In any negotiation, be prepared to stay in control and make well-informed decisions. A clear plan, a firm understanding of your goals, and knowing your limits are essential. Being prepared gives you the confidence to navigate the negotiation process effectively and reach the best outcome.
Have you ever noticed how buying a car at some dealerships can drag on? Or wondered why it takes ages for the sales manager to give you a price? This delay is often due to a phenomenon called “Escalation of Commitment.” It means that the more time and effort we invest in a decision, the harder it becomes to walk away—even if it’s no longer the best option.
But beyond car dealerships, what does Escalation of Commitment mean for us in a B2B setting?
In business negotiations, some people think, “I’ve put so much into this deal, and I’m so close to closing that I can’t back out now.” This mindset can be risky, especially if the other side is well-prepared.
Before you start any negotiation, it’s important to have a clear plan. Know what you want, what is an acceptable offer, and what is the absolute minimum you’ll take. This will help you stay confident during the conversation and avoid making concessions that are not in your favor.
Also, have a backup plan. What will you do if you cannot reach an agreement? Having a fallback gives you the power to negotiate without feeling pressured into a bad deal.
A negotiator who is not well-prepared risks making significant compromises or even walking away with nothing.
Back to car dealers (forgive me!), I recently had an unpleasant experience with a salesperson who gave me an outrageously high price for a new car. As an experienced negotiator, he was using something called the “Anchoring Bias.”
The Anchoring Bias occurs when the first piece of information presented (often the price) heavily influences how subsequent information is evaluated. In this case, the dealer used a high price as a starting point, making any lower offer appear more favorable.
Even skilled negotiators can fall for the anchoring bias. We may know our business well, but we can still be susceptible. The best way to avoid this trap is by preparing ahead of time. Understand what really drives value in the market, because price isn’t the only factor. (By the way, for my car buying experience, I was prepared, went elsewhere, and got a better deal!)
Anchoring Bias and Escalation of Commitment are just two hardball negotiation tactics that can be used against us in negotiations. Of course, there are others too, but that is a story for another time.
To negotiate successfully, it is essential to have thorough preparation, heightened awareness, and the ability to recognize and counter hardball tactics like Anchoring Bias and Escalation of Commitment. Further, training in negotiation skills can make a significant difference by equipping you with the strategies needed to stay in control, make informed decisions, and avoid common pitfalls. By being well-prepared and staying focused throughout the process, you’ll ultimately gain the upper hand.
Improving Communications’ Negotiating Skills ► Into Action program provides negotiators with the tools they need to counter hardball tactics and negotiate sound business deals.
10 Hard-Bargaining Tactics to Watch Out for in a Negotiation – Harvard Law Website
How to Handle 7 Types of Hardball Negotiation Tactics – AffordAnything.com
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