Reciprocity is a lovely word to say; it sort of slides off the tongue and leaves a sweet aftertaste. While not often used in everyday conversations, it is hard-wired into our DNA and is a guiding principle for daily interactions. The simplest definition of reciprocity is that it’s a mutual exchange of privileges. In daily life it’s the return of favours.
A neighbour drops in a bag of lemons from her tree. I searched my garden and returned a bunch of daffodils. I had not asked for the lemons which are bountiful on her tree but felt an instant obligation to return the favour.
In negotiations, we can use reciprocity to ensure that a mutual gain negotiation is the objective of both parties. At the start of the negotiation, we can make an opening statement declaring our intention to create value for both parties in this negotiation and agree on a gain-sharing approach even before those gains are realised.
In negotiation, we need to remember Newton’s Third law of motion applies: ‘For every action, there is an equal and opposite reaction.’ In negotiating there is a subtle difference in that the reaction is the same as the original action. At the start of a negotiation if you are open, friendly and trusting, then your counterparty will most likely reciprocate - they will return the favour and be friendly, open and trusting. On the other hand, if you behave aggressively, accuse them of acting dishonestly, without honour and selfishly, you are guaranteed to receive a stinging rebuttal of your outrageous claims. One thing is certain that the negotiation will go downhill from there.
Early disclosure of key information by you will not only structure the other party’s expectation but will encourage them to disclose information known only to them. As I often say, information asymmetry is one of the key blockers to value creation in negotiations. Similarly signals of flexibility on your part will encourage them to indicate where they too, can be flexible. You can also accomplish this safely by practicing the phrase ‘Just suppose I could be flexible with volume, could you be flexible with price?’ Note that you’re not making a commitment, rather you’re buying a signal with a signal.
Making a realistic proposal that can be supported by reference to shared facts will encourage realistic counterproposals on their part. Ambit claims by you will lead to similar claims from them. The distance between the parties will be magnified, not reduced.
And of course, there’s the concept of paying a favour forward. Here the benefactor does not want a reward but asks that the person receiving the benefit assist someone else in the future. A woman unable to pay for car repairs was amazed when a complete stranger paid her $750 account with the simple request to ‘pay it forward.’
Reciprocity – the gift that keeps on giving. Not a new idea, but one worth keeping in mind. Who doesn’t like knowing a favour is out there in the ether!
Happy negotiating!
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