Photo: West Point
Negotiation is the key to getting what you want, whether in the boardroom or anywhere else.Luckily there’s a science to it, as established by countless psychological studies.
BI Contributor Eric Barker, who blogs Barking Up The Wrong Tree, has compiled the best scientific insights.
'In this research the authors examined whether conversational dynamics occurring within the first 5 minutes of a negotiation can predict negotiated outcomes. In a simulated employment negotiation, microcoding conducted by a computer showed that activity level, conversational engagement, prosodic emphasis, and vocal mirroring predicted 30% of the variance in individual outcomes. The conversational dynamics associated with success among high-status parties were different from those associated with success among low-status parties. Results are interpreted in light of theory and research exploring the predictive power of 'thin slices' of behaviour (N. Ambady & R. Rosenthal, 1992). Implications include the development of new technology to diagnose and improve negotiation processes. (PsycINFO Database Record (c) 2007 APA, all rights reserved)'
Source: Thin slices of negotiation: Predicting outcomes from conversational dynamics within the first 5 minutes. from Journal of Applied Psychology - Vol 94, Iss 6 by Curhan, Jared R.; Pentland, Alex
An article in the latest edition of Current Directions in Psychological Science reviews studies on the best starting points to increase the final price in either negotiations or auctions. In general, start high in negotiations, start low in auctions.
It turns out that negotiations, where several parties are invited to discuss a price, and auctions, where people can include themselves by jumping in when they want, are quite different psychologically.
The article, by business psychologist Adam Gilinsky and colleagues, notes that starting prices are a form of 'anchor' - a piece of information which is known to affect subsequent decisions. As the authors note, anchoring has a powerful influence on our reasoning:
An anchor is a numeric value that influences subsequent numeric estimates and outcomes. When people make judgments, their final estimates are often assimilated to--that is, become more similar to--the initial anchor value (Tversky & Kahneman, 1974).
For example, in one of the best-known anchoring studies (Tversky & Kahneman, 1974), participants were exposed to an arbitrary number between 0 and 100 from the spin of a roulette wheel and then asked to estimate the percentage of African nations in the United Nations: Participants whose roulette wheel landed on a relatively high number gave higher absolute estimates than did participants whose wheel landed on a lower number.
Even outside of trivia questions, few psychological phenomena are as robust as the anchoring effect; it influences public policy assessments, judicial verdicts, economic transactions, and a variety of psychological phenomena.
The evidence suggests that in negotiations, a high starting price most often leads to a high final price, as the anchoring effect seems to work in a relatively undiluted way (with the caveat that completely ridiculous starting prices could prevent any deal being reached).
There's an interesting aside in the article, mentioning that you can protect yourself from high anchor points from other people by focusing on your own ideal price or your opponents weaknesses, as found by a 2001 study, or by considering why the suggested price might be inaccurate, as found by another study published in the same year.
It also turns out that, contrary to conventional wisdom, making the first offer is also a good strategy:
Many negotiation books recommend waiting for the other side to offer first. However, existing empirical research contradicts this conventional wisdom: The final outcome in single and multi-issue negotiations, both in the United States and Thailand, often depends on whether the buyer or the seller makes the first offer. Indeed, the final price tends to be higher when a seller (who wants a higher price and thus sets a high first offer) makes the first offer than when the buyer (who offers a low first offer to achieve a low final price) goes first.
In contrast, for auctions, starting with a low price is generally more likely to lead to a higher final price. The researchers note this is likely due to three factors: price rise in auctions seems to be driven by social competition and so starting with a low entry point encourages more people to join in; once someone has bid, they have made a commitment which is likely to encourage them to continue; and finally, more bids leads us to infer that the item has a higher value.
It's not a huge article so is worth reading in full if you're interested in economic reasoning. Luckily, the full text is available as a pdf pre-print if you don't have access to the journal.
You've got to get emotional. Smiling can help. And if it's not a highly justified complaint, you'll look more credible by getting ANGRY:
Emotion displays do not only signal emotions but also have social signal value. A study was conducted to test the hypothesis that expressing anger when complaining may lead to positive outcomes for the complainant because anger signals goal obstruction and hence the presence of real harm. The results suggest that the social signal value of anger enhances the credibility of the complainant and hence leads to better compensation, but only when the complaint itself presents room for doubt. For highly justified complaints the additional expression of anger does not add information and is discounted. In contrast, showing an affiliative-smiling demeanor was found to enhance credibility for both types of complaints. Overall, the present research confirmed the important role of emotion expressions as social signals. Copyright © 2008 John Wiley & Sons, Ltd.
Source: 'When scowling may be a good thing: The influence of anger expressions on credibility' European Journal of Social Psychology Volume 39 Issue 4, Pages 631 - 638
Ever since studying negotiating in school I've been fascinated with it. I've posted about the subject a few times in the past: Here are the seven most powerful persuasion techniques, how to use the good cop/bad cop technique, a great method for getting a deal on a car, the optimal starting price for negotiations and auctions, and how to easily make more money on eBay.
When consumers talk to each other about products, they generally respond more favourably to abstract language than concrete descriptions, according to a new study in the Journal of Consumer Research.
'In a series of experiments, we explored when and why consumers use abstract language in word-of-mouth messages, and how these differences in language use affect the receiver,' write authors Gaby A. C. Schellekens, Peeter W. J. Verlegh, and Ale Smidts (Erasmus University, The Netherlands).
In the course of their studies, the authors found that consumers who described a positive experience with a product (like a smooth shave with a new razor) used more abstract language when they had a positive opinion about the brand before they tried the product. 'When consumers were told that the product was a brand they did not like, they used more concrete language to describe a positive experience. Thus, consumers use different ways of describing the exact same experience, depending on whether they use a liked or disliked brand,' the authors write.
For a disliked brand, favourable experiences are seen as exceptions, and concrete language helps consumers to frame the experience as a one-time event, the authors explain.
On the receiver end, the studies showed that consumers responded differently to abstract and concrete language. 'In our study of receivers, we gave consumers a description of a positive product experience, and asked them to estimate the sender's opinion about the products,' the authors write. 'We found that perceived opinion of the sender was more positive when the description was cast in more abstract terms.' For descriptions of negative experiences, the perceived opinion of the sender was more negative when the description used abstract language.
'Our finding that abstract messages have a stronger impact on buying intentions can be translated straightforwardly into the recommendation to use abstract language if you try to convince someone of the (positive or negative) consequences of buying a product, or of following your advice,' the authors conclude.
'In this study, the authors investigated the effect of an individual's political skill on the relationships between 5 different impression management tactics (intimidation, exemplification, ingratiation, selfpromotion, and supplication) and supervisor evaluations of performance. To test these relationships, the authors used a matched sample of 173 supervisor-subordinate dyads who worked full time in a state agency. Findings showed that individuals who used high levels of any of the tactics and who were politically skilled achieved more desirable supervisor ratings than did those who used the tactics but were not politically skilled. Opposite results were found when impression management usage was low. That is, individuals who were not politically skilled created a more desirable image in their supervisors' eyes than did their politically skilled counterparts when they did not use these tactics. Practical and research implications for the findings as well as directions for future research are offered. (PsycINFO Database Record (c) 2007 APA, all rights reserved)'
Source: The Impact of Political Skill on Impression Management Effectiveness. from Journal of Applied Psychology by Harris, Kenneth J.; Kacmar, K. Michele; Zivnuska, Suzanne; Shaw, Jason D. --
'Two experiments are reported that examine the effects of caffeine consumption on attitude change by using different secondary tasks to manipulate message processing. The first experiment employed an orientating task whilst the second experiment employed a distracter task. In both experiments participants consumed an orange-juice drink that either contained caffeine (3.5 mg/kg body weight) or did not contain caffeine (placebo) prior to reading a counter-attitudinal communication. The results across both experiments were similar. When message processing was reduced or under high distraction, there was no attitude change irrespective of caffeine consumption. However, when message processing was enhanced or under low distraction, there was greater attitude change in the caffeine vs. placebo conditions. Furthermore, attitudes formed after caffeine consumption resisted counter-persuasion (Experiment 1) and led to indirect attitude change (Experiment 2). The extent that participants engaged in message-congruent thinking mediated the amount of attitude change. These results provide evidence that moderate amounts of caffeine increase systematic processing of the arguments in the message resulting in greater agreement.'
Source: 'Effects of caffeine on persuasion and attitude change: The role of secondary tasks in manipulating systematic message processing' from European Journal of Social Psychology Volume 37, Issue 2, pages 320--338, March/April 2007
'An empty store shelf tempts shoppers to buy the next best thing, according to a new study from the University of Alberta.
'Sold-out products create a sense of immediacy for customers; they feel that if one product is gone, the next item could also sell out,' said Paul Messinger, a professor at the U of A's School of Business who studied the sale of numerous items including ski passes and wine.
'Our research shows there's also an information cascade, where people infer that if a product is sold out, it must have been good and therefore a similar available product will also be desirable,' he said.
The study, published this month in the Journal of Retailing, found 61 per cent of shoppers would buy a particular five-hour ski pass for $20, but that figure rose to 91 per cent when they thought a 10-hour ski pass for the same mountain slope for $40 had sold out.
A similar study of Merlot wines found 49 per cent of consumers would buy a bottle if they had one choice, but when they thought a similar wine had sold out next to it on the shelf, nearly twice the number of shoppers would take home the available bottle.'
The fact is that good cop, bad cop is an effective tool for compliance because using it -- often in very subtle ways -- does apparently enhance the impact both the carrots and the sticks. In fact, this qualitative study is bolstered by experiments on negotiation teams by researchers Susan Brodt and Marla Tuchinsky showing that -- under most situations -- having both a good cop and a bad cop on a negotiation team is a winning strategy.
BUT there was also a twist we did not address in our research, and in fact, would have been tough to do as we were studying people in 'the wilds' of organizational life. Their research shows that starting with a good cop and then using a bad cop was not effective, that the method only was effective for negotiating teams when the bad cop went first and the good cop followed. So, this may mean it really should be called 'The Bad Cop, Good Cop Technique.'
The last time you bought a product online, you probably went through a logical analysis of alternative products, prices, features, and so on. And perhaps you really did. Research shows, however, that we are actually far from rational when we buy stuff online - a fact that no doubt that comes as little surprise to Neuromarketing readers. In fact, the order of presentation can be a huge factor in our final decision.
Research by Alexander Felfernig et al (Persuasive Recommendation: Serial Position Effects in Knowledge-Based Recommender Systems) tested web buying behaviour of outdoor tents by presenting buyers with four choices arranged in a horizontal row. Each tent had unique characteristics. The researchers varied the order of presentation for each buyer so that they could evaluate the effect of the order of presentation. (A mention in Neuro Web Design led me to this research.)
In a truly startling result, the first choice presented was chosen 2.5 times more often than any other. Despite the fact that the tents varied in their shape, their degree of waterproofing, and other presumably important characteristics, the order of presentation was by far the most critical variable in the selection process. How's that for logical decision-making?
Naturally, the subjects were all able to rationalize their irrational decision -- they chose the best value, the most waterproof, and so on. As is typical when our conscious brains try to explain why we do things, the reasons are seemingly convincing even if mostly bogus.
What does this mean from a practical web site design standpoint? Well, for one, you could put the product you'd most like to sell in front of the others. Perhaps it's your most profitable product, or the one in which you hold the most inventory.
From a more customer-oriented standpoint, I'd recommend putting your most attractive product up front -- the one which offers the best combination of value and performance, for example. This should maximise the chance of an order actually being placed, and should also be the most likely to create a good customer experience (and repeat orders).
Functional theories of reputation imply that individuals' reputations are tied to their history of behaviour. However, indirect evidence suggests that the relation between reputation and behaviour might be tenuous at best. In 3 studies, the authors tracked the development of reputations among individuals who engaged in multiple negotiation tasks across several weeks. The authors found that on average, individuals' reputations were only mildly related to their history of behaviour. However, the link between reputation and behaviour was stronger for some individuals than others--specifically, for individuals who were more well-known and received more social attention in the community. In contrast, for less well-known individuals, their behaviour had little impact on their reputation. The findings have implications for psychologists' understanding of reputations, person perceptions in larger groups, and the costs and benefits of social visibility. (PsycINFO Database Record (c) 2008 APA, all rights reserved)
Source: 'Are individuals' reputations related to their history of behaviour?' from Journal of Personality and Social Psychology by Anderson, Cameron; Shirako, Aiwa
Experts are more persuasive when they seem tentative about their conclusions, a study soon to be published in the Journal of Consumer Research suggests. But the opposite is true of novices, who grow more persuasive with increasing certainty.
In one experiment, college students were randomly assigned one of four variations of a restaurant review, praising a local Italian spot. In some versions, the reviewer was described as a famous food critic; in others, he was a technology worker at a local college with a penchant for fast food. Each of the critics expressed positive certainty about the restaurant's virtues in one variation, and tentative praise in another. Asked to evaluate the restaurant, the students who read the expert's review liked it much better when he seemed tentative; the opposite was true of the novice.
Zakary L. Tormala, a professor of marketing at Stanford's business school and one of the paper's authors, said these and other findings suggested that people do a cognitive double take when reviewers' expertise is mismatched with their level of certainty. That double take leads to greater involvement in the text, which helps the reviewer's message get across.
Would I rather be the first person to be evaluated, or the last?
New research suggests both have their advantages, and either is far preferable than being stuck in the middle. That's the conclusion of a study of the effects of position order on preference, just published in the journal Psychological Science.
'We found that early items always have an advantage, and later items have an advantage in longer sequences, especially when the choosers are knowledgeable about the choice options,' writes lead author Antonia Mantonakis, assistant professor of marketing at Brock University in Niagara, Canada.
This study examined the relationship between interactive attributes and the consumer browsing behaviour at e-commerce websites based on the two contending theoretical frameworks: uses and gratification theory and social cognitive theory. While the former assumes that consumers are rational and try to minimize their search and transaction costs through online shopping, the latter relaxes the assumption of rational consumers arguing that consumers can be impulsive from deficient self-regulation. From the empirical study of the top 65 e-commerce websites, this study found out that interactive attributes supporting each of the two contending theoretical perspectives coexist at e-commerce sites: some attributes promoting rational consumer¡¯s efficient shopping activity and the others enticing impulsive consumer¡¯s inefficient browsing behaviour. Even among the competing interactive attributes with the opposite directional influences, the sensory stimulus (the picture size of the products) turned out to be the most influential attribute for making e-commerce websites sticky by attracting and holding consumers in the websites.
A new study carried out by the University of Haifa and the University of Michigan found that motivation and performance is weakened when competing against a large group of people
The larger the number of examinees, the lower the average grade. This is one of the findings of a series of new studies carried out by scientists at the University of Haifa and the University of Michigan. 'It is a well-established fact that subjective factors influence our motivation to compete. Our recent studies have shown that objective factors, such as the size of a competing group, also have an effect on motivation,' explains Dr. Avishalom Tor from the University of Haifa's Faculty of Law.
Research the car carefully on the internet and decide exactly what you want.
Determine the colour, the extras, everything. Then, call every dealer within, say, a 20-mile radius.
When they answer, tell them exactly the car that you want. Then inform them that you are calling all the dealers in the area and asking about the same car.
You are going to buy the car at 5pm from the dealership offering you the best deal. You will ring back soon and seek a price -- the full price, with nothing at all left to be added on later.
The dealer may object that if he gives you a quote over the phone, the next dealer will just come in £50 lower. You simply tell him that, yes, this might indeed happen.
That is why, you explain, he has to give you the very lowest price he humanly can, so as to avoid anyone underbidding with a price the dealer would have been willing to accept.
When the witching hour arrives, you go to the dealer with the best offer, cheque in hand, and pick up your car. If there is any change in the terms, you go to the second-best showroom, although this shouldn't be necessary.
What has happened here? You have forced the salesman to provide you, in the form of his lowest price, all the information he has about the real cost of the car. The advantage has moved from the dealer to you.
Consumers remember the sounds of numbers in prices and associate certain sounds with value, according to a new study in the Journal of Consumer Research.
Authors Keith S. Coulter (Clark University) and Robin A. Coulter (University of Connecticut) studied the ability of number-sounds to convey meaning and influence price perceptions.
Previous research has demonstrated that people associate certain vowel and consonant sounds with perceptions of physical size. For example, front vowels (like a long a, e, i) and fricatives (like the English f, z, and s) have been shown to convey smallness, while back vowels (sounds like the /u/ in goose or the sound in foot) indicate largeness.
'Phonetic symbolism affects price perceptions because consumers typically process, encode, and retain numbers (and hence prices) in memory in multiple formats,' the authors write. Consumers encode what a price looks like and sounds like along with a relative numeric value that the price represents (such as, 'It is inexpensive').
'Thus, sounds associated with the auditory representation can impact the numeric value associated with the analogue representation--that is, small sounds can create the impression of big deals,' the authors write.
The authors found that number-sound effects were more likely to occur when a frame of reference (a regular price) was provided. And sometimes, the sounds of numbers created false impressions of value. For example, participants perceived a $10 item marked down to $7.66 to be a greater discount than a $10 item discounted to $7.22.
'Number sounds impact price magnitude perceptions only when consumers mentally rehearse a sale price, as they might do when comparing items on a shopping trip,' the authors write. 'Further, mental rehearsal of the same sale prices characterised by small phonemes in one language and large phonemes in another language can yield differential effects.'
Before you start, think about the stereotype of someone who excels at what you're attempting:
Previous research has shown that activating a stereotype can influence subsequent behaviour in a stereotype-consistent way. The present research investigates the role of self-efficacy beliefs in this effect. Specifically, we demonstrate that being primed with the stereotype of professors increases knowledge confidence compared to being primed with a less educated profession (Experiments 1 and 2), and that these higher self-efficacy beliefs result in higher performance at a general knowledge test (Experiment 2). These findings are corroborated in Experiment 3 that shows that participants primed with the stereotype of athletes show higher persistence in a physical exercise than participants primed with a stereotype less associated with persistence. Again, behaviour was mediated by self-efficacy beliefs. The findings are in line with the active-self account (Wheeler & Petty, 2001; Wheeler, DeMarree, & Petty, 2007) that proposes that priming with a stereotype influences a person's behaviour through altered self-representations.
Source: 'Think of Capable Others and You Can Make It! Self-Efficacy Mediates the Effect of Stereotype Activation on behaviour' from the journal 'Social Cognition'
Past research demonstrates that the majority of older adults (60 years and older) perform resource-demanding tasks better in the morning than in the afternoon or evening. The authors ask whether this time-of-day effect also impacts persuasion processes performed under relatively high involvement. The data show that the attitudes of older adults are more strongly affected by an easy-to-process criterion, picturerelatedness, at their non-optimal time of day (afternoon) and by a more-difficult-to-process criterion, argument strength, at their optimal time of day (morning). In contrast, the attitudes of younger adults are affected primarily by argument strength at both their optimal (afternoon) and non-optimal (morning) times of day. Process-level evidence that accords with these results is provided. The results accentuate the need for matching marketing communications to the processing styles and abilities of older adults.
Source: 'The effects of optimal time of day on persuasion processes in older adults' from 'Psychology and Marketing'
A seminal book on persuasion is here. I also recommend the author's more recent release Yes!: 50 Scientifically Proven Ways to Be Persuasive.
I don't necessarily mean to wave a clenched fist, but in any sort of negotiation -- and any conflict is a negotiation. In a study of bill collectors threats worked best when the person on the other side was nonresponsive and wasn't being negative. If they were being negative, it was best to encourage them:
We hypothesise that the effectiveness of threats and encouragements is contingent on the intended recipient's level of negative affect, as evidenced by his/her negative affective display. Therefore, bargainers can be more effective if, as they make offers, they condition any threats or encouragements on the recipient's affective display. We test this hypothesis using 5561 verbal exchanges that occurred during 192 telephone conversations between credit collectors and debtors. Collectors were most effective in motivating debtors to discuss terms to resolve their debt if they: (1) threatened recipients who were nonresponsive and did not show any negative affect; and (2) encouraged recipients who displayed negative affect. This result suggests that making threats and encouragements contingent on a recipient's displays of negative affect may be an important but frequently overlooked component of bargaining.
Source: 'When threats and encouragements are effective in bargaining: The case of credit collectors' from the journal 'Cognition and Emotion'
This sort of jives with what I believe since it presents threats almost as a last ditch effort to a nonresponsive negotiation partner. Generally, I'm not a big fan of threats. My friend John (who was part of the Program on Negotiation at Harvard Law School) had this to say about threats:
A threat is 'I will do something that hurts you even if it's bad for me.' A warning is: 'This serves my interests and is bad for you.' It's better to try to convert your threats into warnings. Threats are no good, warnings are. So how do you present a warning?:
'The smartest thing in this situation for me is to_____. I don't want to do that but you're putting me in a situation where....'
NOW WATCH: Ideas videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.