Image Credit: Thomas Hawk
I think that it’s pretty safe to say that when we enter into a negotiation, we all have a fairly good idea of where we’d like to end up. However, the trick is finding out how to use our negotiation styles and negotiating techniques to get from where we are to where we want to be. That’s why it may not come as all that much of a surprise to you to discover that where you choose to start things out in a negotiation can have a very big impact on where things end up.
Where To Start A Negotiation
What we need to understand as negotiators is that how we start out a negotiation can have a very big impact on how the negotiation turns out. Our opening offer to the other side can have what is called an “anchoring effect”. What this means is that this offer can determine the range of possible outcomes that will be possible to get in this negotiation.
One of the problems that we often run into when we are starting out a negotiation is that we don’t actually have a starting offer. Instead, what we have is a starting range. A recent study of negotiators discovered that more than half said that they had made a range offer during their last negotiation. Generally speaking, using ranges in a negotiation has always been looked upon as a bad idea. It is thought that what will happen is that the person that you are negotiating with will see your range and then will only use one of the numbers. A buyer will use the low end and a seller will use the high end. Additional studies have been conducted and what they have shown is that if we know how to use them, a range offer can work for us.
The correct way to go about starting off a negotiation is to pick one number that represents what you’d like to get out of the negotiations. What you are going to want to do next is to then pick a number that represents just a little bit more than what you want to get. This process is called “bolstering the range offer”. What the researchers have found out is that by doing this you can get a better settlement while at the same time not damaging the relationship between both sides of the table.
What To Ask For In A Negotiation
During a negotiation you want to make sure that you don’t make the other side angry. The reason for this is because you may find yourself negotiating with them again at some point in the future. The power of opening a negotiation using a range is that it is a way to show the other side that you are open to negotiating with them and that you understand that they have needs also. One way to look at what you are doing is to view you as being polite. When others see you as being polite, then they will want to be polite back to you.
When you pick a price to open a negotiation with you will be having an impact on the other side’s beliefs about your reservation price – the price that would make you walk away from the negotiations. What we need to keep in mind when we start to use ranges in our negotiations, is that not all negotiation ranges are created equal. If you use a range of 5% – 25% then you’ll be able to capture most of the benefits of a range offer. It turns out that if you use a range that is wider, you’ll see fewer benefits.
We also need to be very careful about the direction of the range that we offer to the other side. What is called a “backdown range offer” occurs when we peg our desired value as the top value in the range. A better way to go about doing this is to make the value that we’d like to get the bottom value in the range that we present to the other side. Using a backdown range offer won’t get us the deal that we are looking for.
What All Of This Means For You
As negotiators, we need to understand just how important the positions that we take at the start of a principled negotiation are. Where we start a negotiation can have a big impact on where we end up in the negotiations.
When we are starting a negotiation, we need to decide what value best represents what we’d like to be able to walk away from the negotiations with. Once we know this value, we need to create a range around that value. Where we start can have an anchoring effect on the rest of our negotiations. We’d like to bolster the range offer by picking a number that is just a bit higher than the value that we’d like to get out of the negotiations. What we’ll discover is that when we do this, we often end up getting a value that is either exactly what we were looking for or a bit higher. We always need to keep in mind that we may end up negotiating with the other side again in the future. What value we present to the other side is sending them a message about what our reservation price for this negotiation is. When we are setting a range, we want to make sure that we don’t create a backdown range offer because that won’t get us the deal that we are looking for.
Understanding the role that our starting positing can play in a negotiation is key to getting the deal that we are looking for. If we present the other side with options that will lead them to selecting a solution that meets our needs, then we’ll be that much closer to getting the deal that we entered the negotiation looking for!
– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™
Question For You: If you discover that you’veyou’re your range incorrectly, do you think that you can change it during a negotiation?
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What We’ll Be Talking About Next Time
In the world of negotiating, there are a number of books that everyone knows about. One such book is the justifiably famous “Getting to Yes: Negotiating Agreement Without Giving In” book. Just about everyone has heard about this one and most of us have actually read it at one time or another. However, as we move though a day and prepare for our next negotiation, do we ever take any time to think about win-win negotiating? Sure we recognize the name, but would any of us actually know how to go about using this technique?