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What is behavioral economics? Why does it matter to you?

Podcast Episodes

What is behavioral economics? Why does it matter to you?

146. Using Anchoring in Negotiations, an Interview with Kwame Christian

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Today I am so excited to have Kwame Christian back on the show. Kwame was first on the show back in July of 2020 in episode 107. There aren’t a lot of repeat guests on the show because there are so many people out there I want to talk to and share with you; I am constantly trying to find new voices to bring on.
That being said, I had to have Kwame back for a few reasons.
For one thing, we have become friends over this past year and I know how much fun he is to talk to and such a wealth of information. When he came on the show we talked about having difficult conversations around race and inequality, which was influenced by the Black Lives Matter movement, the death of George Floyd, and other horrible events that started coming to a greater light in spring 2020. While Kwame quickly became a prominent voice in that space, it isn’t his main focus or real area of genius. While prepping to have Kwame guest lecture for a class I recently taught on internal communication and change management at Texas A&M, I saw that he had a guide about using anchoring as a tool in negotiation and it was a clear opportunity to have him back to talk about his truest expertise – negotiation techniques.

  • [00:06] In today’s episode I’m so excited to have Kwame Christian back on the show, a rare repeat guest, to talk about using anchoring in negotiations.
  • [03:02] Kwame is the director of the American Negotiation Institute and host of the #1 negotiation podcast in the world, Negotiate Anything, which has over 2 million downloads in more than 180 countries.
  • [05:27] At the American Negotiation Institute they do negotiation trainings and business consulting. 
  • [08:30] Kwame has a background in psychology. 
  • [08:47] Kwame’s philosophy for life is that the best things in life are on the other side of difficult conversations. His goal is to make these difficult conversations easier so you can live the best version of your life. 
  • [09:04] Negotiation is a life philosophy that we filter every life conversation through. He thinks of every conversation in terms of a negotiation. 
  • [11:39] There is a bias where we think that negotiation has to be adversarial. It doesn’t need to be that way. 
  • [12:00] Negotiation is any time you are in a conversation and somebody in the conversation wants something. The people that you negotiate with the most are the people closest to you. 
  • [14:24] In every situation somebody wants something even if it is just to be heard or understood. 
  • [15:14] If you think of a conversation as a negotiation then you are going to be more explicit with your desires and invite the other person to share what it is they want out of the interaction. 
  • [17:31] Any interaction (even when money doesn’t exchange hands), you are still trying to sell someone an idea that you need them to buy in on. 
  • [18:06] Anchoring is the most powerful negotiation technique. You should always try to use it in some capacity. 
“Anchoring is the most powerful negotiation technique.” @kwamenegotiates Click To Tweet
  • [18:31] Anchoring with the most aggressive request that you can reasonably justify. 
  • [21:02] If you have as much information or more information then you make the first offer because then you are in a position to create a competent anchor. If you have less information then you let them make the first offer and then you counter them. 
  • [22:56] There are some glaring mistakes you can make if you anchor without having enough information. 
  • [25:08] We need to be able to distinguish between rejection and resistance. 
  • [27:58] The things you say have an impact. You want to calibrate that impact for maximum impact. 
  • [29:57] Negotiation Genius talks about how to play defense when someone else anchors you. 
  • [31:20] Anchoring plays a huge role in our psychology and if we don’t recognize it we are going to do things that have a subtle impact on the subconscious of the person on the other side. 
  • [33:37] Negotiating the agenda is one of the most important negotiations that does not occur. 
  • [36:23] You have to be more mindful about what you are trying to accomplish. 
  • [37:42] It is helpful to know what the person you are negotiating with cares about most. 
  • [40:01] We have to ask questions and learn as much as we can so that we can try to solve the right problems. 
“If you have as much or more information then you make the first offer because then you are in a position to create a competent anchor. If you have less information then let them make the first offer and then you counter.”… Click To Tweet
  • [40:44] Assertiveness is taken differently depending on who you are. The way you frame something may be different depending on your gender. 
  • [42:37] We have to play in the world we live in, but we can be doing things on the side to try and change them in the future. 
  • [43:19] Melina shares her closing thoughts. 
  • [45:05] Melina’s first book, What Your Customer Wants and Can’t Tell You is officially on presale and available on AmazonBookshop, Barnes & Noble, Book Depository, and Booktopia. Buy today and be one of the first to receive a copy when it officially launches May 11, 2021.

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