rate is X. How do we get closer to that? That's me using the market or social proofing as the bad guy. That's other people saying that this is a particular thing so that I'm not specifically saying it myself so that I can make the -- I can offload that choice, that kind of validation to somebody else and it's very useful in negotiations.
[00:54:31] So I often tell people to stay away from “I want,” “I think,” “I need” to “This is what the market is for this; how do we get here?” “This is what -- this would go for here.” “This is what other people are paying for this.” That makes a big difference.
Jordan Harbinger: [00:54:44] That's a subtle distinction because it seems, well maybe it's not so subtle, but it is a little counterintuitive because for me it seems like if somebody has a strong opinion, maybe I should take that into consideration, but really a 100 or a 100,000 small opinions are more valid.
Alex Kouts: [00:55:01] Is this like the -- would you rather fight one horse sized duck or a hundred duck sized horses or something like that? It’s the same logic thing.
Jordan Harbinger: [00:55:06] I don't know, but I liked them all. I'm thinking about that and I'm thinking, tuck size horse.
Alex Kouts: [00:55:12] I think you want the little ones.
Jordan Harbinger: [00:55:14] Yeah, the little ones sound easier to manage.
Alex Kouts: [00:55:17] Yeah. And that would work on the little ones, but not the big. Anyway, the point here is that you're right. I mean, but when I'm using social proofing, I'm still expressing my opinion. I'm not not expressing my opinion. I'm just doing it through a vehicle, which is beyond reproach or closer to beyond reproach than my own opinion.
Jordan Harbinger: [00:55:33] Right. Because theoretically you could just choose the group that you wanted anyway. Like a toothbrush company does. Nine out of 10 dentists, and then there's that one guy who we're never inviting back to the focus group who didn't recommend this toothbrush. And obviously he doesn't -- he's not a real dentist.
Alex Kouts: [00:55:47] Why is it always nine out of 10?
Jordan Harbinger: [00:55:48] I don't know. Why wouldn't it? You know why? It seems more believable. Because truthfully, there's not one dentist who's like, you know what? I just can't get behind this toothpaste. I know that all my colleagues agree that this is great, but I just, I hate Aquafresh.
Alex Kouts: [00:56:02] I'm a Colgate man.
Jordan Harbinger: [00:56:02] I can't do it, Colgate man.
Alex Kouts: [00:56:04] Too painful.
Jordan Harbinger: [00:56:05] Yeah, it doesn't make any sense. So I think it's a credibility thing. I think they stack the deck with one guy who's -- there like your job is to disagree with everything we tell you today.
Alex Kouts: [00:56:14] Makes sense.
Jordan Harbinger: [00:56:14] It's a great, where's my 100 dollars?
Alex Kouts: [00:56:16] Everybody needs it. Here's the 10 set word for polemicists. Everybody needs the one that disassembled everything. So anyway, there's a couple of other examples of social proofing, they're important here. One is the value of an Ivy league education. I think, you know, it's debatable whether or not getting an Ivy league education is a better education materially speaking than another top tier school or another college generally. But the fact that you have that merit badge is proofing from another organization that you are legitimate, that you are skilled or smart or Excel or exceptional in some sense.
Jordan Harbinger: [00:56:46] Yeah. It's like those people who go to Harvard drama school, and they'll like that they can't shut up about how they went to Harvard.
Alex Kouts: [00:56:51] Yeah, exactly. So anyway, the point is, you know, the social proofing stuff makes a huge difference. And I think you should consider using it in whatever way you can in negotiations specifically the point at which you make a counter, not I think I want this, but based on the market or what other people are saying, this is what is a fair price for this. Now, I will say as a caveat because I get a lot of students that ask this -- let's say I'm doing a job race in here to go back to that example. Don't print out jobs salary offers from other places or like numbers and put them in front of people because that seems too manufactured, too premeditated. And you're at a different place emotionally in the conversation and the person you're talking to and it will alienate them to a degree. Just have the verbal conversation.
Jordan Harbinger: [00:57:30] Got it. Okay.
Alex Kouts: [00:57:30] Yeah.
Jordan Harbinger: [00:57:31] Yeah, that's interesting because it does seem like wow, well if I've got my glass door or whatever the vault, whatever it was back in the day, salary projections for lawyers that are three years in at a major law firm, here's what I should be making. But if you fork that over to HR, they're just kind of like, it is a little weird and unnecessary because they know already. That's their job.
Alex Kouts: [00:57:54] Absolutely. So yeah, I mean in closing here, I would recommend to anyone who's interested in the subject, just Google five major types of social proofing. There's tons of articles that are out there that explain them really carefully. It is a very dominant behavioral trigger that all UX designers that build applications and experiences make. It's one of the things that Facebook has been roasted for in the press lately because they used all these behavioral triggers and social proofing and trigger notifications to get people to take actions and create behaviors and addictions and all kinds of things. There's a lot of interesting things in our world that are affected by social proof.
Jordan Harbinger: [00:58:26] Have you seen slash read? I remember a friend -- this is a long time ago, a friend of mine goes, “Dude, you know what? There's this dating thing back when Facebook allowed dating apps and this company was called Zoosk,” and they're no longer even allowed to. I think they tanked. I could be wrong, but they are no longer allowed to advertise on Facebook. But for a while they were spending like $1 million a day or something. And my friend goes, “My cousin is in the ad for Zoosk.” And I thought, “What are the odds of that?” And he showed me and I went, “That's incredible.” And then another friend of mine goes, you know what's so weird, my friend is in this ad. And I went, “Oh, he must be friends with Brian's cousin.” So then he showed me and I said, “Oh, it's a different ad.”
[00:59:06] And then another person was like, you know, my such and such is in this ad for Zoosk. And I went, “Wait a minute, what's going on here?” And then later on they found out that no, what this ad was doing was pulling people that it knew, you knew through Facebook. Clipping a photo and using them as the person in the ad, so that your eyes were attracted to this person that you knew. But also it's a little bit of a social proof thing because you think, well, “Oh my friend is clearly a user of this app because they're in the freaking ad.”
Alex Kouts: [00:59:35] Yeah. That's as clever as it is questionable. It's questionable.
Jordan Harbinger: [00:59:39] It is questionable.
Alex Kouts: [00:59:40] Extremely questionable.
Jordan Harbinger: [00:59:41] Especially if you're not paying the person for their use of their photo. I don't know how they got away with that.
Alex Kouts: [00:59:46] Well now Facebook has integrated that as a main feature in its platform. So in your feed, you'll see like 15 friends liked the economist, also like the economist. Those are promoted posts. Then they're using social proofing of your friends to get you to click on and follow more profiles.
Jordan Harbinger: [00:59:59] Yeah. Look, I don't want to crap on social proof too much because it is very useful. I want to know what podcasts my friends are listening to. I want to know what my friends think of the restaurant, I'm thinking about going to tonight. So I look on Yelp for that. What I don't want is for somebody to go, “Hey, you should buy this because randomly 15 of your friends over the last 15 or so years, they clicked like once on something that this place published online.” So therefore they like the economist.
Alex Kouts: [01:00:23] Yeah. You know, as with everything that's a tool, you can overuse it, you can use it incorrectly, but it's important to know that it's there, and know how it affects you, know that other people expressing something is valuable affect your understanding of that value. I mean it's the whole purpose of luxury brands, right? Like everybody thinks that Louis Vuitton is so fancy. It's not fancy in and of itself. I mean it is, but it's really more that other people think that it's fancy that affects my understanding of its value. So I mean understand how it affects your decision making, the things that you say to other people and then learn how to use it as a tool. It's very effective.
Jordan Harbinger: [01:00:56] Great. I love that. I like the idea that social proof should also be, and tell me if you agree, should be more or less subtle, subtle enough. Of course, it has to sink in, but subtle enough that we're not beating people over the head with it. And I'd love to think of an example, but I'm going back to luxury brands in my head where, and I can't remember who told me this, it was on the Jordan Harbinger Show at some point. But this person who was in charge of talking about brands and things like that had told us that when you buy, let's say Gucci or Dolce and Gabbana is, I think are a good brand for this. You buy their lowest end sunglasses. The DG logo is enormous. It's the whole temple. It's gold in the middle. It's gaudy. It looks terrible. Sorry DG. And that's the lowest end pair, right? But when you go to there --
Alex Kouts: [01:01:44] Whoever's listening, I'm sure it looks great.
Jordan Harbinger: [01:01:46] I'm sure it looks great on you, but it looked terrible on me and that's all I'm saying. But when you buy the mid-range stuff, the logos are a little smaller. They're still visible, but they're a little more tasteful. And then the highest, most expensive, generally the highest quality, like the polarized lenses. “Oh this is gold plated, dah, dah,” it has the DG logo or the Gucci logo like on the lens, it's pretty subtle, you have to look for it, and often there's no logo at all. And it's just people who kind of are in the know are like, “Oh those are the new such and such, those are the new Ferragamo or this is the new such and such Yurman jewelry, David Yurman. That stuff is visible to the right people because it has the right signal. But the lowest end stuff is, look at this name brand I'm wearing, right? Because it's not for people who are trained and have a good eye for it. It's, “I spent a lot of money on these. I'm wealthy.” That's the signal I'm trying to broadcast.
Alex Kouts: [01:02:34] Exactly. But it's so finely tuned, right? It trains people like I need to know to look exactly here, to know that this thing is legit versus a nappy. It's incredible. It's just absolutely incredible.
Jordan Harbinger: [01:02:44] I used to watch, this is a weird tangent, this is on social proof. I used to watch when I lived abroad, there's a channel called Fashion TV. Have you ever heard of it?
Alex Kouts: [01:02:53] Yeah.
Jordan Harbinger: [01:02:54] This is basically a channel that's on at bars, clubs, whatever, where they need something that's mindless to watch. But if you don't understand Serbian for the first 10 months that you're there, you watch a lot of this, you have it on in the background, and it's all couture. It's all like fashion shows and interviews with people who barely speak English, who are wearing some like giant live rabbit on their head or something. And what I noticed was -- so I got finally tuned to a lot of this new fashion stuff and I'd be watching this stuff. And I started to get kind of fascinated with like why did they make women's necklaces look like this? Why did they make jewelry look like that? So I started to be able to spot high end jewelry that people were just wearing. And I would go, “Oh, is that a such and such?” And they'd be like, “Yeah, are you a jeweler?” And I'm like, “No, just really embarrassed that I have watch a lot of TV.
Alex Kouts: [01:03:39] Fashion TV, double guns.
Jordan Harbinger: [01:03:40] Fashion TV, double guns. And they're like, “Okay, get away from me.” What I noticed by doing that was you could tell and you could look at pricing because that was always very curious. Like how much is this bracelet? Holy crap, 15,000 euros. Like who is buying this? So when I saw it, I kind of went, “Wow, that person really shelled out for this bracelet.” So I started to notice what brands were doing, especially high end luxury brands. And so when you start to see that you, you even start to see the type of people that wear certain types of things. Generalization of course. But you find these people who are like, they don't talk about their money, but clearly they were probably born into it. They never even think about it, because they have so much that's never going to be a concern. They're wearing something that's nice and tasteful but costs 21,000 euros. The person who has no money and works as like a maybe a blue collar, if I can use that term job. They're the ones that have the loudest brand pronunciation and that's also the cheapest or most affordable end of that luxury brand.
[01:04:41] And so the social proof thing, it's kind of like can be a surgical instrument, right? Where someone goes, “Yes, I'm wearing this because I like it and I'm also signaling wealth but in a tasteful way.” And then it can also be this kind of croquet mallet that you're hitting over the head, like the -- what does that carnival game where you hit the thing and it rings the bell?
Alex Kouts: [01:04:59] Yeah, yeah.
Jordan Harbinger: [01:05:00] There's people who use it that way and so we kind of have to be subtle enough where the person we're intending to get the message is getting the message via our social proof, but we're not using the mallet.
Alex Kouts: [01:05:12] Yeah, and this is a really interesting point, right? Because it's not just specific to social proofing. If I'm using a tactic that really seems like a tactic on you and it looks like I'm trying to strategically game the conversation and it's obvious the other person, that's immediately going to be suspect and destroy trust in the relationship, and it can really irritate people. So whenever you are using a tactic of any kind, it has to be subtle, it has to feel natural, and that is a difficult thing to do. You know, one way to do that as use casual or familiar language as opposed to buzzwords and other things that seems specific to this particular tactic I'm taking on. The other is try and work into the conversation naturally. One of my favorite scenes in any movie was Ex Machina, the disco scene. I don't know if you've seen that movie.
Jordan Harbinger: [01:05:54] I have seen that movie but I'm trying to remember what the disco scene.
Alex Kouts: [01:05:57] But without giving anything away, there's just the scene in the movie where two main characters in like a very heated exchange, just break out in this like insanely well-choreographed disco dance and it's so out of place. It's like the definition of a non-sequitur, like just being placed in the movie out of nowhere. And that just felt really weird. I don't know, this is a very elaborate example, but in conversation, if it feels like I'm like having a disco non-sequitur in the middle of the conversation with some transparent tactic I'm using. It's not going to work. It's going to piss somebody off. And it's most likely not going to be effective. So try and make it feel natural. Try and make it feel subtle, working in the conversation if it's appropriate, don't force it. Use familiar language and try and keep your inflection and intonation in line because that's the kind of thing that typically gives it away when you're doing something you're not comfortable doing.
Jordan Harbinger: [01:06:42] Right. Like “Well, I don't know. I'm not very busy man. So can we do it on Monday or Tuesday and instead of that later on in the week?” “No, I know you're lying about this and you're trying to build urgency, damn it.”
Alex Kouts: [01:06:52] Right, exactly.
Jordan Harbinger: [01:06:53] Yeah.
Alex Kouts: [01:06:55] So one last thing I wanted to kind of close with, which I thought was really interesting. It's very close to a bunch of the behavioral psychology kind of elements we've been talking about today -- is this concept called moral licensing.
Jordan Harbinger: [01:07:05] You mean how Prius drivers?
Alex Kouts: [01:07:07] Yes!
Jordan Harbinger: [01:07:08] What exactly is Prius drivers though, right?
Alex Kouts: [01:07:11] It is, yeah. It's Prius drivers where something like some percentage more likely to commit violent road crime, than non-Prius drivers.
Jordan Harbinger: [01:07:17] Or just accidentally be a terrible driver. You know who you are Prius drivers.
Alex Kouts: [01:07:21] Right. But the idea was that inside of our minds we have this almost accounting table of things we've done well or things we've not done well. So if I work out today, I feel less guilty about eating a huge slice of cake later tonight because I worked out today.
Jordan Harbinger: [01:07:34]. Yeah, look, I walked to the gym and then I walked home, because I forgot my gym card so I can totally have pizza for there.
Alex Kouts: [01:07:40] Right. It's a cognitive bias, right? It's not necessarily a real thing because like I worked out and I eat the cake. It's going to more than wipe out like the one mile that I walked here at two miles an hour on the treadmill. But moral licensing motivates a lot of our behavior, and sometimes it makes it possible for -- it makes it likely for us not to negotiate because we come up with these rationalizations for why, well, I did this thing over here, or I got this offer in the first place so I don't even negotiate or it's really high so I don't need to do this. It affects our likelihood of making the right decision very commonly. So be aware when you are creating this like accounting table in your mind that makes you less likely to make good decisions downstream because you think you've made good ones before.
[01:08:18] Every decision needs to be evaluated in isolation, not as connected to other decisions you've made. It's amazing how many people I've seen use moral licensing and all kinds of similar mental acrobatics to rationalize not negotiating at a point where they definitely should.
Jordan Harbinger: [01:08:33] Yeah, that's exactly why I didn't -- well that and just lack of awareness is why I didn't negotiate my Wall Street salary originally. Like “Look man, the economy, you never know. I should be grateful. This is more than my parents made combined at the peak of their career because my first year out. I don't need the money.” I mean, there are a million rationalism. This is the stuff I can remember, imagined what had in the moment when I was actually thinking about rationalizing all of this.
Alex Kouts: [01:08:59] Moral licensing, it’s a silent killer.
Jordan Harbinger: [01:09:00] Yeah.
Alex Kouts: [01:09:01] Yeah. So we talked about a bunch of stuff. We talked about only looking -- people only looking inward and how that's dangerous negotiation, learning to look outwards, how to fight that by asking questions and learning to lead with them. We talked about emotional control, figuring out ways to control your inner monologues so you're not making bad decisions. We touched on how to read people, both establishing a baseline and tolerance, I think it's really important. The social proofing and the kind of moral licensing side of things. These are more advanced in the sense that most people don't think about these kinds of things, and if they are aware of it, they don't handle them well.
[01:09:31] So I'd recommend experiment with some of these things that we're talking about here. Learn how to -- try asking clarifying questions next time I'm in a conversation with someone and see to what degree that affects your emotional experience. It puts you more in the driver's seat. There's just a lot of things we can try. So I closed with the fact that as we always say, negotiations is a very human pursuit. It's a very human experience and it's extremely difficult. Everybody is scared of negotiations. Nobody wants to do it. It's like fear of death, public speaking, negotiations. It's like, it's so bad.
Jordan Harbinger: [01:10:02] I'm not scared of negotiations, damn it.
Alex Kouts: [01:10:04] Exactly.
Jordan Harbinger: [01:10:05] There’s that question?
Alex Kouts: [01:10:06] But we all are. It's a super human thing to be. So the only way to get around that is to get out there and start trying things and accept that the first couple of times you'll probably screw it up. But you got to take that mentality that it doesn't matter if I win every hand that I play as long as I played it, and I learned from it, it's always better.
Jordan Harbinger: [01:10:21] Do you ever try to negotiate small things that don't matter or recommend that other people do that? Like, for example, what if I'm terrified to negotiate? I don't all my first negotiation tactic to be when I'm buying a car or getting a job, should I go to Starbucks and be like, “Can I have a discount please?” Because da, da, da, like should I be trying these tactics everywhere?
Alex Kouts: [01:10:43] Oh yeah. I mean, one of the homework assignments that I give every student who takes my class and I think we've talked about this before, is to go out and get 20 nos. That is the ultimate best one to do. And I would just say, seriously considered that I should plug that every time that you and I talk because it is that important. You should try negotiating and just asking for things at times where there's not really a big consequence. So definitely yes.
Jordan Harbinger: [01:11:04] You know, people are thinking, but it's dumb to try to negotiate at a Starbucks or at Chipotle. There's no way you're ever going to get anything. And I will tell you I did drill.
I can't remember why I tried to do it. I think I was just trying to get outside of my comfort zone or some sort of generic self-help reason, but I found that at the Coffee Bean, they randomly had a discount for people in the office building where the Coffee Bean was located near my old place. So what they started doing was going, “Oh yeah, you can just have that discount even though you don't have an office here because you’re a regular, so whatever.” And they don't care. It's not their money. It's a chain. And I'm a repeat customer. So the manager was like, “Yeah, that's fine.” And the same thing can be done, I had at airport, I recently got a discount because I said this is really expensive and I don't have enough, but I really want this kombucha. And she goes, I'm just going to ring it up as if you work for an airline because they all get discounts. And I was like, “Well, damn!” All I had to do was tell this person I wanted this and I didn't have enough money. What if I just said, I don't want to pay the full amount, maybe less sympathetic, totally equally doable on the part of the employee, ringing me up.
Alex Kouts: [01:12:12] It's an amazing superpower when you realize that the world is made up of people, who have rules that they have control over. It's not made up of hard and fast rules that cannot be violated and you have to live inside those rules, that's your only choice. It is a much more flexible place than we think it is. And that's really the benefit of trying to get good at negotiations. You begin to kind of test those boundaries in a way that empower you in ways that very few other things can. So just by virtue of you asking for those things, you're embracing the fact that you at least have agency and power in the situation to test some of them to begin with, and then what you learn when you actually get responses from it. Ot's really profound, and I can't overstate that. It's such a valuable thing to invest in.
Jordan Harbinger: [01:12:51] Alex, thank you very much, man. As always, super valuable and super actionable.
Alex Kouts: [01:12:56] Thanks, man.
Jordan Harbinger: [01:12:58] Great series. Great big thank you to Alex Kouts. This was just magical. I wish that we could have Alex back all the time to talk about all kinds of topics. This really is one of his major areas of expertise and even exhausted and tired and hungry from travel. He just knocked it out of the park. So if you enjoyed this one, please thank Alex on Twitter and tweet at me your number one takeaway here from Alex Kouts. I'm @jordanharbinger on both Twitter and Instagram, and don't forget if you want to learn how to apply everything that you heard from Alex and all three parts of this negotiation series, make sure you go grab the worksheets also in the show notes at jordanharbinger.com/podcast.
[01:13:38] And look if you enjoyed this series or you enjoy the Jordan Harbinger Show as a whole. Looking forward to seeing you all share this with all your friends and family and those you love and even those you don't. And of course, please throw us a nice review. I share those with the team, and look, if we have an under review with this series, and come on! What's going on folks? Jordanharbinger.com/subscribe. We'll show you how to review us in all the relevant channels. And of course, check out Six-Minute Networking. It is replacing LevelOne if you are in that. This is the course that will change your life. It is free. There's no credit card upfront, there's no upsell. All I want to do is teach people how I've created an amazing network in my personal life and in my business life. This has been a game changer for the business. It's been a game changer for me personally. Jim Rohn said, “You only go as high as your five closest friends,” or you're the average of the people you spend the most time with. The way you level that up is through your network, and I'm teaching you that for free Six-Minute Networking, and you can find that at jordanharbinger.com/course. That's jordanharbinger.com/course.
[01:14:38] This episode was produced and edited by Jason DeFillippo. Show notes by Robert Fogarty. Booking back office and last minute miracles by Jen Harbinger. And I'm your host, Jordan Harbinger. The fee for the show is that you share it with your friends when you find something useful, which is hopefully in every episode, especially a series like this. So please go ahead and share it. We love seeing that online and elsewhere, lots more like this in the pipeline and excited to bring it to you. In the meantime, do your best to apply what you hear on the show so you can live what you listen and we'll see you next time.
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