In sales negotiations, making the first offer is often a smart move. The first offer can anchor the discussion that follows—and that anchor can exert a powerful pull on the final outcome.
But if the other party makes the first offer, preparation matters even more. You’ll need to frame your counteroffer carefully.
So what is framing in negotiation? Framing involves shaping how your offer is perceived by pairing it with a rationale that improves its appeal. When you frame a counteroffer with a clear, credible explanation, you increase your odds of re-anchoring the discussion on terms that work better for you.
In this article, we present four effective sales negotiation techniques, beginning with how to frame your counteroffers for maximum advantage.
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Discover step-by-step techniques for avoiding common business negotiation pitfalls when you download a copy of the FREE special report, Business Negotiation Strategies: How to Negotiate Better Business Deals, from the Program on Negotiation at Harvard Law School.
Choose the Best Rationale
Two common types of rationales in business negotiation are (1) constraint rationales and (2) disparagement rationales. A constraint rationale focuses on what’s holding you back from accepting the other side’s offer, such as not being able to afford what they’re asking. By contrast, a disparagement rationale critiques what the other party is offering—for example, by suggesting the quality is low.
In a study by Alice J. Lee and Daniel R. Ames of Columbia University, sellers were significantly more persuaded by buyers’ constraint rationales than by disparagement rationales.
Why does this matter? The researchers offer two explanations. First, criticism embedded in a disparagement rationale may come across as inaccurate or rude, prompting sellers to dig in on price. Second, when buyers explain genuine financial constraints, sellers are more likely to take those claims at face value.
As a result, when responding to a seller’s offer, buyers tend to get better outcomes by explaining why the deal exceeds their limits rather than by trying to diminish the value of what’s being sold.
Similarly—though this has not been directly tested—a seller responding to a buyer’s opening offer may benefit more from explaining why she cannot go lower than from attacking the buyer’s BATNA, or best alternative to a negotiated agreement.
3 Other Top Sales Negotiation Techniques
Here are several other effective negotiation skills for sales professionals:
- Highlight losses rather than gains. People are more motivated to avoid losses than they are to achieve gains, as psychologists Amos Tversky and Daniel Kahneman famously demonstrated.
In one study, researchers asked homeowners to participate in a free energy audit and then listen to a sales pitch for insulation products. When the pitch emphasized avoiding future losses rather than achieving savings, homeowners were significantly more likely to buy.
Because losses loom larger than gains, framing the same price as something the buyer stands to lose often has more impact than framing it as a potential gain, write Deepak Malhotra and Max H. Bazerman in Negotiation Genius.
- Split up losses; combine gains. Tversky and Kahneman also found that people prefer to receive gains in increments but prefer to absorb losses all at once.
Most people would rather:- Find a $10 bill two days in a row than a single $20 bill
- Lose $20 once rather than lose $10 on two separate days
Applied to sales negotiations, this insight suggests a simple tactic:
- When making concessions, divide them into smaller steps
- When asking for concessions, bundle them into a single request
This approach can make concessions feel less painful and demands more acceptable.
- Avoid overjustifying. A well-known 1978 psychology experiment by Ellen Langer, Arthur Blank, and Benzion Chanowitz showed that even a weak justification can be more persuasive than no justification at all.
In the study, people were far more likely to let someone cut in line at a copier when the request included the explanation, “because I have to make some copies,” than when no explanation was given.
However, later research complicates the picture. In a 2011 paper, Yossi Maaravi, Yoav Ganzach, and Asya Pazy found that weak justifications can backfire when requests are substantial or easy to challenge.
The takeaway for sales negotiators is straightforward:
If your product’s value is already clear, resist the urge to pile on fragile explanations. In some cases, letting a well-anchored offer stand on its own can be more effective than overexplaining.
What other sales negotiation techniques have you found to be effective? We’d love to hear from you.
Claim your FREE copy: Business Negotiation Strategies: How to Negotiate Better Business Deals
Discover step-by-step techniques for avoiding common business negotiation pitfalls when you download a copy of the FREE special report, Business Negotiation Strategies: How to Negotiate Better Business Deals, from the Program on Negotiation at Harvard Law School.
