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Your Weekly Walkaway - Should You Put Your Number On The Table First?
The Weekly Walkway highlights negotiation in its ‘good’, ‘bad’ and sometimes ‘downright ugly’ forms. Newsletter Issue No. 22 (24th February 2023)
What to expect?
Quote of the Week - "If you anchor without a plan you risk wrecking the deal"
Tactic of the Week - The Anchor
Thought of the Week - Should You Put Your Number On The Table First?
Remember: You are a negotiator!
You are always managing some form of conflict, a difference of opinion or interest.
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QUOTE OF THE WEEK
"If you anchor without a plan you risk wrecking the deal"
Giles Morgan (Kahvay)
TACTIC OF THE WEEK
Anchoring is a powerful process of using an initial statement or number to frame your negotiation. Your anchor can be any thing you wish to use to establish a reference point for the negotiation.
Once your anchor is established, you can use it to influence your counterpart's perception of value, and it becomes the starting point for your negotiation. You can use the anchor to reference all counteroffers from and your counterpart may be more willing to make concessions or adjustments based on it.
The psychology behind anchoring is rooted in cognitive psychology.
Yawn… but put simply, it is based on the idea that people, you included, rely on lazy mental shortcuts when making judgments and decisions.
Anchoring is a particular type of shortcut that relies on people making decisions on the first piece of information they receive. Once that number, that statement, is in their head it fixes itself and becomes ‘their’ reference point.
THOUGHT OF THE WEEK
Should You Put Your Number On The Table First?
I know, I know…It's an age-old debate. Should you put your proposal on the table first or wait for your counterpart to make the first move?
Show me yours, and I’ll show you mine.
Well, here it is. Let us try and put the argument to bed, once and for all. So let me put some reasons for and some against and then let you make up your own mind.
Let's start with some good reasons why you shouldn't put your number on the table first.
One of the primary benefits of letting your counterpart make the first proposal is that it provides you with information. And you remember, information is power! So as long as you do not allow that information to ‘anchor’ your lazy mind, then you may gain valuable information about their position and priorities. By allowing them to speak first, you can gain valuable insights into;
how much they value your offering;
what they are looking for;
what they are willing to give up to achieve their goals.
As long as you are not manipulated by ‘their anchor,’ this information can be helpful in developing a strategy and making informed decisions.
If there is a history of distrust or maybe you want to foster a positive relationship, you might want to consider allowing your counterpart to speak and make the first proposal. You will show ‘willingness’. Willingness to trust, listen and consider their ideas. This opens the possibility, the opportunity, of creating a more collaborative climate and increasing the chances of a mutually beneficial outcome.
OK, so that was ‘for’. Now let's give some good reasons why you should put your number on the table first.
Anchor. Anchor. Anchor.
The most obvious benefit of speaking first and putting your proposal on the table first is that it anchors your position. And as you’ve read above in The Tactic of The Week, ‘anchoring’ is a powerful psychological concept that influences your counterpart’s perception. Anchoring is a cognitive bias that plays a significant role in negotiation, influencing your counterpart’s expectations that improves your position.
If you want to establish respect and credibility and show your counterpart that you are serious, then speak first. Making the first proposal will demonstrate that you have thought carefully about the negotiation and have a well-developed plan.
Speaking first gives you control. It allows you to set the tone and direction of the negotiation. By proposing first, you get to frame the discussion around your proposal, control the agenda and steer the negotiation towards your desired outcome.
Anchor. Anchor. Anchor.
So, there are and always will be valid arguments for both approaches. Putting the argument to bed is, therefore, impossible!
In general, it is not accurate to say that negotiators should never let their counterparts make the first proposal. But it is clear that speaking first and putting your proposal on the table first is advantageous.
Negotiation is all about control, and by setting the agenda, establishing your credibility, and anchoring the negotiation, you take control.
Next week we will take a closer look at ‘Giving Satisfaction’, Employing The Law of Reciprocity and Finally, how we can move, concede, to ‘Test Assumptions’.
We’d love to read your comments or thoughts. What do you think?
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