Person A: “There is a 25% chance we won’t meet the volume expectations this year”.
Person B: “There is a 75% chance we will meet the volume expectations this year”.
The way we frame a data can have a huge effect on our counterpart’s response to the information we are using to support our offers in a negotiation process.
When negotiating, we need to stop and think about how to frame our data in the best possible light. In other words, minimizing risk and maximizing gain.
As a rule, people don’t like to take risks. Indeed, they dislike taking risks so much that even the slightest whiff of negativity is enough to have them walk away from a solid agreement.
That’s what the famed Israeli team of Daniel Kahneman and Amos Tversky demonstrate when they asked study participants to imagine that 600 people were affected by a deadly disease. Treatment was possible but risky. Study participants varied wildly in their willingness to take the risk depending on how the outcome was framed.
For example, when told that “there is a 33% chance of saving all 600 people, and a 66% possibility of saving no one,” most of the study participants (72%) thought this was a good bet.
But when told that “there is a 33% chance that no one will die, but a 66% probability that all of the 600 will die,” then only 22% were willing to take that chance.
The beauty of the study is that the choices presented to the participants were actually identical – only the framing was different. But what a difference in response!
This goes to illustrate just how heavily our decisions are influenced by our subjective emotional reaction to the way the data is presented.
We need to remember this when we are trying to persuade our counterpart to make a concession or when you want him or her to share the risk.
You could say: “There’s a 25% chance we won’t need the volumes we expected.” Or you could say: “There is a 75% chance we will meet our volume targets.” (Obviously the latter frames the risk in a more positive light.)
You could say: “We don’t expect to lose anything over the long term with the new Just-in-Time delivery system.” Or you could say: “Over the next ten years we could potentially save up to two million dollars, if we move to a Just-in-Time delivery system.” (The latter is much more likely to sell the new system internally.)
Lying and omitting information is dangerous, so it doesn’t mean that risks shouldn’t be mentioned. But changing the way you frame the risks will often make it a lot easier to get agreement.
Remember to Negotiate Smart™ (and “like” this post on LinkedIn!)