Threat as a negotiating tool

A threat is a statement that takes the form of: “Do X… or else I will do Y”. In negotiations, that typically means some form of: “Raise the price you’ll pay/reduce the price you’ll charge… or else I will abandon these negotiations.” Since the possibility of “no deal” is implicit in any negotiation, it is seldom necessary to make an explicit statement – a threat. Consider the following before you use threat as a negotiation tactic:

  • Is your threat a considered, well planned statement, or are you acting on emotional impulse? The former may be advised in some rare circumstances – the latter is usually not a good idea in negotiation. Take a deep breath and think again.
  • Are you certain there is no more negotiation space? Have you truly exhausted all other “win-win” options? Are you certain your threat will not close doors that might have led to a better outcome?
  • Can you follow through? Will a “no deal” outcome hurt you much less than the other party, or just as much? Do you have the resolve, the authority, and the resources to make good on your threat? Empty threats are typically transparent and will hurt your credibility and your negotiating position.
  • Is it worth the relationship damage? Threats invariably create some level of stress and hostility in your negotiating partner, and can easily produce an impulse to “strike back” (either with active hostility, or passive undermining). Is this an outcome you can live with? Is the relationship of no or limited value to you (a purely transactional negotiation), or are you likely to need this partner again?

Lastly, perhaps needless to say, but best not to use email if you must make a threat.