Deploy the steps above in your next negotiation, and you will come out ahead in value creation! Master the art of spotting anchors in your interactions. You can’t just say "no," but you can certainly say, "This position is a no-go as a basis of negotiations." You will have to mention a couple of reasons why and propose to start over with a realistic and acceptable basis. It doesn’t sound like we are on the same page let’s start over to ensure that we are taking into account all the aspects that are in play. Whenever somebody mentions a number, mentally acknowledge that it’s an anchor and make a conscious effort to dismiss it.Īn effective counter to the offer that is well beyond reasonable is: The best thing you can do with an anchor is reject it. Make a commitment to resume the conversation later, allowing yourself time to do the research and understand the true value of whatever discussion is focused around, rather than relying on information provided by the other party.
If you don’t know your numbers and are in a situation where you realize you are being anchored, pause! If you are looking for power in negotiations, know that knowledge is the greatest power a human can possess. If you know that your skills, experience, and potential are worth $70,000 on the market, then when an offer that is substantially below that target is made, you will see it for what it is – an anchor. That will allow you to realize when an anchor is being used to low-ball or diminish your worth and the value that you bring to the company. Know your numbers.ĭo the research and prepare for negotiations, so you know what is acceptable and what is out of bounds. Know that when you aren’t well informed on the subject, and somebody provides information to you as a point of reference, our quickly adaptable brains rely heavily on the data that is available right away.Īpproach all negotiations with caution, and reflect on the information that is being provided, carefully treading through any point of references and seeing them for what they are – effective anchors. The very first step toward any improvement when it comes to human biases is recognizing their sheer existence.
THE ANCHORING HOW TO
It doesn’t matter who makes the first offer, as long as you are aware of the anchoring effect and how to offset it.īelow are four steps you can take to free yourself from the constant fear and uncertainty of who should go first, as well as to be sure that, regardless of who makes the offer, you still hold a lot of cards in your hands to negotiate a good deal. Word of wisdom: Knowledge is the best antidote to anchoring! If you know that your house is valued at $500,000, and you receive an offer for $350,000, you will immediately know it’s a low-ball offer without even entertaining the idea of further discussion.
If you are relying on certain numbers that were disclosed to you as a point of reference, you have effectively been anchored by the other party. Word of caution: Extreme anchor values appear to create larger anchoring effects. Once you hear how many other candidates they have, you might be swayed to relax your goal. In this case, the first part of the sentence is leverage – introducing competition – and the second part is information and anchor – they have not just you, but three potential candidates.
We have three other qualified candidates that fit within this budget. The second sentence is leverage, and a strongly emotional one at that. The first sentence is nothing more than just information – they are disclosing the budget for the position – yet it can serve as an effective anchor for you if you were planning on asking for $70,000. If you want to work for a world-recognized leader in retail, and be a part of an award-winning team, we have to come to an agreement on the pay. We were budgeting $50,000 for this position. Consider the following interaction when you are trying to negotiate a job offer:
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