The Latest in Negotiation – Understand Behaviour to Achieve Success

RWS Banner NEWIf you've ever been on a old-style negotiation training course, you may have been taught the "opening offer" tactic. So let's assume you are the buyer, and you expect to pay £100 per item as the price for whatever it is you're buying. That would be a fair price, in your view. You sit down with the sales person, and before they have a chance to say much, you're straight in there with your opening offer.

"Right, I'm looking to pay around £20 for this," you say.

The sales person of course looks aghast, their jaw drops, they may fall off their chair (a specially uncomfortable chair that you're deliberately given them), and they struggle for words. But once they recover, and start negotiating from their side, you've got them at a disadvantage. They won't accept the £20, naturally, but they also can't possibly now start with the £150 that was going to be their opening gambit. Your chances of ending up at the £100 level, or maybe even lower, are better because you got in with that crazy, game-changing opening offer.

What do you think? Does this approach work? Frankly, I was always very sceptical. If we both know that something around £100 is the right price, doesn't me saying £20 make me look ignorant of the market or just plain stupid?

But until now, we have never had any proper evidence as to whether this technique might actually be successful. However, recent academic work in the field of behavioural psychology and decision making now provides a proper basis to discuss whether or not this is a good tactic for us to use.

So what's the answer, I hear you ask? Well, if you want to know, you need to come along to our Real World Sourcing session, 11am - 2.30pm on June 3rd at the Jugged Hare restaurant near the Barbican, London, sponsored by BravoSolution. I will be leading the workshop, titled, "New Approaches to Negotiation.". We will be looking at how the work of Nobel prize winner Dr Daniel Kahneman, author of the seminal book "Thinking Fast and Slow," might help us become better negotiators.

There is some really important stuff here that anyone who is serious about negotiation needs to know. It is also, I guarantee, going to be an interesting - and fun - session. We're going to make you question how you make decisions and how your own thought processes work (but don't worry, no-on will be personally embarrassed during the workshop, it is not that sort of session)!

We have just a handful of places left - the small fee covers a very good lunch and an excellent networking opportunity with a group of your procurement peers, so do take a look for more details and registration here.

 

Voices (2)

  1. alun@marketdojo:

    Sounds very interesting. I was always taught that if the opening offer was ridiculous (as with the case above, 80% lower then the market price), to tell them so and ask them to try again. In other words don’t negotiate from that position or you’re most likely onto a hiding to nothing.

  2. Dan:

    Interestingly, I was taught not to make the opening offer – if, say, you offer £50 for your opening price, you leave yourself at risk as they could have been prepared to sell it for £40.

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