digest
Short Summary
Main recommendation: Avoid high anchoring, meaning opening a negotiation with an aggressive first price before you understand the other side's situation, because it can make deals fall apart entirely. Instead, ask open-ended questions and start a discussion before throwing out numbers. The speaker illustrates this with a Hong Kong taxi story about a high-anchoring driver who was left with no fare.
Key Points
- In the example, the first three cab drivers quoted 480, 400, and 400 Hong Kong dollars for a ride the speaker estimated at roughly 60 to 80, and other people were seen walking away from them.
- The speaker, who had a 60-80 dollar estimate in mind, took a fourth cab that used the meter, which ended up costing him 60 dollars.
- The first high-anchoring driver was left driving off empty, which the speaker frames as the cost of high anchoring: lost deals you should have made.
- The speaker says you do lose money on deals you don't make, and that opening too high too early makes deals go away.
Details Worth Noting
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Concrete instructions: Before naming a number, ask open-ended questions such as "What happens if we don't make this deal?" and "What happens if you don't address these problems?" Start a discussion in advance rather than throwing out numbers too soon.
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The speaker's tip is framed as negotiating smarter, not harder, and he notes that the cab story is one example of a lesson he is still learning from.
Bottom Line
Going in too high too soon can cost you deals you would otherwise have closed, so open with questions and discussion before quoting any price.
