Wednesday, August 17, 2011

Mediation Strategies--Making the First Offer--Don't Try to "Sell" It!

There's an opportune time to do things, a right time for everything on the earth: ... A right time to shut up and another to speak up...
Eccleciastes 3 from "The Message" by Eugene Peterson

A new study published in the Journal of Personality and Social Psychology strongly suggests that making too strong a case in presenting an opening offer in a negotiation is counter-productive. The study looked at negotiations where the parties made an opening offer with no explanation or persuasive argument and compared those negotiations to situations where the opening offer was accompanied by a persuasive argument in support of the terms being offered.

The study found that parties who made an opening offer without "selling" it ended the negotiations with results that were CLOSER to their opening offer than parties who made an offer and then tried to "sell it" to the other side. The explanation appears to be that "selling" the opening offer provokes counter-arguments by the other party and leads to counter-offers that are farther away from the opening offer than when the offer is presented without a sales pitch.

This study has significant implications in family law litigation and settlement negotiations. Both clients and attorneys would be well-served to leave the advocacy for another day when making an opening settlement offer. However difficult it might be to make the offer without a 'pitch', it is clear that restraint is going to save the client some money and get them more of what they want.

Bottom line: There is an opportune time for advocating, and opening negotiations is NOT it. When making an offer--leave the arguments for the courtroom and help your client get more of what they want.

Here's the reference for the research:

J Pers Soc Psychol. 2011 Aug;101(2):245-55.
Negotiation as a form of persuasion: Arguments in first offers.
Maaravi Y, Ganzach Y, Pazy A.
Faculty of Management, Leon Recanati Graduate School of Business Administration, Tel Aviv University.

PMID: 21500924 [PubMed - in process]


Diane Kaer said...

Interesting concept and one that I intend to use in future negotiations. I will post my results.

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