January 5, 2024

Splitting The Difference

This month I received an email from a client who frequently hosts Karrass In-House negotiation seminars for their employees. They asked me to elaborate on what happens when, in the negotiation process, you agree to "split the difference" to finalize an agreement.

This is an interesting negotiating topic. My research shows that "splitting the difference" can provide a simple, quick way to reach agreement. Many people use this approach all the time. After all, people are used to giving and getting equal shares at home, at restaurants, and at birthday parties. Splitting in the middle is simple. Not splitting in the middle is full of problems. It brings up a tough question: "If not in the middle, where else?"

Think about it. When someone offers to split the difference, haven't they just offered you half the difference as a concession? Rather than saying "OK," your next thought should be: "How much of the remaining difference do I need?"

In professional negotiating "splitting the difference" can be a mistake. This is true if you are negotiating prices, hours a job will take, development costs, determining which department does what, scope-of-work issues, skill too much. If a buyer suggests a spilt, sellers should respond, "I can't afford to." Then provide more levels of people required to work on a project, ownership of intellectual property or software code, and a multitude of other negotiating situations.

Things that are equal may not necessarily be equitable. Splitting the difference is certainly equal, but it may not be equitable or fair. And, it may end up leaving both parties to the negotiation unsatisfied.

I know buyers who use the spilt approach. They make a low starting offer, raise it only slightly, and then say, "Okay, let's split the difference." These buyers know it's hard for a salesperson to say no to such a reasonable request. The salesperson gets sucked into the split and then discovers they give away information to justify why a simple split is not equitable and use this as an opportunity to explore other options.

What about the buyer? What happens in the buyer's mind when a salesperson quickly says, "OK you've got a deal," to a request to split the difference? The buyer suddenly realizes they could have done better. It was too simple. They should have asked for more.

My research proves that the best agreements come when both parties are satisfied. In this example, chances are both parties have lingering doubts about the agreement. Both think they could have done better. Neither is fully satisfied.

You have a better opportunity to reach a mutually satisfying agreement if you resist the urge to "spit the difference." The first person to suggest a split immediately establishes a benchmark which the other person, even if they think the split is reasonable, should resist accepting. Take more time – remember the value of time and effort we discuss in the Karrass negotiating seminars. Take the time to explore other options, other ways to look at the split, re-define what will be split up and what cannot be split up, see if there is a way to "expand the pie" before you start dividing up who gets what. Your time and effort in this discussion may reveal options neither party had thought of before, and open a route to a truly "both-win" agreement. Even if you end up agreeing to the originally suggested split, this extra time and effort will help raise the satisfaction level of both parties. "We got the best agreement that was available."

THE PROGRAM WAS GREAT! MY SEMINAR LEADER AND THE STRUCTURE OF THE COURSE KEPT ME CONSTANTLY STIMULATED. I NOW AM BETTER PREPARED TO GO INTO AN IMPORTANT NEGOTIATION MEETING AND STAY IN CONTROL, WHILE FINISHING THE MEETING SATISFIED.

Deanna D.
CASE MANAGER at THE JACKSON LABORATORY

IF YOU HAVE THE TRAINING BUDGET AND TWO DAYS TO SPARE, YOU'LL STRUGGLE TO FIND A PROGRAM MORE FAR-REACHING, ON-POINT, AND INSTANTLY IMPLEMENTABLE.

Jeff G.
BUSINESS DEVELOPMENT MANAGER at THE M.K. MORSE COMPANY

EXCELLENT COURSE, BRINGS MORE CONFIDENCE IN MY ABILITY TO NEGOTIATE. I THINK THIS COURSE IS A MUST FOR ALL EMPLOYEES WHO DEAL WITH CUSTOMERS.

John S.
CHIEF ENGINEERING MANAGER at EXXONMOBIL

THIS WAS VERY EFFECTIVE WITH A STRONG FOCUS ON BOTH-WIN NEGOTIATING.

Kathleen L.
SENIOR ANALYST at BLUE CROSS/BLUE SHIELD OF MICHIGAN

THE KARRASS CLASS WAS THE SINGLE BEST TRAINING CLASS/SEMINAR I HAVE EVER ATTENDED. EVERY TIME WE DID AN EXERCISE IT TAUGHT YOU WHAT TO DO DIFFERENTLY NEXT TIME. THANKS.

Kim C.
PROCUREMENT at AMERICAN EXPRESS

THIS PROGRAM HAS GREATLY INCREASED MY CONFIDENCE AND ABILITY TO NEGOTIATE FOR MYSELF AS WELL AS MY COMPANY.

LaDonna E.
SENIOR STRATEGIC BUYER at HALLMARK

THE NEGOTIATING CLASS WAS VERY INFORMATIVE. THE INSTRUCTOR PROVIDED AN INSPIRATIONAL MESSAGE THAT CAN BE APPLIED TO EVERYDAY LIFE.

Mary S.
INTERNATIONAL SOURCING at FMC TECHNOLOGIES

WE NEGOTIATE EVERY DAY OF OUR LIVES, BOTH PERSONALLY AND PROFESSIONALLY. THIS COURSE DEFINES THE PROCESS AND PROVIDES TECHNIQUES TO ACHIEVE SUCCESSFUL RESULTS.

Phillip H.
VICE PRESIDENT at GE

PRIOR TO THIS CLASS I FELT AS THOUGH I WAS GETTING EATEN ALIVE BY INTERNAL NEGOTIATIONS WITH SALES REPS. NOW I FEEL PREPARED TO CHALLENGE WHAT THEY ARE SAYING AND BET TO THEIR REAL NEEDS.

Steve Q.
PLANNER at HONEYWELL

MANY PEOPLE FAIL TO ACHIEVE THEIR POTENTIAL BECAUSE THEY DON’T SEE THE OPPORTUNITIES TO NEGOTIATE A WIN/WIN AGREEMENT WITH THEIR COLLEAGUES. THIS CLASS IS AN EYE OPENER TO THIS DYNAMIC..

Stuart B.
CONTRACTS MANAGER at HEWLETT-PACKARD
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