“How To Use Anchoring Better In Your Negotiations” – Negotiation Tip of the Week
“Anchoring is a way to keep a negotiation within boundaries, but it can also be a way to weigh it down.” -Greg Williams, The Master Negotiator & Body Language Expert
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“How To Use Anchoring Better In Your Negotiations”
“We can pay your bill if you're reasonable about the settlement. That means, we're willing to start the discussion at $300,000, not the $650,000 that you indicated. Anything else is a none starter. Do you wish to start the discussion?” Those were the words of one negotiator to another. He was using a technique known as anchoring to advantage his position. How would you respond?
The following information will give you insights as to how you can use and defend the technique of anchoring in your negotiations.
What is anchoring?
Anchoring is a strategy that you can use to set boundaries in a negotiation. If you and the other negotiator agree to those boundaries, you have the confinements in which the negotiation will occur.
Be mindful, depending upon the depth of the negotiation, those outposts can be violated and lead the negotiation to unsavory places. Thus, be cognizant of the signals that indicate that the other negotiator might be in the process of abating those boundaries. At the first sign of such actions, note the cause that promoted the change in behavior. That will give you the clue about what to address if you wish to bring the negotiation back in bounds.
Why use anchoring?
As stated, anchoring is a way to set parameters around the negotiation. Therefore, if abided by, the agreement should allow for an easier flowing negotiation.
Boundaries in a negotiation can be a curse or a blessing. That's the inherent dilemma in using this strategy. If you're negotiating with a weaker negotiator, you can skillfully use anchoring to limit his abilities, while leaving your options open to explore the upper realms of possibilities. If you're the weaker negotiator (i.e. fewer resources, little leverage, etc.), you risk being susceptible to an unfavorable negotiation outcome.
Factors to consider when using anchoring tactics.
- Negotiation (resources, personalities)
As mentioned above, you should consider the resources that you and the other negotiator have at your availability. The more resources that a negotiator has, the more leverage he can bring to bear on the negotiation. That doesn't mean if you have fewer resources that you'll automatically fall into the weaker category. It means, if you're the weaker negotiator, you should attempt to limit the leverage of the other negotiator so he'll not be able to employ those resources against you.
In addition, consider the other negotiator's personality. Some negotiators don't like to take advantage of others. And other negotiators will stomp on you while you're down to keep you from getting up. The better you know the personality type that you're negotiating with, the better you'll be able to predict what he might do.
- Leverage points to consider (i.e. urgency, unseen negotiators, etc.)
If you have a grasp into the urgency, deadlines, and timeframes that the other negotiator needs to conclude the negotiation, you'll have insights into how you can use anchoring to lead him down the negotiation path. For example, if you know that he must conclude your negotiation before another phase starts with those that are not part of your negotiation, you can anchor his deadline to a timeframe. Then, if he doesn't make concessions that you request, you can slow the negotiation down.
Anchoring can be an extremely powerful strategy to use in your negotiation. Most negotiations contain some form of anchoring embedded in them with them identified as such. If you're more aware of anchoring in your negotiations, you'll be less likely to get sunk by them … and everything will be right with the world.
Remember, you're always negotiating!
After reading this article, what are you thinking? I'd really like to know. Reach me at [email protected]
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