This Month's Topic:
What You Can Do to Offset the "First Offer" Anchoring Effect
Last month I focused on when to make the first offer and suggested that making the first offer can be beneficial because it has an anchoring effect. This month we will look at what to do if the other side beats you to the "first offer" punch.
Leigh Thompson of Northwestern's Kellogg School of Management, recommends that you do the following:
1. Plan ahead. It is essential that you plan your opening offer before you hear your opponent's demand -- otherwise you risk being anchored by it.
2. Think about your own opening number, ignoring your opponent's. In fact, think about any number other than your opponent's. This has been found to completely negate the otherwise powerful impact the other party's first offer might have on you.
3. Immediately re-anchor. This diminishes the prominence of the opponent's initial offer as an anchor point in the negotiation; signals your willingness to negotiate; and, will serve as an anchor to an opponent unaware of anchoring's effects.
4. Do not adjust your target. It is extremely important not to be "anchored" by your opponent's offer. An effective counteroffer moves the focus away from the other party's offer as a reference point.