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.

Three Keys to a Killer First Offer

Most of us own something we don’t really want. Maybe we’re riding the train and no longer need a car. Maybe we’re moving and can’t haul the couch. Maybe our fancy bike eliminated the need for a Schwinn.

Opportunities to sell are everywhere. But how to pick a price? I’ve previously suggested setting your first offer as a function of your target. But if you’re like most people, you’re still not sure EXACTLY what figure to propose.

Selecting the number for your first offer is tough. But it’s negotiable! In this post, I’ll offer three strategies that can help you home in on a killer first offer.

For the purpose of this post, imagine that you’re moving into a furnished apartment across the country, thus eliminating the need for your beloved couch “Bessie.” Imagine, further, that your cat hasn’t destroyed your beloved couch, as he has mine. Finally, imagine that $750 is the aggressive yet attainable figure that you have chosen as your target.

That’s all fine and well. But now that you’re standing in front of a prospective buyer, nervously extolling Bessie’s virtues, you’re still not sure exactly what number to offer. Here are three strategies for selecting a figure:

  • Be aggressive, not outrageous: If you’re confident that $750 is aggressive yet reasonable, a first offer in the $775-$825 range would probably work well. A first offer in the $1275-$1325 range would not, as research clearly shows that first offers far outside the realm of reason don’t lead to good deals. They lead the other party to bolt before you can say “Bessie.” So offer something somewhat above your target, but don’t offer something outrageous.
  • Be precise, not round: If you’re considering a first offer of $800, consider a first offer of $807 instead. Why? Other interesting research shows that precise first offers are more persuasive than round first offers because they suggest that you’ve done your homework. $800 sounds like a dream; $807 sounds like a carefully researched and clearly justified calculation. But don’t overdo it. Don’t offer $807.34, as the same authors have suggested that you then sound like a slimy salesperson. So try to be moderately precise, then extoll Bessie’s virtues when your counterpart probes the underlying calculations.
  • Be exact, not wishy-washy: If you’re considering a first offer of $807, say “$807.” Don’t say “about $807,” and don’t say “between $787 and $807.” Your goal is to give your first offer the aura of legitimacy and finality. If you say “about,” the other party hears an opportunity to negotiate. If you say a range, the other party hears the part of the range they like—$787—and your hopes of $807 are gone forever. So do your homework, understand through and through why your beloved Bessie might be worth your first offer (whatever it is). Then advance that offer with confidence, as if it’s the only obvious number that any reasonable purveyor of used couches named Bessie would offer.

These three tips still won’t give you an EXACT answer about what number to offer. In matters of human behavior, exact answers are few and far between. But hopefully they do offer a useful yardstick for calibrating your figure and advancing a first offer with confidence.

What do you think of these strategies?