28/9/2021 How to resist the pull of an AnchorRather like first impressions, the first number in a negotiation has a lasting effect, it ‘anchors’ everything else, acting as a cognitive bias, drawing the other party up or down towards that level. How do you counter one? When you know about the power of anchors you’ll want to be the person making the first offer. But it might not always be so simple. You might genuinely want to know what value the other side puts forward, you might need more information before committing to a number, it might be that the other side just beat you to it.
So in those circumstances what do you do to counter the pull of the anchor? Deflect attention. The first tactic is to deflect your opponent's opening position; don’t agree or disagree, instead ask questions, not about the offer, but about the wider negotiation, engage them in conversation, find out more information that helps to take you away from their opening position. You might even discuss a completely different topic. They go high, you go low You might look to counter their anchor; if they have gone high then you may be inclined to lowball, but you need to be aware of the danger here being that the parties may end up being so diametrically opposed that they are unable to move forward with negotiations. So if you’re going to go this route you need to put some justification around it, leave it open for a comeback. Reject it out of hand This can be high stakes but if the offer is far outside the bounds of a reasonable offer then you can say it’s not even a basis to negotiate; this works better if you can back up your position to show the true value. Know your own Position and Interests An anchor works has less weight if you know your own mind, and that comes from thorough preparation. You need to obtain as much information as you can, on the subject matter, the market, the other side (including whether they need to settle quickly or not). If it’s a litigation case, have the best idea on the chances of success, how much it’s going to cost to get to trial, how your client will fund that, and the same information for the other side. Considering writing out all the relevant factors Research has shown when you generate reasons why the anchor is inappropriate its effect is significantly mitigated, so list them out, brainstorm them with colleagues, turn your attention to why it’s wrong and formulate your own clear points to make to the other side to justify that position. Know your interests A first offer can have the effect of polarising the parties, leading each to stick to their positions. Always make sure you know what your interests are. It may be that price (within reason) is not the key issue, for instance your interests may be settling the dispute in order to be able to refinance before an expected hike in interest without having to explain the dispute to your would-be bankers. So don’t get lost in what’s good for you. Be prepared to walk away Finally, if the anchor is made by a belligerent or immovable opponent then you should never discount the fact that you might have to walk away from the negotiation, to re-engage at a later, by which time the anchor may have lost its pull, or you have new information that helps to move the other side. With these tips, you can resist the pull of the anchor, and help lead you to a beneficial outcome. Comments are closed.
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AuthorRichard Marshall is an Accredited Civil and Commercial Mediator with over 25 years experience as a Litigation Solicitor, as well as being a qualified Solicitor-Advocate. He is the founder of Striving to Settle, through which he works as a mediator and provides negotiation training. www.strivingtosettle.co.uk Archives
August 2022
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