Most negotiators are familiar with the negotiating rule that you never accept the other party’s first offer. On the surface, the reason for this rule seems obvious – it is unlikely that the other party’s initial offer is going to be especially favorable to you, or the best deal you can get. You are there to negotiate, not to grab what’s on the table and run. If we were perfectly willing to accept whatever was offered, there wouldn’t be any negotiation.
However, in collaborative, win-win negotiations, there is another, less obvious reason that it is usually inadvisable to accept the first offer: if you jump on the first thing the other party puts on the table, it will make them feel bad.
Does that sound counterintuitive? If the first offer is unlikely to be in your favor, one might think that your acceptance would count as a “win” for the other party. In objective terms, that might indeed be the case.
In subjective terms, though – from the point of view of your counterpart – it is not a definitive win at all. He is far less likely to think he has won, and far more likely to wonder if he has been had. Why were you so willing to take his initial offer? What do you know that he doesn’t? Was his first offer too generous? He will think that he screwed up, and that he could have gotten a better deal.
Aside from this worry, there is also the fact that the harder you work to get something, the more you will value it. This is a fact of human nature, and applies in negotiations as much as it does anywhere else. Something that is handed to you cheaply and without effort will seem less valuable than something you have to fight and struggle and labor to get – even if it is the exact same thing.
These psychological factors mean that if you take the other party’s first offer, he will actually feel less satisfied with the outcome than he will if you proceed to negotiate – even if the final deal is not as favorable to him as the initial offer. In a win-win negotiation, the goal is to make sure both parties walk away satisfied, so the last thing you want to do is rob him of that feeling – you have to make him work for the deal, or he will not be happy with the outcome.
Thoughtful Negotiation
This does not mean that you should summarily dismiss the first offer out of hand, without thinking about it. Take it into careful consideration – even if it is not a deal you are willing to accept (and it probably won’t be), the other party’s first offer can tell you a lot about his goals and interests. What does his offer indicate about what he is willing to accept? He does not expect you to accept the offer. He is anticipating that you will attempt to negotiate a deal that is more favorable to you, so he has effectively set a parameter for the way the negotiation will progress.
Use the first offer as a basis for trading concessions. Every offer should be met by a counteroffer until both parties are satisfied that their interests have been met or exceeded. Remember never to give a concession without asking for one in return. Maintain a focus on both parties’ underlying interests and goals rather than becoming stuck in hard-line positions.
If you work together to create mutually beneficial trade-offs, you may be able to increase the size of the pie to achieve a final deal that is even better for both parties than the initial offer.
Never Accept, But Always Consider, The First Offer
The other party’s first offer can provide valuable insight into his true goals and interests, and can stand as a basis from which to build the negotiations, so consider it carefully. At the same time, remember the old rule that accepting the first offer is almost never a good idea.
If you simply accept the other party’s first offer, not only are you less likely to get everything you want, he will be left wondering if he could have gotten an even better deal. This is a recipe for mutual dissatisfaction, which is not the result we are seeking with the win-win approach! Make him work for the deal - you will probably get more, and he will actually be happier with the outcome!
Baker Communications offers leading edge Negotiation Training solutions that will help you address the goals and achieve the solutions addressed in this article. For more information about how your organization can achieve immediate and lasting behavior change that leads to bigger wins during negotiations in any setting, click here.
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