What is Offer Negotiation?
Whether it’s buying a house or signing a business deal, offer negotiation is common.
That doesn’t mean offer negotiation is always easy, even when parties hope to achieve an agreement. For example, research shows that people fall victim to a host of perceptual biases when assessing others. Therefore, be prepared to find out that your opponent is very different than you expected them to be – and perhaps less competitive than you expected.
One common mistake that leads to these biases for many people in an offer negotiation is failing to adequately prepare. Poor preparation also prevents you from using one of the strongest bargaining tools at your disposal: the first offer.
Making the first offer is often a smart move, especially if you have a strong sense of the value of the item or service being sold. The first offer often anchors the discussion that follows and, as such, can have a powerful effect on the final outcome. However, it’s risky to make the first offer when you have little knowledge about the bargaining range.
If that’s the case, you may be able to assess your counterpart’s priorities by setting up a MESO negotiation – a multiple equivalent simultaneous offer negotiation. This approach entails identifying several proposals that you value equally and presenting them to the other side.
Learn how to negotiate like a diplomat, think on your feet like an improv performer, and master job offer negotiation like a professional athlete when you download a copy of our FREE special report, Negotiation Skills: Negotiation Strategies and Negotiation Techniques to Help You Become a Better Negotiator, from the Program on Negotiation at Harvard Law School.
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