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Why You Should (Almost) Always Make Your First Offer

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For some reason negotiations tend to be difficult Considered a professional professional skill rather than a basic life skill. work student and salesperson You learn a lot about how to trade, but most of the rest of you don’t learn much about trading. Negotiation methodThis is the house and Cars are very stressful for normal people.Negotiations are strange to us.

But everyone negotiates regularly and learns a few things. Fundamentals for establishing mutually beneficial transactions is an important skill that we should all master.of The challenge of learning how to negotiate is often A mixture of emotions, psychology and mathematicsLeverage can come and go between parties, and emotions can play as much a role as finances (As anyone who overpaid for a house because they “fell in love” can attest)As such, learning basic negotiation skills is essential. Let’s start with why you should always seriously consider making your first offer.

The AAnchor Eeffect

You’ve probably heard that you should always present your first offer when negotiating, with a vague explanation for setting terms. This is actually generally Good advice – because there is something called anchoring effect.

The anchoring effect is all about prejudice. The irrational tendency of humans to rely on the first data they obtain regardless of its value. We all have this prejudice. Research confirms that the first number you hear influences your values. When the seller makes the first offer, Final price is usually higherand one study found that 85% of negotiation results are close to the initial offer.

The crazy part is that the first piece of data does affect us even though we know it shouldn’t. 1 experiment, People were asked to write down the last two digits of their social security number and asked if they would pay that amount for various items. They were then asked to bid on the same A given “seed” number is completely No matter what, people with higher social security numbers are bidding much higher on everything.

Anchor drop

The irrational power of the anchoring effect is why the first offer (sometimes called “dropping the anchor”) is a powerful tool. During negotiationsBut it doesn’t always work. To get the most out of it, you need to know how to use it.

There are a few things to consider when planning to drop anchors into negotiations.

  • become aggressive. People often worry that being overly aggressive in their opening offers or prices will insult or intimidate their opponents. An aggressive first offer is the best strategyThe aggressive first offer was a ‚Äúcompromise,” while ultimately getting a better deal (“door in the face“Technique).
  • Don’t be ridiculous. Note that “aggressive” does not mean “insane”. An aggressive initial offer can set a goalpost in your favor, but throwing away an offer that doesn’t quite match reality can make the other person question whether you’re serious, competent, and trustworthy. there is.
  • specifically. The more accurate the initial proposal, the more effective it will be in establishing objections.A classic example is home pricing: A list price of $255,500 wins a higher bid than a list price of $255,000 or $256,000.

You can make the most of the irrational power of the anchoring effect by considering the details of your first offer.

other negotiationssuccess factor

The anchoring effect is powerful enough to be used in negotiations, but it’s not a magic spell. The first thing to keep in mind is that if you are dealing with an experienced and trained business or sales professional, they know all about it and trained in how to “unlock” the anchorit’s often as simple as ignoring it and pivoting into detail, or providing an immediate “counter-anchor” to redefine the term.

The key to successfully anchoring your first offer is actually information. The ideal scenario for dropping an anchor is when you know more than your opponent. If the other person has access to more information than you do, it’s very difficult to drop the anchor.For example, if a homeowner knows the real estate market in his area Well they know how much their property is worth and your positive anchor is simply visible Ridiculous. Or consider a job interview. The interviewer knows the budget salary for a position, but you don’t. If the initial salary request is well above that budget, it will not have the intended effect.

On the other hand, if both know the same amount of information, anchors are predictable and expected, and are easy to dissolve. And if you’re both in the dark, the first offer is mostly a guess, making it impossible to know if you’re actually helping yourself with shots in the dark.

That said, making an initial offer has been proven to have beneficial psychological effects on the negotiating partner.So Use this force. Do your research first.

Why You Should (Almost) Always Make Your First Offer

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