For those of you who have clicked into this piece thinking I am going to demystify one of the age old dilemmas facing lovelorn teenagers...I am afraid you are going to be a little disappointed!
I am in fact referring to how to make the first move in a negotiation.
I have spent the last few years running negotiation seminars and workshops around the world and without fail, regardless of the group I am teaching, I always ask the question...
'Who should make the first move in a negotiation?'
Inevitably, 8 out of 10 people in the room will respond by saying 'The other side'.
This response comes pretty much as standard, regardless of experience, seniority, geography, industry or culture. I have also watched hundreds of negotiation role-plays and case studies and seen many examples of people desperately avoiding making their offer first. Exchanges such as 'So make me an offer', 'No, you make me an offer', 'Well you are the seller so you should go first', 'No, I asked you to tell me'... are common fixtures in the early stages of the workshops I run.
Making the first offer in negotiation is in fact a much promoted strategy and various articles have been written about the impact of 'anchoring'. In short, this is the cognitive bias that sees even the smartest of people being too heavily influenced by the information that is first put on the table. This might be in relation to the price of a product or service, the terms of a contract or a salary increase. By making the first move in a negotiation you are essentially anchoring the other party to your starting point because right there and then, that is the focus of everyone's attention. This may lead the other party to shift their expectations about what they can get from the deal and in you walking away with a more favorable outcome.
Put simply, YOU should make the first move as that way you have more of a chance to grab and maintain the advantage...and yet we continuously look to the other party to get the ball rolling and go first.
So why does this cause us such problems? Why are we so unwilling to put our offer on the table and make the first move? More often than not, its uncertainty, lack of confidence and not enough preparation. Below I expose the common reasons I get given for not wanting to make the first move...and I provide some evidence and tips to help break out of the 'No, you go first' habit!
1: But I want to know what they are willing to give me
If you find yourself thinking like this...STOP! Negotiation is not about waiting to hear what they are prepared to give and then responding. It is about developing and presenting proposals and packages in such a way that you get them to agree to what you want. By waiting for them to set the boundaries as to what the agreement is going to look like you are walking into the trap of agreeing to a deal that is designed from their perspective e.g. it's going to work in their favour, not yours!
Do not wait to hear what they are willing to give you. Instead, do your research (see point 2 below) and let them know what you might be willing to give them.
2: What if I go first and I get my opening figure totally wrong?
This is where the importance of effective planning comes in. Many delegates tell me they are concerned that their opening position might be so inappropriate that they end up agreeing a deal far below what they could have got or annoying the other party so much that they end up deadlocking or coming to blows.
If you have effectively explored the product, service or market in question, researched your counterparty and their situation and are clear on your own value, worth and position then you should be able to craft an opening proposal that is both aspirational and realistic.
In addition, this is where the importance of 'opening extreme' or 'testing the water' comes in. Your opening offer should be designed to test just how much or how little they might be willing to accept. Don't go straight in with your 'best offer' as then you have nowhere to go...by opening extreme you can gauge their response, encourage them to respond and make alternative proposals that build consensus and agreement...all from a starting point that works in your favour.
3: Fear of rejection or looking stupid:
Let's face it... In negotiation you need to get comfortable with experiencing rejection. It is highly likely that they are going to reject your opening offer...and if they don't, it's highly likely that you haven't done your research properly and opened extreme enough.
Negotiation can be uncomfortable and awkward and a lot of that comes from the fact that when we negotiate we are often rejecting each other's requests. Try not to take it personally and remind yourself that your counterparty probably feel just as awkward and uncomfortable as you do (they just haven't told you that!)
A simple way to deal with this is to plan for the rejection and have a whole suite of alternative proposals lined up...so they don't like your opening move...not to worry, you have plenty more options for them to consider already prepared and ready to be presented...and all of them are simply a re-packaging of what you asked for in the first place.
And finally...if you don't get to go first...
Don't panic. Don't argue with them. Don't just agree to their first proposal.
Instead, take a deep breath and present them with your opening proposal...because then all of a sudden you have moved away from their anchor and suddenly everyone is focusing on what you want ...whether they like it or not.