Top
1.800.628.2783
1.800.628.2783
Advertisement
Image of two young businessmen using touch pad at meeting
Insights

The Neuroscience of Negotiations

Wednesday, April 25, 2018
Advertisement

“You have to earn the right to be of influence with someone,” explains Gary Noesner, who served as an FBI hostage negotiator for 23 years.

He often talks about the power of empathy and letting the other side be heard. “This process of trust building is called the behavioral change stairway. You listen, show interest, then respond empathetically, which leads to rapport building, which then leads to influence.”

Though his engagements were high stakes with lives at risk, he has long maintained that his methods “apply equally to the kinds of negotiations we face in everyday life.” At Richardson, we agree.

No matter your role, you need to be a strong negotiator. Negotiations play out not only in verbal exchanges, but also in the complex biases and psychological tendencies that underpin our responses. Mutually beneficial outcomes require an understanding of how these principles work. Here, we look at the neuroscience behind three strategies for smarter negotiating.

Priming Sets the Stage for Mutually Beneficial Outcomes

Too often, we think of selling and negotiating as two separate ends of a timeline. In truth, they exist together on a spectrum. Every moment of selling involves some amount of negotiating. Therefore, every conversation places another brick in the road toward closing a sale. Effective sellers understand this spectrum and take early steps to “prime” the negotiation. Priming is the basic principle of prompting a person to think a certain way.

Priming is critical to a successful negotiation. Research shows that doing so means “a seller can increase a customer’s satisfaction without sacrificing profit.”

Researchers published in Psychology & Marketing conducted simulated negotiations. Those who were “primed to consider fairness demonstrated more cooperative behavior.” Additionally, “fairness-primed buyers consequently had a more positive attitude toward the seller.” These findings illustrate that mutually beneficial outcomes are possible so long as both sides agree that fairness is a priority.

Advertisement

Usually, priming is achieved through trust building. The outcome: sales professionals encourage a customer to recognize the value of a proposed solution. Doing so helps customers change their mindset from “someone is trying to sell me something” to one of “this solution can get me to where I need to go.” Trust signals fairness.

Sharing Information Overcomes the “Fixed-Pie” Bias

Sellers must identify all demands early in the negotiation process. Doing so avoids the common pitfall of the “fixed-pie bias,” which is the notion that the more one gains, the more the other loses because the size of the potential gain is fixed.

Overcoming the fixed-pie bias requires sales professionals to identify all demands early in the negotiation process. Research published in The Journal of Organizational Behavior and Human Decision Processes shows that expectations of a fixed-pie “lead to suboptimal agreements.” Too often, we consider a negotiation to be a tug of war. In truth, it’s possible for both sides to walk away satisfied.

The same body of research finds that the fixed-pie bias stems from both information availability errors and information processing errors. Simply put, we attribute too little attention to too little information. Sales professionals should ask more questions, then listen to the answers. As Noesner remarked, “Listening is the cheapest concession we can ever make.”

With questions, a sales professional can investigate the customer’s demands. These demands are an expression of an underlying need. By drilling deeper, the seller can uncover these needs. This approach is important because needs (“I need more flexibility in the payment schedule.”) are much easier to discuss and resolve than demands (“I can’t pay that much.”). By converting a demand to a need, negotiators protect the value of the sale. Skillful negotiation is closing without conceding.

Leveraging Information to Increase Deal Size

Information exchange is the foundation of trust, and trust is the foundation of future business. This truth is reflected in research from Clemson University. More than 300 participants engaged in negotiation role play. Experimenters learned that “buyers’ monetary cost increased as information increased, suggesting that sellers might profit from information exchange and, indirectly, from trust.” The study revealed another nuance: successful negotiating not only requires sharing information, it requires sharing quality information. This finding makes intuitive sense. Obvious or irrelevant information invalidates the sales professional’s position. Good information leads to insights, which lead to closing.

Reaching the negotiation table is harder than it has ever been. This means sales professionals need to make it count when they get there. However, successful negotiations are an exercise in cooperation, not competition. Noesner reminds people of what he calls “the paradox of power.” He continues, “the harder you push, the more likely you are to be met with resistance.”

To learn more about how you can empower your team to be better negotiators, attend session #SU52EXD at the ATD 2018 International Conference & Expo. Be sure to join us Sunday, May 6th at 3:00 pm in Room 24B.

About the Author
Ben Taylor is the content marketing manager at Richardson, a global sales training and performance improvement company focused on helping you drive revenue and grow long-term customer relationships. Our market-proven sales and coaching methodology combined with our active learning approach ensures that your sales teams learn, master, and apply new behaviors when and where they matter most — in front of the buyer.

Taylor has an MBA in finance from LaSalle University and more than a decade of business and writing experience. He has covered content for brands including Nasdaq, Barclaycard, and Business Insider.
Be the first to comment
Sign In to Post a Comment
Sorry! Something went wrong on our end. Please try again later.