The Shocking Power of Counter Offers

In a previous post, we discussed why you should make the first offer in a negotiation. But what should you do if they get in first and make the initial offer?

The advice here is short and simple: always counter their initial offer before striking a deal.

The power of countering

This might come as shock to you, but countering their initial offer is not only good for you; it’s also good for your counterpart.

It’s good for you because it gives you the opportunity to negotiate a higher-value outcome, rather than simply accepting the deal on the table.

But what’s interesting, and perhaps surprising, is that countering is also good for your counterpart.

How can that be?

While countering could decrease the substantive value of the deal your counterpart might receive – as measured in monetary terms, timing, conditions and so on – research shows that your counterpart will actually be happier with the deal (Galinsky et al., 2002).

Parties in a negotiation typically have interests beyond the substantive outcome, including feeling that they’ve achieved a fair good outcome and that they weren’t ‘ripped off’.

If you accept your counterpart’s first offer, they can often feel they’ve been taken advantage of – even if they haven’t been. “She accepted so quickly; that clearly means I could’ve got a better deal!”

Countering an initial offer reassures the other party that their first offer was good for them, as you’re not prepared to accept it.

Accepting their offer: Power of the pause

Okay, so countering makes sense in theory, but what if your counterpart’s initial offer is so generous that you want to accept it (and you’re too scared to counter it)?

The answer is deceptively simple: Pause before accepting their offer.

Pausing shows that you’re thinking deeply about their offer, weighing it up, deciding whether it’s reasonable. This will reassure your counterpart that they haven’t offered you too much, as you’re ‘unsure’ about whether to accept.

In fact, pausing also has another advantage. Pausing before accepting their offer can create an uncomfortable silence – much a like a vacuum – that can prompt them to interject to adjust the offer. For example.

  • Counterpart: I’ll give you $8,000 for the car.
  • You: [pause for 5-7 seconds]
  • Counterpart: Ok, I can go up to $8,500.

If they interject, that’s great! You just got yourself a better deal. If not, then you can either accept or counter. Your silence was merely a moment for you to ponder the offer; no harm done.

To further improve your outcomes in your next negotiation, use our Harvard-based Negotiation Planner: Click here to access this free resource.

To learn more about interest based negotiation, we recommend the book “Getting to Yes by Roger Fisher & William Ury.”

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