Skilled negotiators recognize this and use it to their advantage. They’ll anchor negotiations by making the first proposal. That anchor usually gets secured toward their most favorable position. Once it is, the other side must work hard to move the position from the anchor. It’s one of the reasons why I almost never ask the other side to “make me an offer” — I know that if I do, they will anchor the negotiation toward their most favorable position, leaving me with all the work to move it. Not only did the loaf of bread anchor the conversation, but it also framed how decisions were going to be made. The only comparison people had was the grocery store loaf of bread or
The “bigger and better” strategy worked. Sales went through the roof! But not for the new premium machine — sales soared for the original $300 model. And that’s how it rose to appliance stardom.
What was the problem? Why did “bigger and better” work?
The first problem was that no one was familiar with the bread-making process. They had no idea what it took to bake a loaf, so when the original machine offered freshly baked bread with ease and simplicity, the only thing consumers could compare it to was a $2 to $5 loaf of bread. Why would anyone spend $300 when they can get bread sliced and ready to eat for 1% of the cost? That was the customer’s reference point.
What was the problem? Why did “bigger and better” work?
freshly baked bread from a bread-making machine. In order to make a fairer comparison (or a more favorable comparison), there had to be something more comparable to the bread- making machine. What better
“Bigger and better” worked because Williams-Sonoma gave a different reference point. Now, consumers were looking at a $300 product versus a nearly $800 product. They forgot
something than another bread-making machine? When “bigger and better” was introduced, the grocery store loaf of bread was no longer in the frame of comparison. Skilled negotiators use framing to position proposals, opinions, and other information in a manner that creates a comparison or viewpoint that’s more favorable to their desired outcomes. We will react differently to situations based on how information is presented to us. If you understand the needs, motives, priorities, and constraints of the other party, you can frame things in a manner that’s more favorable to you.
all about the loaf of bread in the grocery store. The reference point and comparison shifted. When people saw that they could buy a very nice bread maker for a fraction of the cost of a “bigger and better” appliance, it was a no-brainer.
Why is this a lesson for a negotiator?
There are two concepts at play here: anchoring and framing.
The bread-making market was anchored by a $2 to $5 loaf of bread. That’s what consumers were used to, and that’s all they knew. They were anchored to this position. Once someone is anchored to a position, it’s hard to move them.
It seems the bread maker has given way to other “must have” appliances. Still, besides all the great freshly baked bread it gave us, it offered us some great lessons in negotiating as well.
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