Why Do Negotiations Fail?

Why Do Negotiations Fail? Because People Don’t Even Know What They Want

Negotiations often fail not because of bad offers or rigid positions but because decision-makers themselves struggle to define what they truly want. This may seem counterintuitive, but research on decision-making reveals a critical flaw in human behaviour—people often believe they are making rational choices when, in reality, they are driven by emotions, perceptions, and psychological biases.

Many procurement professionals assume that buyers and stakeholders are focused solely on securing the lowest price. But what they actually seek is confidence—the assurance that they are making the right choice, minimising risk, and avoiding future regret.

Understanding this shift in perception is what separates effective negotiators from those who struggle to close deals. The best procurement professionals do not just present numbers; they shape the decision-making process itself. They guide attention, influence emotions, and create certainty—ensuring that agreement feels like the natural outcome.

The Contrast Principle: A Simple but Powerful Negotiation Strategy

One of the most effective psychological tools in negotiation is The Contrast Principle—a cognitive bias that influences how people perceive value and make decisions.

What is The Contrast Principle?
People don’t evaluate offers in isolation; they compare them to what was presented before. The brain seeks reference points, using relative differences to determine whether something is a good or bad deal.

How to Use the Contrast Principle in Negotiation

1. Anchor the Negotiation with a High Reference Point
   • Instead of presenting your ideal offer first, start with an intentionally less attractive option that still has value.
   • When you later present the offer you actually want them to accept, it will seem far more reasonable by comparison.
2. Create a Sense of Gain
   • By showing a more difficult, expensive, or restrictive option first, the final offer appears like a concession or a win for the other party.
   • This technique taps into loss aversion—people prefer avoiding losses more than achieving equivalent gains.
3. Adjust the Framing Based on the Counterparty’s Priorities
   • If price is the primary concern, introduce a high-cost option first before revealing a lower-cost alternative.
   • If contract terms are critical, start with a longer commitment with stricter terms before offering something more flexible.

Practical Application of the Contrast Principle

Example: Negotiating a Procurement Contract

A procurement professional negotiating a service contract might use the Contrast Principle as follows:

• Instead of immediately offering a three-year contract at $500,000, first introduce a five-year contract at $750,000 with strict renewal conditions.
• Then, present the three-year, $500,000 contract as a more flexible alternative.
• The second offer now feels more reasonable and advantageous—even though it was the intended target all along.

Why does this work? Because the brain doesn’t assess value objectively—it makes comparisons. By strategically anchoring expectations, you increase the likelihood of securing the desired outcome.

How BNA Negotiation Training Helps You Close More Deals

At Business Negotiation Academy, we equip professionals with the advanced negotiation strategies and psychological insights needed to win more deals, reduce risk, and influence decision-making effectively. Our training goes beyond traditional negotiation tactics by incorporating behavioural psychology, cognitive biases, and real-world application exercises that give you an immediate edge in high-stakes negotiations.

• Master strategic framing techniques like The Contrast Principle to guide counterpart decision-making.
• Develop influence-based negotiation skills to secure better terms without unnecessary concessions.
• Gain real-world negotiation experience through scenario-based training designed for procurement, sales, and leadership teams.

If you’re ready to transform how you negotiate and consistently close better deals, let’s talk. BNA Negotiation Academy helps professionals navigate complex negotiations with confidence and precision.

Final Takeaway: Influence Perception, Not Just Numbers

Negotiation success is not about pushing for the lowest price or the best terms—it is about influencing how choices are perceived.

• Understand that people want confidence, not just cost savings.
• Use psychological principles to structure choices strategically.
• Leverage The Contrast Principle to guide decision-making and increase agreement rates.

By applying these insights and working with Business Negotiation Academy, procurement professionals can move beyond transactional discussions and lead negotiations with greater influence, control, and success.