The best negotiators challenge conventional wisdom and do not follow the conventional rule that tells us: Do not make the first offer. Instead, they decide whether to make the first offer by changing the question from “Who should make the first offer?” to “Who wants to affect the other side’s expectations?”
First offers act as an anchor point, drawing the other side into your suggested range. In fact, studies have shown that 85 percent of the time, first offers correlate with the final outcomes. And even if the first offer is not within a reasonable range, it still affects the negotiation's outcome.
For those of us who think we are hip to the game, savvy, and sophisticated, the impact of first offers shows that we are still suggestible. As proof of that theory, participants in a college study were asked to state their Social Security number before estimating the number of physicians in Manhattan. They all picked numbers that correlated with and were close to their Social Security number.
Before deciding whether to make the first offer, ask yourself:
1. What do I want to achieve by making this offer?
2. Do I have enough information to make this offer?
3. How do I want to affect the other side's expectations?
4. How will this offer affect the other side's expectations?
5. What kind of offers and counteroffers do I need to make to strategically move
them closer to my bottom line?
6. Should my offer be firm or flexible?
7. How can I propose the offer in a way they can accept?
When engaging in any mediation or settlement process, put these negotiating skills to use to help you achieve the optimal outcome. This free monthly One Minute Negotiating Tip is based on Linda Bulmash's highly acclaimed column Negotiate Like The Winners.
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