Don’t Always Let Them Make the First Offer

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.

The Psychology Behind Software Customer Support


photo by gisellecfernandes


Social Rank has a great blog post about customer support and perception vs. reality. The post references the Customer Satisfaction Equation, brought to light by David H. Maister in his brief article on the topic titled “The Psychology of Waiting Lines“. Unlike most academic publications, this eight page article cuts right to the point. As a leader of a software support team, I couldn’t help but make connections between Maister’s psychological insights and the realities of software support. I recommend reading the entire article, but I’ve put together the customer support Spark Notes version below:


It’s hard to plan catch-up ball.

The corollary to this law is the proposition that there is a halo-effect created by the early stages of any service encounter, and that if money, time and attention is to be spent in improving the perceived quality of service, then the largest payback may well occur in these early stages. (page 2)


First impressions matter in customer support. Not only that, a good initial experience with the support team will positively influence all perceptions of your company. Your customer discover a bug? It won’t seem as bad if they’ve had positive experiences with support. I recommend your support team makes the most human connection possible with a new customer. In descending order of value: Face-to-face meeting, video conference, phone call, email. The opposite is also true – botch the customer’s initial perception of support and you’re fighting an uphill battle across the board.


Again, I appeal to common experience to reflect the fact that one’s ‘anxiety’ level is much higher while waiting to be served than it is while being served, even though the latter wait may be longer. There is a fear of ‘being forgotten’. (How many times has the reader gone back to a maitre d’ to check that his or her name is still on the list?). (page 4)


Some support issues or questions take a long time to solve – period. This doesn’t change the fact that the customer still gets very anxious while waiting for a solution. Giving the customer consistent updates at committed intervals will help quell the fear that the problem has slipped into a black abyss. Even if you don’t have a good update to give, there is still immense value in telling the customer “we are still digging into your issue and will report back every 4 hours until it’s resolved”.


On a cold and snowy morning, when I telephone for a taxi, I begin with the expectation that my wait will be longer than on a clear, summer day. Accordingly, I wait with a great deal more patience because I understand the causes for the delay. Similarly, if a doctor’s receptionist informs me that an emergency has taken place, I can wait with greater equanimity that if I do not know what is going on. Airline pilots understand this principle well; on-board announcements are filled with references to tardy baggage handlers, fog over landing strips, safety checks, and air-traffic controllers’ clearance instructions. The explanation given may or may not exculpate the service provider, but is it better than no explanation at all. (bolded by Dan for emphasis) (page 5)


We live in the real world where many factors can impact the level of support. It’s important to recognize these factors and give the customer a heads up on how it will impact service before they complain about it. Proactively telling a customer “Our engineers are currently prepping for this weekend’s release and will be slower to respond to your question” is much better than delivering the same message after the customer asked “why hasn’t my issue been resolved yet?!”


Naturally, justifiable explanations will tend to soothe the waiting customer more than unjustifiable explanations. A subtle illustration of this is provided by the practice of many fast food chains which instruct serving personnel to take their rest breaks out of sight of waiting customers. The sight of what seems to be available serving personnel sitting idle while customers wait, is a source of irritation. (page 6)


How many times have you been in Best Buy or Home Depot to see a crowded store of customers desperately looking for help and a pack of four employees talking in a group and not helping customers. Beyond frustrating.

People need to take breaks to stay sharp, but do it outside of the customer’s glare. On-site at with a customer? Avoid the desire to check your Facebook feed. The customer will build that into their expectations the next time they have a problem to solve. “Greg has time to check Facebook so I expect him to have plenty of time to resolve this issue”.


It follows from this principle that waiting for something of little value can be intolerable. This is amply illustrated by the eagerness with which airline passengers leap to their seats when the airplane reaches the gate, even though they know that it will take time to unload all the passengers ahead of them, and that they may well have to wait for their baggage to arrive at the claim area. The same passenger who sat patiently for some hours during the flight suddenly exhibits an intolerance for an extra minute or two to disembark, and a fury at an extra few minutes for delayed baggage. (page 8)


When a customer asks a easy question that can be answered easily, resist the urge to let it fall to the bottom of the pile. You may say, “…but the same customer has five other open questions that are much higher priority”. That may be true, but the customer perceives the “easy” easy question as low value and their expectations adjust accordingly. To meet that expectation, it must be answered quickly. This will show the customer that you’re providing solutions and buy time for those five other difficult questions.




Why I’m Long on Bitcoin

We will debate the pros and cons of Bitcoin for years — and that’s exactly why I think Bitcoin’s long term future is so bright. No doubt about it, Bitcoin has received huge amounts of press the past 8 months. The spike in Google Search Trend speaks for itself.

And yet, despite the press, I don’t think most of us understand the true value of Bitcoin. I’ve been researching Bitcoin for several weeks: reading articles popping up on Twitter and annoying my smarter friends for details. The litghtbulb didn’t go off until reading Marc Andreesen’s NYT article “Why Bitcoin Matters“. Here’s the crux:

Bitcoin is an Internet-wide distributed ledger. You buy into the ledger by purchasing one of a fixed number of slots, either with cash or by selling a product and service for Bitcoin. You sell out of the ledger by trading your Bitcoin to someone else who wants to buy into the ledger. Anyone in the world can buy into or sell out of the ledger any time they want – with no approval needed, and with no or very low fees. The Bitcoin “coins” themselves are simply slots in the ledger, analogous in some ways to seats on a stock exchange, except much more broadly applicable to real world transactions.

Every day, the lightbulb is going off for thousands of new people.

Every day, more and more shops are accepting Bitcoin as a form of payment (see Overstock and TigerDirect).

So while we debate Bitcoin’s value and long term prospects, more companies will accept and more people will pay with Bitcoin. When we come up for air to see who won the Bitcoin argument, the market will have already spoken.