Ask four different people the
following question but change the time frame for each:
What is the lead time to launch a new mineral water range?
1. In days
2. In weeks
3. In months
4. In years
The chances are their answers were higher the longer the time frame.
You have just managed their perception through anchoring. That's the art of changing people's perceptions using relativity. By placing an anchor, we change our perspective, as we tend to consider a product or service's value relatively rather than in its own right. Is £1,000 a lot of money? If you are buying a house it probably feels less than if you are buying an MP3 player. But it is worth the same in both scenarios.
Only use your own figures in negotiation as it anchors your position. If you want the other party to make a move, ask them how close to your figure they can get rather than how far they can move from their own.
One of the most common tactics used in negotiation is to open with a high starting price. This immediately changes the other party's perspective on the value of the product or service. Of course, it has to be realistic - opening too high will simply frustrate the other party. By definition the extreme opener is likely to be rejected. However, once you begin moving from this opening position towards the other party it gives them the feeling they are winning. As these moves get closer together this sends a signal to the other party that you are close to your break point.
Negotiation is where two people resolve differences, so by definition there is an inherent conflict. But it is better to use warm language to manage the aspirations of the other party. Trust is important, and the act of sharing information builds trust. Thank them for any concessions they make. Talk about moving together rather than how big the gap is. Talk about reaching a deal, avoid words such as "deadlock" and always try to use positive phrases (eg
"Under what circumstances could you achieve these terms?")
Avoid killer questions: if you ask someone their best price, that will force them to place a stake in the ground. Once they have done this it is unlikely they will move from it. If they do they will appear dishonest, which will kill their aspirations.
In essence you need to be firm on the issues and warm on the people. Let the other party feel like they are winning. If you want to beat the
other party this will cost you. There is no place in negotiation for ego.
Graham Botwright is a partner with The Gap Partnership specialising in commercial negotiation