We negotiate agreements all the time, but many people like you still don’t feel comfortable making deals. While there are lots great books with detailed advice, I wouldn’t want you to miss out on these three tricks that behavioral scientists suggests could tip the scale in your favor. Best of all, this paragraph contains all three tricks! Take 1 to 2 minutes and find out exactly what they are.
1. “Many people like you…”
Humans are social animals, and we’re constantly looking to others for clues on how to act. Knowing what the majority of people do creates powerful motivation for people to act similarly. For example, if a waitress at a restaurant told you, “We have two specials today, but many people like you are loving the filet mignon,” you would likely give the fillet mignon much more consideration than the other options.
In a business setting, this phrase can have significant impact with suppliers. For example, when negotiating payment terms, you can use a phrase such as, “Most of our suppliers like you offer us credit terms of Net 60.” This wording can give your supplier a strong inclination to offer you the same.
One caution many people like you should consider is not overusing the phrase (see how it gets old rather quickly?). Also, be sure that you’re honest about what you’re recommending. If most people don’t really do what you’re suggesting, then consider another approach.
2. “Take 1 to 2 minutes…”
A recent Columbia Business School study suggest that you should always quote a range with your real value on bottom. Doing so will increase your chances of getting the quoted price you want.
For example, let’s say you ask me how much I’ll charge for a small consulting project. If I was hoping to get $100, then quoting you a range of $100 to $120 not only increases the chances that you’ll be happy to agree at $100, but it also opens up the possibility that we settle at $110. The chart below details the bolstering strategy.
If you’re on the buying end, flip the strategy around. If you want to buy something for $20, offer 15-20 bucks, and the seller will likely be more willing to settle at $20.
The best part about this technique is that it can be used right away with very little risk. The next time you quote a price, include a range with a higher number and you’re more likely to get what you quote.
Read more about the details of the study from Columbia’s article: When It Comes to an Opening Number, Sometimes the Best Bargaining Move Is to Offer Two. The above chart is from the article as well.
3. “I wouldn’t want you to miss out…”
Another quirk about human behavior is loss aversion. We are disproportionately worried about losing opportunities. Mentioning this aversion can trigger people to change their approach and be more willing to agree to a deal.
For example, negotiating better payment terms with a supplier might sound like this, “we have a lot of great growth opportunities next year, and I wouldn’t want you to miss out on extra orders from us because of tight credit terms.” Considering the possibility of missing out on future opportunities may be the key to getting the concession you need.
This technique, and the “many people like you” phrase, are both explained further in an excellent Freakonomics podcast, The Maddest Men of All.
Good luck in your future negotiations, and let me know if these tricks worked for you.