4 Negotiating Traps That You Need To Learn How To Avoid

Decision making errors can often lead to us getting trapped during a negotiation
Decision making errors can often lead to us getting trapped during a negotiation
Image Credit: aaron.bihari

As negotiators, when we are trying to sell something the one thing that we all want to do is to avoid falling into any traps during our next negotiation. However, the problem that we all face is that no matter what negotiation styles or negotiating techniques we are using, traps can be difficult to spot and even harder to avoid. If we can learn what they look like and how we can avoid them, then we can boost our chances of being able to reach the deal that we want with the other side.

Trap #1: Valuing What You Have Too Much

How much is the thing that you are trying to sell worth to the other side? If we take a moment and think about when houses get sold, we can learn an important lesson. Some houses sell very quickly while others tend to sit around for weeks and even months. Why is this? Sure, location, location, location can play a role but generally there is something else going on here. All too often people think too highly of the property that they want to sell. Sure there is a good chance that our real estate sales professional is going to tell us what we should price our house at, but often people discount that advice and set the selling price higher.

What is going on in a situation like this is something that is called “the endowment effect”. The endowment effect leads us to overvalue just about anything we own, no matter how trivial it is. The endowment effect can lead sellers to have difficulty selling their item. If you want to avoid doing this then you should seek out unbiased appraisals from third-party experts such as real estate agents or financial experts. By focusing on the future, this may allow you to be able to look at your possession more rationally.

Trap #2: Letting The Focus Be On The Price

I almost hate to ask this question, but during a negotiation what is the most important goal for you when you are trying to make a sale? I’m pretty sure that most of you answered “getting the best price”. The good news is that this is pretty much what everyone says. The bad news is that a focus on price haggling prevents us from viewing sales negotiations as what it should be – a collaboration.

When you are stuck in a competitive mindset, you’re unlikely to investigate the other side’s needs or add more issues to the discussion, such as delivery timing, payment schedules, and other sources of synergy that could enhance the agreement and your bottom line. When you find yourself thinking too much about price, brainstorm ideas for adding more value to the deal, both on your own and with the other side.

Trap #3: Being Willing To Compromise Your Ethics

Every time that we enter into a negotiation to sell something, we are starting out with a bit of an ethical problem on our hands. No matter what you are going to be selling, you’ll probably know more about the item up for sale than the other side does. This situation is called information asymmetry. What this means for you is that you need to be careful not to take advantage of buyers during your negotiations. This is hard to do. Studies have shown that even negotiators who consider themselves to be highly ethical are at risk of compromising their moral principles when they know too much.

So what’s the best way to handle an ethical situation like this? During the negotiation examine whether your negotiating behavior is in line with your ethical standards. Should the other side be skeptical of your claims, you might propose adding a contingency agreement to your contract.

Trap #4: Making Unappealing Offers

The only way that you’re going to be able to reach a deal with the other side is if you can present them with an offer that they will be willing to accept. Sure, you’ll do your homework and attempt to determine what you need to put into an offer in order to spark their interest; however, there is always the possibility that you might make a mistake. One way you can screw things up is by failing to present your offers in the best possible light.

How can you prevent yourself from making a mistake like this? One way is to attempt to frame your offers as gains over the status quo. A possible way to go about doing this would be to let the other side know that you can’t meet the price that they want, but that you can offer them a discount off of what they are currently paying. This kind of offer could be appealing to them and could get you closer to closing the deal that you wanted.

What All Of This Means For You

Negotiators who are trying to sell something need to understand that the principled negotiation that they are preparing to get into is a dangerous place. There are lot of potential traps that they could fall into at any time. In order to be able to successfully make it through the negotiations and reach the deal that you want to create, you are going to have to first be able to recognize traps when you encounter them and then avoid them.

The first kind of trap that you need to be aware of happens when you value what you are trying to sell too highly. We see this a lot when houses that are for sale sit unsold for months on end. You need to seek out the advice of 3rd parties as to what the true value of your product is. Next we need to be careful to not allow the negotiation to focus too much on the price of the product. Take the time to identify other things that can be brought to the table in order to create a better deal for both sides. When you start a negotiation, you probably know more about the product that is being sold than the other side. This can create an ethical issue. You need to always be looking at your behavior and making sure that you are staying in line with your ethical standards. You’ll never be able to reach a deal with the other side if you don’t make appealing offers to them. Don’t present your offers in an unappealing light. Instead, consider the status quo and determine how your offer makes things better for the other side.

The good thing about the traps that we can encounter during a negotiation is that once we know how to identify them, they lose their hold over us. We need to always remain vigilant so that we don’t get surprised during a negotiation. Keep your eyes open and make sure that you don’t fall into any of the traps that we’ve discussed and you’ll be well on your way to getting that deal that you want.


– Dr. Jim Anderson Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™


Question For You: If you know too much about your product, is there any way that you can share some of that information with the other side before the negotiations start?


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What We’ll Be Talking About Next Time


So this thing that we call negotiating actually has two different parts to it. The first is called integrative bargaining and it is where we look for ways to increase the pie of value for all parties, often by identifying differences across issues and making tradeoffs. The second is where we use our negotiation styles and negotiating techniques to try to get as much of the pie for ourselves as we can. This part of the negotiating process is called distributive bargaining and it has to do with the process of dividing up the resource or array of resources that parties have identified. We are all familiar with the process of haggling over issues such as price. What is the best way to get the most out of our distributive bargaining?