Business Negotiation May 13, 2014

Reaching an Agreement with Psychological Approaches

In my last post, we discussed that seven ways negotiators can use a psychological approach to move the opposing party toward settlement. Below are more suggestions to consider in your next negotiation:

Eight: Offer the other party a choice between acceptable choice A and acceptable choice B. It shifts the other party’s decision from choosing to agree or not to choosing between two choices which are both satisfactory.

Nine: Offer the other party a “multiple choice with a negative”: X, or Y, or Q, where Q is sure to be rejected as undesirable. The decision is then likely to focus on acceptable choices X and Y.

Ten: Make the final deal a little sweeter than the other party thought it would be. An unexpected bargain or treat carries special value.

Eleven: Provide a special benefit that cannot be offered later. This can be a price bonus, a special value-added service, a better discount, a stronger warranty, or better financial terms. Make the reason why it cannot be offered later as credible as possible or it will not influence the closure decision.

Twelve: People love a bargain. Find a way to create a bargain without giving much away.

Thirteen: Tell a story which supports closing the deal right now. I know a real estate broker in California who closed many sales in the boom years of the 1980s by telling prospective clients about people who had passed up big profits by hesitating to buy. His stories were all the more credible because such big profits were reported in the press every day. An appropriate story can make your drive toward closure more persuasive than a wealth of rational arguments.

People act in their self-interest. Most of the psychological approaches suggested here lead the other side toward closure because they take into account people’s needs and help relieve the ambiguity inherent in making the decision to close.