Some years ago, there used to be a show on television called “To Tell The Truth.” It was about the appearances of reality and reality itself. The guests all claimed to be a certain person, but only one was telling the truth. The problem facing the show’s panel was to find out who the real person was by asking penetrating questions. When all the questions had been asked, the panel members voted on who was truthful. The master of ceremonies then said, “Will the real Mr. Jones please stand up.” More than half the time the panel was wrong.
In negotiation we have a similar problem which I call, “Will the real target please stand up.” Imagine you are a salesperson. Your company has submitted a proposal for selling chemicals at $1.00 per pound. Before the negotiation, your boss tells you, “Try to get the $1.00 asking price, but if you can’t get that, 98 cents is good. Under no circumstances go below 95 cents.” Which is the target: $1.00, $.98, or $.95? I believe that most of us would say that 98 cents is the target rather than 95 cents. But in the world of buying and selling, is 98 cents the real target?
One chemical company in the mid-west tried a marketing experiment. They told salespeople in Chicago that the asking price was $1.00 per pound. They also told them to try to get 98 cents if they couldn’t get $1.00. Under no circumstances were they allowed to close at less than 95cents. In Cleveland they did only one thing differently. They told the Cleveland salespeople not to close at less than 96 cents.
What was interesting is that most sales in Chicago closed at 95 cents. In Cleveland, most sales closed at 96 cents. It became obvious that how targets were set had a lot to do with results.