Anchoring in Negotiation: Your First Move Matters Most

Why the First Move in Negotiation Matters More Than You Think

You’ve probably heard the saying, “The person that makes the first move, loses.” Well, we disagree wholeheartedly.

In fact, research shows that making the first proposal in a negotiation usually gives you the upper hand—because it allows you to set the anchor.

Anchoring in negotiation strategy is all about creating a reference point that the entire conversation revolves around. And if you’re the one who sets that anchor, you’re already steering the negotiation in your favor. Let’s dive into what anchoring really is and how you can use it to your advantage.

What Is the Anchoring Strategy and Why Does It Work?

So, what is anchoring in negotiation? At its core, anchoring is a cognitive bias. It’s the tendency we all have to rely heavily on the first piece of information we’re given when making decisions. Whether it’s the price tag on a car or the starting salary in a job offer, that initial number sets the stage for all further discussions.

Think about the last time you walked into a car dealership. Who puts the first number on the table? The dealer, right? And what does the rest of the conversation usually revolve around? That’s right—the sticker price. This is a classic example of anchoring in action. The dealer’s price becomes the reference point for the negotiation, and everything else is compared to it. By making the first move, the dealer anchors the negotiation, often steering it in their favor.

Flip the Script: How to Anchor Like a Pro

If you want to flip the script in your negotiations, it’s time to learn how to anchor effectively. The key is preparation. Before you even start talking numbers, you need to understand the other party’s expectations, preferences, and priorities. This gives you the insight you need to make a strong first offer that anchors the discussion in your favor.

Let’s go back to that car dealership example. Imagine you’re the one putting down the first number, not the dealer. You’ve done your homework, you know the market value, and you set your anchor slightly below what you’re actually willing to pay. Now, the conversation revolves around your number—not theirs. You’ve set the stage for a negotiation where you have the upper hand.

Research consistently shows that setting the anchor can dramatically influence the outcome of the negotiation. So trust your preparation, trust your instincts, and confidently plant that anchor. The conversation will now revolve around your position, giving you a distinct advantage.

When to Hold Back: Recognizing the Right Time to Anchor

Of course, anchoring isn’t foolproof. There are times when it might be smarter to let the other party go first, especially if you’re unsure about the market value or the other party’s expectations. If you don’t have a solid grasp of the numbers, you might anchor too low and leave money on the table.

If you’re planning your negotiation strategy with limited information, making the first move could backfire. In these cases, it’s sometimes better to let the other side anchor first. This gives you the chance to gather more information before you make your move. Once you know where they stand, you can strategize your counteroffer more effectively.

Remember, anchoring is powerful, but only when used correctly. If you’re confident in your market research and understand the dynamics at play, making the first move can be a game-changer. But if you’re unsure, don’t be afraid to hold back and let the other side reveal their hand first.

Stay Sharp: Tips for Recognizing and Overcoming Anchoring Bias

Anchoring can be a double-edged sword. While it’s a great strategy to use, it’s also a tactic that others can use against you. That’s why it’s crucial to stay sharp and recognize when anchoring is being used to influence your decisions.

The first step to overcoming anchoring bias is to consider the context. Ask yourself: Is the information I’m being presented with reliable? Does it make sense given the current situation? By questioning the anchor, you can prevent yourself from being unduly influenced by it.

Another way to counteract anchoring is to have a clear understanding of your own objectives and priorities. When you know what you want out of the negotiation, it’s easier to push back against an anchor that doesn’t align with your goals. And if you suspect the other party is using anchoring to steer the negotiation, don’t hesitate to challenge it with a well-researched counteroffer.

Mastering Anchoring in Negotiation Can Tilt the Scales in Your Favor

In the art of negotiation, anchoring is one of the most powerful tools you can wield. But like all tools, it must be used wisely. Knowing when to set the anchor—and when to let the other side go first—can make all the difference in securing the best possible outcome.

By mastering the art of anchoring, staying alert to potential biases, and being ready to adapt your strategy, you’ll be well-equipped to navigate even the toughest negotiations. So the next time you’re in a high-stakes discussion, remember: the first move can count for a lot—if you make it wisely.