Conventional negotiating wisdom has always said to let the other person make the first offer. Maybe their offer was higher than yours. By making the first offer, you could be leaving a lot on the table….right?
Robert Cialdini, the author of Influence: The Psychology of Persuasion, gives some insight into why you should make the first offer:
“Suppose you want me to agree to a certain request. One way to increase your chances would be first to make a larger request of me, one that I will most likely turn down. Then, after I have refused, you would make the smaller request that you were really interested in all along. Provided that you have structured your requests skillfully, I should view your second request as a concession to me and should feel inclined to respond with a concession of my own, the only one I would have immediately open to me— compliance with your second request.”
This tactic digs into human nature’s urge to reciprocate. Meaning when you give me something, I have a strong desire to return the favor and keep everything even. It’s the same principle behind free samples (because you end up buying more) and the excess of vendor fruit baskets in your office during the holidays (because you end up spending more next year).
After making the first offer followed by a concession, you’re evoking the reciprocal principle. The other person will see your concession as a “gift” to them, which of course has to be matched with a “gift” (concession) back to you. Humans want an even score.
Like all things in life, this will backfire if it is abused. Research has shown that if “the first set of demands is so extreme as to be seen as unreasonable, the tactic backfires. In such cases, the party who has made the extreme first request is not seen to be bargaining in good faith” (Cialdini).
So the next time you’re entering a negotiation, go against conventional wisdom and try making the first offer.
