Negotiation anchoring is a tactic used in negotiations to influence the other party's perception of what is a reasonable outcome. It involves setting an initial reference point or "anchor" to which subsequent negotiations are compared. Anchoring can be used to set expectations, influence perceptions, and steer negotiations towards a favourable outcome.
The anchor can take many forms, such as a price, a timeframe, or a proposal. The objective of the anchoring technique is to influence the other party's perspective and position the negotiation in a favorable direction. Negotiation anchoring is a powerful tool that can be used to gain leverage in a negotiation and improve the chances of achieving a favourable outcome.
An example of negotiation anchoring is when a seller sets a high initial price for their product or service, which serves as an anchor for the negotiation. The buyer then negotiates a lower price based on the seller's initial offer. The seller's high initial price sets the anchor for the negotiation and makes it more likely that the final price will be closer to their desired outcome.
Another example of negotiation anchoring is when a job candidate provides a high salary range during salary negotiations. The high anchor sets the expectation for the employer and can influence the final offer, even if it is lower than the initial range provided.
Negotiation anchoring is a powerful technique used in negotiations to influence the other party's perception and position the negotiation towards a favorable outcome. Anchoring can take many forms and is a useful tool for gaining leverage and setting expectations in negotiations. It is important to use anchoring ethically and strategically to achieve a favorable outcome.