How we change what others think, feel, believe and do

Lowball

Disciplines > Negotiation > Negotiation tactics > Lowball

Description | Example | Discussion | See also

Description

This is a method for buyers, where you start your bidding particularly low.

When negotiating a price on something, for example, it can help to know what constitutes a reasonable range of prices, so do your research beforehand to find the seller's zone of acceptability, then start at, or even below the bottom of their range. This may be justified with an argument about why you are offering so little.

Be careful about starting out asking the other person what their price is, as this will anchor the discussion (and their expectations) at a higher price.

Example

My son wants to stay out late, coming back at 3am. I start by saying that I want him back at 10pm. We settle on midnight.

Sorry, sir, there's no call for these thing nowadays. It's damaged, too. The best I can offer is...

A car dealer phones around personal adverts of individual selling cars, making very low offers. If they are not immediately rejected, they follow up to see how low a price they can get.

Discussion

Where you start sets expectations for the other person. When you start low, you can always go up. When you start high, you can never go down.

Starting low creates an anchor for the other person, whereby they may well assume that this is in a reasonable range. If their counter-bid is lower than you expected, then you will end up with a good price. Even if they are below what you expected, do not settle immediately -- at best split the difference and you may be able to nudge them even higher.

A low start may well take longer to reach resolution, giving you more opportunity to find out more about the other person and to build effective tension.

If the other person counters with a highball (or starts to walk away), this may be a signal that they know what you are doing. Hold your nerve! If you collapse your position, they may well take advantage and seek to pull you even further down.

Be careful about starting too low, as this may cause a betrayal response whereby they leave without further ado, ignoring anything you may say. Extreme positions outside of a range that may be considered fair can also be damaging to relationships (which may be important).

The difference between your start position and your end position is a signal to the other person about how much you have conceded to them. A significant difference will make them believe they have got a bargain (a view you can encourage with sighs and supporting words).

See also

Anchoring and Adjustment Heuristic, Highball