Sales Negotiation 4 — Questions and Answers
Question 1: What psychological principle explains why people are more motivated to avoid losses than to acquire equivalent gains?
- Reciprocity bias
- Loss aversion (Correct answer)
- Social proof
- Anchoring effect
Correct answer: Loss aversion
Loss aversion (Kahneman & Tversky) shows losses feel roughly twice as painful as equivalent gains feel good.
Question 2: A prospect demands a 20% discount but gives no justification. What is the most effective counter?
- Offer 10% immediately as a compromise
- Ask 'Help me understand what's driving that number' before responding (Correct answer)
- Refuse and restate your full price
- Offer a payment plan instead
Correct answer: Ask 'Help me understand what's driving that number' before responding
Asking for justification reveals whether the discount demand is based on a real constraint or is simply an opening position.
Question 3: Which of the following is an example of using 'social proof' as a negotiation tool?
- Sharing a list of competitors' prices
- Mentioning that 50 similar companies use your product at full price (Correct answer)
- Offering a trial period
- Agreeing to the prospect's terms to show goodwill
Correct answer: Mentioning that 50 similar companies use your product at full price
Social proof reduces perceived risk and justifies pricing by demonstrating that peers have already validated the value.
Question 4: In the 'good cop/bad cop' tactic, what is the best counter-strategy?
- Only negotiate with the 'good cop'
- Name the tactic and redirect to objective criteria (Correct answer)
- Walk out immediately
- Offer an even bigger concession to the 'bad cop'
Correct answer: Name the tactic and redirect to objective criteria
Naming the tactic ('It seems like you two are playing different roles here') neutralizes it without damaging the relationship.
Question 5: What is 'expanding the pie' in a negotiation context?
- Asking for more money after a deal is signed
- Creating additional value so both parties gain more than they expected (Correct answer)
- Adding unnecessary complexity to delay closing
- Splitting the difference on every issue
Correct answer: Creating additional value so both parties gain more than they expected
Expanding the pie involves identifying new tradeable issues that let both parties leave the table better off.
Question 6: A long-time customer threatens to leave unless you match a competitor's lower price. What is the best first step?
- Match the price immediately to retain the account
- Verify the competitor's offer is real and comparable (Correct answer)
- Offer a loyalty discount regardless
- Escalate to your manager immediately
Correct answer: Verify the competitor's offer is real and comparable
Verifying the competing offer ensures you're not ceding margin to a bluff or an incomparable product.
Question 7: Which body language signal most often indicates genuine interest from a negotiating counterpart?
- Arms crossed over the chest
- Leaning slightly forward and maintaining eye contact (Correct answer)
- Checking a phone during the meeting
- Looking away when you name your price
Correct answer: Leaning slightly forward and maintaining eye contact
Leaning forward and sustained eye contact are reliable non-verbal cues of engagement and openness.
Sales Negotiation 4
What psychological principle explains why people are more motivated to avoid losses than to acquire equivalent gains?