Reciprocal concessions: Tactics of negotiation

Reciprocal concessions: Tactics of negotiation
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First Published: Mon, Jun 09 2008. 08 38 AM IST
Updated: Thu, Jun 12 2008. 01 54 PM IST
In an earlier column, we had discussed the power of “reciprocity” as a managerial tool of influence. Whenever anyone does something we perceive as a favour or gift, we feel an obligation to respond. Even though we didn’t ask for the gift and even if we didn’t like the gift, it still creates a psychological obligation to respond in kind to the person giving the gift. The gift givers, in essence, hold all the power in their hands to create this obligation within us.
An interesting variation on the principle is the concept of “reciprocal concessions”. Research has found that when someone makes a concession for us by reducing the size of their original request, we still see it as a favour and feel the obligation to respond. The most common application of this is in the area of negotiations. When someone we are negotiating with starts at a certain position and then retreats by agreeing to a lower “compromise” figure, we feel a greater obligation to change our position to try and agree to their revised offer.
In sales, skilled salespeople will often actively negotiate until they feel they have reached the absolute limit beyond which the potential customer is unlikely to go. That’s when they engage this principle to its greatest effect and squeeze some additional money out of the customer. “Well, I really want to put you in this car,” a car salesman may say, “but I realize that you won’t go any higher and my manager won’t let me go any lower.” After a pause, they may come back with, “I’ll tell you what. I can come down another Rs5,000. I’ll even take it out of my commission, if necessary. How about this, you agree to come up by just Rs2,000 so we can make a deal and get this over with?”
The reciprocal concessions effect suggests that potential customers are more likely to agree to this (going above their initial “maximum price”) because of the felt obligation to respond to the salesperson’s concession of lowering the price and even possibly reducing his or her commission.
This technique is also an integral component of the “door in the face” technique. In one study, several random subjects were approached by researchers and asked if they would be willing to serve as unpaid chaperones for a group of juvenile delinquents on a day trip to the local zoo. Only 17% of the people approached agreed to the request.
Then, the researchers slightly modified the request. Before making the earlier request, they first asked them for a commitment that required even more effort. Again, random people were approached and asked whether they were willing to serve as unpaid counsellors for two hours a week for a minimum of two years at the local juvenile detention centre. People invariably refused. Once the request was refused, the earlier request was put forward verbatim (serving as an unpaid chaperone for a day trip). Amazingly, the percentage of people now agreeing to the request shot up from 17% to 50%. Simply by back-pedalling and reducing the enormity of the request, researchers were able to significantly increase people’s likelihood of agreeing to a certain request.
From a managerial standpoint, this research suggests that you should always have a smaller “back-up” request any time you walk into a situation where you are going to be asking someone for something. Even if your original request is rejected, the likelihood of your back-up request being accepted is higher. In fact, any rejection of a request is actually an opportunity to get something that may not otherwise be that easy to obtain. The moment someone rejects a request, they are vulnerable to the follow-up request.
The key to effectively using door-in-the-face is to ensure that the second request is actually seen as a concession or favour being done to the person from whom the request is being made. If your initial request is so outrageous that it is seen as a joke, the reduced follow-up request will not be taken seriously. Also, the second request must be perceived as being significantly smaller than the initial request. Making it only trivially smaller will result in an easy rejection.
Finally, it works most effectively when the two requests are seen as related. If the second request is completely unrelated to the first, it isn’t seen as a “concession” from the first request and no obligation to respond in kind is generated. Approach any negotiation with clear back-up points to which you are willing to retreat. To avoid being manipulated into agreeing to a request by someone using the technique against you, it is important to understand how and why this effect works (now you know!) and then reframe the request in your mind. Some researchers have suggested that the biggest reason people agree to the second request is that rejecting the first request causes feelings of guilt, which are alleviated by agreeing to the second request.
So, if rejecting a request makes you feel guilty, ask yourself if the person making the follow-up request is genuinely trying to make accommodations or whether they are knowingly using the effect to get you to do something you shouldn’t be doing.
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Praveen Aggarwal is an associate professor of marketing at the Labovitz School of Business & Economics at the University of Minnesota Duluth and Rajiv Vaidyanathan is a professor of marketing and director of MBA programmes at the University of Minnesota Duluth.
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First Published: Mon, Jun 09 2008. 08 38 AM IST