Negotiation strategies that make money

The book influence by Robert B. Cialdini, PH.D. has become an international bestseller. This book on persuasion explains why people say ‘yes’ and how to apply this knowledge. He discusses six common principles which he also calls mental short cuts as we rely on mental short cuts every time we are faced with a decision. He explains how to use these principles, how to become a skilled persuader and how to defend yourself from them. In this post we will discuss the third principle of influence – Social proof The principle of social proof works because we are social creatures and we are therefore more likely to do something if other people are doing it too. At the same time, we are also not likely to do something if no one else is. Social proof can come in many ways; we are all influenced by it one way or another. Influencer approval A thought leader or influencer/celebrity approves a product or service. If George Clooney drinks Nespresso, then it must be good. Testimoni...

The book influence by Robert B. Cialdini, PH.D. has become an international bestseller. This book on persuasion explains why people say ‘yes’ and how to apply this knowledge. He discusses six common principles which he also calls mental short cuts as we rely on mental short cuts every time we are faced with a decision. He explains how to use these principles, how to become a skilled persuader and how to defend yourself from them. In this post we will discuss the second principle – Commitment and Consistency Our actions tend to be in line with what is consistent with our previous actions. If we make a promise we would not want to break it, especially when we have made that promise publicly and voluntarily. It makes us accountable. Cialdini describes an experiment that had been staged by a psychologist Thomas Moriarty at a beach in New York City. In the study a researcher would put a towel on the beach a few feet away from a randomly chosen individual. The researcher would l...

The book influence by Robert B. Cialdini, PH.D. has become an international bestseller. This book on persuasion explains why people say ‘yes’ and how to apply this knowledge. He discusses six common principles which he also calls mental short cuts as we rely on mental short cuts every time we are faced with a decision. He explains how to use these principles, how to become a skilled persuader and how to defend yourself from them. In this post we will discuss the first principle – RECIPROCITY Picture the scene, you are going out for coffee with a colleague and you are paying for the coffees. What is your colleague’s most likely reaction? ‘Thank you for the coffee, I will get it next time’. This is the law of reciprocity that is applied in most situations meaning if I give you something you feel obliged to give me something in return. In negotiation this rule is essential. When we negotiate, we start with a more extreme demand first so we can then concede. If you concede fir...

Kahnemann describes two different systems of thinking. Fast thinking is characterised by using cognitive shortcuts, called heuristics, to make acting possible in an overstimulated environment. Slow thinking is a systematical and analytical step-by-step approach of thinking. We collect small pieces of information, put them together and carefully consider options. This approach takes longer since we systematically evaluate the overall picture. Reliance on institution through fast thinking increases in a complex negotiation, where negotiators reach a state of cognitive overload. At such times, we naturally shift away from slow thinking to fast thinking. Taking the time to logically reason through every decision can be costly, even leading to decision paralysis. However, to think slow in a negotiation can limit cognitive biases and is therefore not as bad as you might think. Use 3 integrative strategies to encourage slow thinking in a negotiation: #1 Make a list . By w...

Emotional labour is a process, your own emotions are modified to achieve a better negotiation outcome. As we practice to recognize our own and the other party's’ emotions and learn how to regulate them we build emotional competence. This helps to automate emotional regulation, protecting cognitive resources and raise our awareness in a negotiation. Being resilient in a tough negotiation is not easy. Emotional competence can be used in negotiations to achieve the best deal. #1 Recognize your own emotions. Reflect the origin and cause of uncomfortable emotions that can be counterproductive in a negotiation. Learn how to deal with them more constructively through role play and preparation. #2 Recognize the emotions of the other party. Listen, show empathy and view the issues from their perspective. #3 Regulate your own emotions. Re-frame the situation to re-evaluate a complex negotiation. By doing this you distance yourself from the situation emotionally regulating your impu...

The trigger for this post was a headline I read in the paper “Cashed-up older buyers pay $325k over reserve”. A 3-bedroom house in Brunswick, a suburb of Melbourne, was sold at auction in December 2019 for 325,000 $ above its reserve. The auction must have been frantic with the auctioneers playing the potential buyers off against each other and creating a competitive environment. This is dangerous as people then lose sight of the true value and the want to win takes over and subsequently people end up paying too much. So, what is happening to us when we are in an auction and why do we tend to overbid? A study conducted by a team of neuroscientists and economists at the NYU tried to understand exactly that question. Our prefrontal cortex is the part of our brain where our logical and complex decisions are performed. Our unconscious decision-making process is performed in a different part of our brain which is called the Striatum. This also the part of where our fight or flight...

If you don’t ask you don’t get.   If you don’t negotiate you will always pay the full price. If you don’t negotiate your salary you will never be able to get the pay rise that you deserve.    People don’t just hand something to you, you need to ask for it and then negotiate. If you have a fear of negotiating, chances are you try to avoid it. If you avoid negotiating, you will never lose your fear of it. What you need to do is expose yourself to negotiations; embrace it by practising negotiating as often as possible. Fortunately, there are many opportunities where you can practice and improve your negotiation skills daily. The following five facts about negotiation might give you a different perspective of negotiation and as a result you might approach the negotiation differently. 1.       A negotiation starts with a rejection People often fear rejection and tend not to move past it whereas receiving a rejection means that this ...