Negotiating like Disney

Flying home from a magical week at Disney World, I found my wallet empty and my pocket bursting with receipts. Looking into the mirror of the airplane lavatory, however, I nevertheless found myself smiling. How could Disney walk away with all my money and still make me feel like a winner? It struck me that Disney must’ve mastered some major negotiation principle.

Reflecting on what that principle might be, it seemed to me that Disney has discovered how to help people satisfy some of their most important needs, thereby making them more than happy to pay. Considering how to implement that principle when we too are selling something can make life decidedly more negotiable.

What the heck am I talking about? Anyone who has visited Disney World knows that the experience allows people to:

  1. Connect with their past. Many people who visit Disney World as adults also visited as kids. So when they experience the magic once again, they inevitably connect with an innocent and carefree past—a time when they weren’t troubled by $20 parking and $10 hot dogs. Disney allows people to connect with a lost past.
  2. Escape the present. A visit to Disney World entails a diversion into a parallel universe, a trip across the threshold of spacetime. Stepping away from our daily stressors, we encounter a world of smiling characters wishing us a magical day. Stepping away from politics, terrorism, and tweet storms, we encounter a world of garsh at worst and Zip-a-Dee-Doo-Dah at best. Disney allows people to escape a less-than-pleasant present.
  3. Connect with their future. Many people who visit Disney do so not to savor the pleasure of multi-hour lines on 87-degree February days. They visit to pass their own childhood experiences on to their children, which represent their own personal futures. They want their children to ponder the possibilities of a Small World without the dissonance of “America First,” to experience the elephants at Animal Kingdom before they disappear. Disney allows people to share some unadulterated magic with their kids, and thus shape some aspect of the future.

I make these points not because I’m particularly interested in high-fiving Disney’s marketing department. With an empty wallet and exploding wad of receipts, I’m not. I make these points because we can all benefit from them in our own negotiations, and thus potentially claw back a few lost dollars.

In many of our negotiations, we want to motivate others to pay money for something we own—an item like a used sports car or a service like our labor. And we often go about the sale by overwhelming them with persuasive and rhetorical force. “It’s in amazing shape!” “My unmatched analytical skills…” But what if we instead portrayed our offerings as a means of satisfying other people’s needs—be they the above needs or others? As just one example of the above needs, what if we portrayed our sports car as a means of connecting with lost youth, an escape from present reality, or an opportunity to share the joy of driving with our children? Just a simple example of one offering serving three potential needs, but it illustrates how a simple shift in focus—from our own amazing offerings toward others’ unfulfilled needs—might produce a little negotiation magic.

False anchors: Don’t get sunk this holiday season

This holiday season, retailers seem particularly eager to make their lives more negotiable by selling you on their wares. So now is probably an appropriate time to alert you to one of the oldest negotiation tactics in the book and—in so doing—help to make your own life more negotiable.

Several of my early posts discussed the power of the first offer: in brief, they described negotiation research revealing that the party who makes the initial offer in a negotiation often performs better, particularly when that offer reflects a realistic but aggressive goal. So if you’re selling a used car and consider 12K both possible and hopeful, then making the first offer and making it 12 or even 13 is probably a worthwhile idea. And the underlying reason is anchoring: whoever issues a number anchors both parties’ attention on that number rather than letting it stray elsewhere.

This tactic is known all-too-well to retailers, who would like nothing more than to interest you in their products and then anchor you on their desired price shortly thereafter. But most retailers are far too sophisticated to think they can just quote you an exceptionally high price. They know that your many possible alternatives are just a few clicks away. Instead, they realize they have to be much more subtle in their anchoring. Any guess on their preferred tactic for doing so?

Well, it would take about 20 posts to list all of their tactics, but a particularly common and pernicious one is this: they mention a very high number and label it something like the “retail price” or even the “competitor’s price.” Whether it is, is not the issue. The issue is the fact that you’re now anchored on a very high number. And you’re still anchored on that number when, moments later, they state a much lower price and label in their amazing sales price. “This 65” HD 2160p curved TV normally retails for $3000. But today only, you can nab it for an amazing sales price of $1800!”

Now, all of us, seeing the sales price, are tempted to think “Wow! Fantastic! What a deal!” In fact, the sales price is all-too-often nothing more than the price the retailer really wants you to pay. But by anchoring you on the exceptionally high number and immediately drawing a contrast to their much lower (albeit still aspirational) number, they make you and I and everyone else think we’re getting a fantastic deal.

Now, I don’t mean to imply that all retailers are pernicious or unscrupulous, nor that all of us always fall for this tactic. But I do think that most of us, reflecting on this tactic, would admit to ourselves that we’ve fallen for it more often than we realized at the time or would like to tell the rest of the world now.

So what can you do to combat this tactic? Your best hope is to spend a bit more time perusing at least a few more websites in search of comparative data. Is this really such an amazing deal or is it just the going rate? In addition to competitors’ websites, I’d also include the manufacturer’s website, Amazon, and a few independent websites like Consumer Reports as applicable. If that sounds like a bunch of holiday time spent surfing, well, it is. But at least for a consequential and costly purchase, I’d argue that avoiding the allure of the anchor is well worth the time.

Have you ever fallen for this tactic and then realized after the fact?