Is Negotiation a Science?

It used to be thought that ‘he who shouts loudest’ would win a negotiation. Scientists have since discovered surprising psychological insights regarding how to be effective in negotiation. It makes interesting and useful reading. At some point we are all going to have to negotiate in our lives. That might be a starting salary for a new job, trade terms with a buyer or even at home when we negotiate with a child as to what time they go to bed!

So, what is the ‘science’? Here are some psychological techniques that you can use the next time you enter into a negotiation of any kind.

1. Framing Effect: If we go into a negotiation with a standpoint of a win/lose rather than a win/win, then you have a 50% chance of losing. If you position it as a win/win, you will come out as the winner, as will the other party. The win-win mindset is part of the framing effect in psychology. The framing effect states that a person responds to a given choice based on how it is framed – whether that be a win or a loss. We create our own internal framing influence ourselves to the likelihood of an outcome. If we view the event as an opportunity for two wins, then we increase our odds of getting what we want. So think positive!
2. Widening the scope: Takes the framing effect a little further. You are more likely to find win-win by increasing the scope of the negotiation by adding a range of alternatives or considerations. This can aid in value perception as you can create multiple offers that have the same notional value for you, but they may be viewed differently by the person you are negotiating with. When you propose these offers, you can determine what is important and of value for them based on their responses.
3. Anchoring: By stating a number/price/fee first in the negotiation you are creating the starting point of the negotiation. If you want the outcome of the negotiation to be a low price, then you should state a ludicrously low price. If you want the outcome of the negotiation to be a higher price, then you should state a ridiculously high price. This helps frame the conversation. For example, if you are asking a client what their budget is for a marketing campaign, aim high and suggest a number above what you need. The buyer will then think they need to be somewhere nearer to it in order to deliver what they want to deliver. Psychologist Daniel Kahneman believes anchoring is "the most robust phenomena we've discovered in psychology." To use this technique in negotiation, make sure you are the first to say a number so control is with you.
4. Prospect Theory: Is a method of understanding how people make choices, especially when the choices involve a degree of risk. In any negotiation, there is some level of risk.

When you offer certainty instead of money, you are alleviating one form of risk. According to Professor Morris Altman, "People have a strong preference for certainty, and are willing to sacrifice income to achieve more certainty." Therefore in negotiation, ensure you are clear as to what the other party is guaranteed to get from the deal.

By applying just some of these scientifically proven psychological insights, you should feel more confident in your approach in negotiation. Ensure your positioning is a win/win and don’t be afraid to be the first to put a number on the table and give some guarantees with the proposition. Psychologically for you and for your buyer, you are more likely to get a mutual agreement.

If you want to know more about techniques and theories for successful negotiation, please contact us at: help@pureblueocean.com