I cover this technique in Chapter 3 of my book The Real Trump Deal, excerpted here. The first ten chapters include Trumps’ Top Ten Business Negotiation Strategies and are based on my analysis of over 100 Trump business deals over his almost 50 years of business negotiations.
An Excerpt of Chapter 3 From The Real Trump Deal
Wayne Barrett, the investigative reporter who started reporting on Trump in 1978 and author of Trump Show, said Trump “was born with bullshit capabilities beyond what you and I could possibly imagine.”
One typical example—the sale of Trump Tower condos—illustrates Trump’s tendency to use “truthful hyperbole” in his negotiations.
The Sale of Trump Tower Condos
Donald Trump’s first major independent effort to sell to people’s dreams came with Trump Tower. How did he do it? “You sell them a fantasy,” Trump said of his strategy to sell the 266 Trump Tower luxury condos that started at $500,000 for one-bedrooms in 1982 and went up to $5 million for a triplex.
One preliminary note about sales versus negotiations. The terms suggest separate processes. In reality, they represent two sides of the same coin. In my sales negotiation training programs, I suggest these be viewed as parallel processes that work in close conjunction with each other.
So how did Trump sell Trump Tower? He wrote, “From day one, we set out to sell Trump Tower not just as a beautiful building in a great location but as an event. We positioned ourselves as the only place for a certain kind of wealthy person to live—the hottest ticket in town.”
And he received great publicity. TV talk show host Regis Philbin recalled the following about Trump Tower:
I remember coming back to the city in 1983 and the Grand Hyatt had replaced the old Commodore Hotel and Trump Tower had just opened. And I went over to Trump Tower and there was this doorman with this huge fur hat on and I thought: Who’s putting out a doorman like this? Well, lo, and behold, it was the Trumpster! And he had a waterfall inside…! And let me tell you, he saved Fifth Avenue. It was not in good shape then.
TrumpNation author O’Brien described the process this way: “Donald and [Louise] Sunshine [a politically connected lobbyist who worked with Trump on many of his early projects] pitched Trump Tower as the cushy choice for a cushy era…and the media lionized the boy builder as the new face of Manhattan.”
But this didn’t just happen with regular salesmanship. As described in Trump Revealed,
Trump spread a rumor, printed in the New York papers, that Britain’s royal family—Charles, Prince of Wales, and his wife, Princess Diana—were interested in spending $5 million to buy a twenty-one-room condominium, an entire floor of Trump Tower. They never showed. Trump didn’t confess to creating that rumor, which the Times attributed to “one real estate official,” but did say later that the rumor “certainly didn’t hurt us.”
Trump Tower and its highly successful sales and marketing effort launched the Trump brand worldwide. As leading Manhattan real-estate broker and Shark Tank star Barbara Corcoran said, “People might have laughed at the image that Trump gave, but the rest of the world fell for it. It was the first recognized superluxury brand in America known outside of the United States. He bullshitted about it, but by bullshitting about it, he made it sell. I don’t know of anyone who is a better marketer.”
The Trump Tower Marketing Effort—Puffery or Lies?
The only problematic element in the Trump Tower sales effort related to whether Trump intentionally told a journalist that Prince Charles and Princess Diana were considering a condo there. Everything else falls within the normal bounds of puffery, at the least..
But what does puffery even mean in sales negotiations? Is it just a pseudonym for lying? No.
The “Puffery vs. Lying” Standard
Black’s Law Dictionary defines “puffery” as “the use of exaggeration or hyperbole in statements made to promote or sell a product or service. The inability to verify or measure the accuracy of the statements is what distinguishes puffery from false advertising.”
The standard is this:
- Statements of opinion like “the Trump Towers condos are the best in the world at the premier location in New York City” and “we use only the best and most reliable construction materials” are generally acceptable;
- Statement about the future like “you will love to live here: and “you will enjoy the unparalleled views of Manhattan from your living room” are generally acceptable;
- Misstatements of material fact reasonably relied upon by your counterparts like “we only use U.S.-made materials in our construction:–when you don’t—are generally unacceptable; and
- Vague, general, and ambiguous misstatements decrease the likelihood someone will reasonably rely on them. Thus, while they may still be untrue and about an important fact (a misstatement of material fact), they will more likely be considered acceptable puffery.
What does this mean for the Trump Tower effort? Trump’s “bullshitting” here falls squarely within the bounds of normal puffery—even his possible statement relating to Prince Charles’ and Princess Diana’s alleged interest.
First, there is no proof the statement is true or false.
Second, even if untrue, the newspapers could only attribute it to “one real-estate official” and not directly to Trump. Possible Trump Tower purchasers reading it thus would have less reason to rely on it being true. They don’t even know who said it nor whether that person had any credibility or knowledge of the actual fact.
Third, even if false and attributed to Trump, it’s an expression of the Prince’s and Princess’ possible interest. This is vague and ambiguous. The “real-estate official” did not say he showed them a condo or the royals visited Trump Tower. Nothing specific. For a purchaser to rely on this vague and general statement to buy would be unreasonable.
Puffery? Yes. Abnormal lie in sales and marketing? No.
Just because it’s puffery, though, does not mean it should be done. Nor does it mean the research recommends it. In fact, Trump’s exaggerations may have been counterproductive in many of his negotiations.
How can you evaluate this? Here’s a framework to use for Trump’s statements and others. Evaluate a) its morality, b) its legality, and c) its negotiation effectiveness.
Is the statement or conduct moral?
Morality is an intensely personal issue. And the purpose here is not to judge Donald Trump’s morality. Instead, it is to assess his negotiation strategies and tactics. Where does Trump’s “puffing’ or “bullshitting” fall on the morality scale?
It depends on what you personally consider to be moral.
Let’s change the Trump Tower Prince Charles/Princess Diana example to illustrate this. Assume Trump is meeting a successful business professional considering a condo, and the following conversation took place.
Trump: This is the most incredible spot in the city to live. You will love it. Guaranteed. There’s no place in the world like this location on Fifth Avenue. Best location. Best city. Best building. Best address. Just look at those amazing views from your bedroom. Imagine waking up and seeing that skyline. Your friends will be totally jealous!
Potential buyer: I would love to live here. I’m just worried about the area. I know it’s Fifth Avenue, but the department store here before went under. And what about the homeless and vagrants? Who else is going to live here? What’s your security going to be?
Trump: I’m glad you asked. In fact, just last week I took Princess Diana on a tour of a residence that takes up an entire floor of the building. She loved it! In fact, I expect to get an offer from her shortly. Wouldn’t it be incredible to share an address with Prince Charles and Princess Diana? You might even run into them on the elevator. On security, absolute best that money can buy.
Potential buyer: How do you think this will perform as an investment?
Trump: Just think about the impact on your investment if Prince Charles and Princess Diana live here! I should be charging you twice as much. Here’s the deal—it will be an unbelievable investment. We’re almost completely sold out already. And that is without anyone knowing about Diana’s tour last week.
Assume Trump made up the Princess Diana tour and related facts solely to entice other buyers to choose Trump Tower. An intentional misrepresentation. Was Trump wrong?
Some of you undoubtedly believe this is an easy call. He lied. It’s morally wrong to lie. Therefore, he shouldn’t have done it.
Others will disagree. “He was just puffing,” you might say. “People puff all the time. Here the purchaser was a sophisticated business person who chose to believe Trump. No one forced him to believe this or to buy.
Others may not see this in black-and-white terms. Here they might say it’s a borderline issue that rests on practical considerations. They might feel uncomfortable doing it, but they don’t morally condemn it—especially if such puffing appears to be the norm in certain settings, and most everyone knows it occurs.
Here’s the “moral” deal: We all have different moral compasses. And each person will judge others’ behavior based on their own perception of right and wrong.
Should you engage in similar “puffery?” If it violates your moral code, don’t do it. If this does not cross your moral line, consider whether it crosses the legal line.
Is the statement or conduct legal?
In most negotiations, the conduct’s legality revolves around whether it’s fraud. Most states consider conduct fraudulent if it includes: 1) a knowing 2) misrepresentation 3) of a material 4) fact 5) reasonably relied upon by your counterpart, that 6) causes damages.
Here we have 1) a knowing 2) misrepresentation, but we may not have any other elements of fraud. If you don’t have all these elements, it’s not fraud. Let’s analyze the other elements.
Is the fact that the Prince and Princess toured another Trump Tower property “material?” Interesting? Yes. Material to an objective purchaser’s decision? Probably not.
Is it a “fact?” Yes. But can a sophisticated business professional reasonably rely on it to make a decision? Probably not. And if reasonably relied upon, would it cause damage? Possibly, if they bought the condo at a higher price due to this misstatement. But perhaps not.
Too many contingencies here. Fraud? Probably not.
What about the earlier Trump statements extolling the “incredible spot to live” and guaranteeing they will “love it” and it’s the “best address” and saying their “friends will be jealous?” Opinion and not fact. And statement about the future. Not fraud.
Might other legal theories apply? Perhaps. Different states regulate similar conduct differently. And different states also have slightly different standards for fraud. If in doubt, check with a lawyer.
Does the statement or conduct increase negotiation effectiveness?
Finally, if you consider it moral and no legal problem exists, evaluate its effectiveness.
Does Trump’s puffery work, assuming he was that “real-estate official” who spread the rumor of the royals’ alleged interest?
Trump stated, “It certainly didn’t hurt us.” Short-term, he’s almost certainly right. Long-term might be a different story.
Personally, I have a moral problem with stating a untrue fact like this. And while it’s probably legal, it’s sleazy. Effective? Not worth the possible short-term benefit. I want a reputation as a straight shooter.
Trump’s Strategies and Tactics:
- Trump consistently used over-the-topo exaggerations in many negotiations, with few restrictions.
- Trump considered “truthful hyperbole” in many negotiation environments to be morally and legally acceptable and effective.
- Too much exaggeration is counterproductive.
- Consistently engaging in unacceptable puffery will negatively impact your reputation and effectiveness.
- “Truthful hyperbole” may constitute fraud or cross other legal lines.
- A “straight-shooter” reputation will lead to greater long-term effectiveness than the opposite.