A Guide to Developing Effective Negotiation Strategies

This article is an excerpt from the Shortform book guide to "Negotiation Genius" by Deepak Malhotra and Max Bazerman. Shortform has the world's best summaries and analyses of books you should be reading.

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What are the most important negotiation and influencing skills to have? How can you make your offer look more attractive?

Negotiations require more than just statistical skills. You also need to understand the psychology of negotiation and use influencing tactics to make your offer appeal to the other party.

Keep reading to learn vital negotiation and influencing skills that you need to have.

Use Influence Tactics to Make Your Offer More Attractive

Let’s look at how you can make your offer seem more attractive by using psychology-based negotiation and influencing skills that Deepak Malhotra and Max H. Bazerman recommend in their book Negotiation Genius.

1. Highlight potential losses. People tend to fear losing things more than they care to gain things. To make your offer sound more attractive, focus on what your counterpart stands to lose rather than gain.

(Shortform note: You can further highlight potential losses by making what you’re offering seem rare and scarce. According to Robert Cialdini in Influence, how scarce an item is usually reflects how valuable it is, so people will be more strongly motivated to jump on an opportunity that seems scarce.)

2. Bundle negatives and split up positives. People prefer to face one big loss rather than many small ones and receive many small gains over one big one. For example, when asking for concessions, you might ask for them all at once. When giving concessions, split them up and offer them separately throughout your negotiation. This minimizes the pain of losses and maximizes the joy of gains.

Hedonic Adaptation and Loss Aversion Affect Our Perception of Losses and Gains

Hedonic adaptation might explain why we get more pleasure from many small gains over fewer large gains. Hedonic adaptation describes our tendency to grow accustomed to positive changes and return to a baseline level of happiness. It takes us more time to get used to numerous small gains than a single large one, which is why separating positives into smaller portions increases pleasure. 

When it comes to losses, however, some studies show that people don’t experience loss aversion (or the heightened sensitivity to losses versus gains) for small losses, which runs counter to Malhotra and Bazerman’s belief. Therefore, it may be worthwhile to consider discussing losses separately if they’re small as this may make people less averse to them.

3. Use the “door-in-the-face” technique. Make an initial extreme demand that your counterpart will likely refuse. Then, ask for something less extreme—what you really want. Your second demand will seem like a concession and sound much more reasonable in comparison, which makes your counterpart more willing to comply.

(Shortform note: Getting your counterpart to say “no” to your initial extreme demand also gives them a sense of control, which Chris Voss writes is one of two basic emotional needs people have that affect how comfortable and cooperative they are during negotiations. After they say “no” to your extreme demand, they may be more willing to agree to your real demand simply because they feel more in control and believe they’re freely choosing to comply rather than being pressured into it.)

4. Use the “foot-in-the-door” technique. Conversely, you can make a small, easy demand your counterpart will likely agree to. Then, ask for what you really want from them. Because they already complied with your previous demand, they’ll feel committed to continue helping you.

(Shortform note: This technique is effective because people naturally want to behave in consistent ways. After agreeing to the first response, people may feel inclined to agree to the second simply to be consistent with their self-perception.)

5. Justify your demands. The authors cite studies showing that people are more likely to agree with a demand if you provide a reason for it—even if the reason itself isn’t very convincing. This is because our brains are hardwired to help others with legitimate needs to form mutually beneficial relationships.

(Shortform note: In Poor Charlie’s Almanack, Charlie Munger refers to this phenomenon as the reason-respecting tendency, which says that people tend to work and learn better when given reasons why they should do something. However, this tendency works even with illogical reasons because we naturally dislike doubt, so even bad reasons are better than none at all.)

6. Use social proof. People tend to base their decisions on other people’s actions and opinions. To make your offer sound more appealing, show your counterpart how other people are interested in what you have to offer. For example, if you’re negotiating a salary at a job interview, you might discuss offers you’ve received from other companies.

(Shortform note: Sometimes, showing that there’s high demand for what you have to offer can have the opposite effect: The reverse bandwagon effect, or the snob effect, causes people to avoid things because other people are interested in it.)

7. Give gifts to encourage reciprocation. The authors add that the size of the gift doesn’t matter. Any concession tends to make your counterpart feel more inclined to return something of value to you.

(Shortform note: In The Happiness Hypothesis, Jonathan Haidt writes that we have a strong obligation to repay others for evolutionary purposes: It encourages cooperation and increases our collective chance of survival. However, many people feel uncomfortable receiving gifts, precisely because of this strong compulsion to reciprocate. They may even feel like your gift is an attempt to control or manipulate them. Therefore, if you are offering a gift, it may help to do so more subtly or genuinely to ensure that your counterpart feels comfortable rather than suspicious of you.)

7 Negotiation and Influencing Skills to Have Under Your Belt

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Like what you just read? Read the rest of the world's best book summary and analysis of Deepak Malhotra and Max Bazerman's "Negotiation Genius" at Shortform.

Here's what you'll find in our full Negotiation Genius summary:

  • Why a good negotiation depends on your ability to create value
  • How to avoid common negotiation pitfalls and make attractive deals
  • How to decide whether or not to make the first offer

Katie Doll

Somehow, Katie was able to pull off her childhood dream of creating a career around books after graduating with a degree in English and a concentration in Creative Writing. Her preferred genre of books has changed drastically over the years, from fantasy/dystopian young-adult to moving novels and non-fiction books on the human experience. Katie especially enjoys reading and writing about all things television, good and bad.

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