Lowballing Psychology for Effective Negotiation (Case Study)

lowball offer written on open laptop

The lowball technique can be a fantastic way to get a bargain.

But it’s a high-risk crapshoot because it annoys the sellers. 

What to do then?

This article will walk you through the steps of a psychology-backed, field-proven lowball technique which works (almost) every time.

lowball offer written on open laptop

The Lowball Technique: A Walkthrough

This HP Envy on Ebay Classifieds was exactly what I wanted.

Except, you guessed it, for the price.

HP Envy 23 lowball technique : an example

I will show you now how I used the lowball technique to get it at half the price.

#1: Don’t make enemies 

Now what most people would do, and would do wrong, is to lowball right away.
Or, only marginally better, low ball after a neutral question that does nothing useful for you (ie. “is it still available?“).

Let’s first understand why it’s not the ideal way.

Why you don’t lowball 

There’s much truth in the saying that people don’t buy products but they buy people (whom they like).

But most are much less careful with the other side of the equation: people also sell (to) people (whom they like).

And often we’d rather lose money than sell to people we don’t like.

This notion has been scientifically proven in many experiments -most famously the “Ultimatum Game”– and by neuro-science MRI scans showing that lowball offers stimulate the part of the brain associated with disgust.

In a nutshell: low ball offers disgust people and make them switch to “vendetta” mode.

No wonder so many low-ball offers end up getting spurned, ignored or, it happened too, provoking violent reactions.

The great book Never Split the Difference is also based on the principle of not making enemies.

What do you do then?

Enter the psychology of persuasion.

#2. Ask a Trojan Question

trojan horse photo
Photo by Tama Leaver

To set up the lowball offer ask what I’ve baptized the “Trojan Question”.

A Trojan Question is a question where you already know the answer will highlight defects and problems. 

If you’re buying a house that needs renovation, for example, you don’t attack saying “but it needs renovation”.

You ask if they think it needs renovation.
Defenses go down and when they say yes, you ask how much it could be. And now you’re safely hinting at “ask price minus renovation costs”.

Similarly, I ask if the computer has SSD memory, which I already know it hasn’t:

Hello Philipp, 
Is the drive SSD or SDRAM?
Many thanks,
Lucio 

And as expected he replies it’s not.

Trojan question : the expected reply

NOW, because it doesn’t have the feature you were looking for and you are already engaged in a conversation -as opposed to starting with a lowball offer-, you won’t raise nearly as much hostility.

And on your next message, you build rapport prepare the ground for a second attack with a Trojan Compliment.

#3. Make a Trojan Compliment

A Trojan Compliment is a compliment hiding another critic.

Trojan horse compliment
This is the best way to safely keep criticizing the product by staying friendly.

If you’re buying a house, you could say

You: “oh ok, I see, renovations are expensive. Well, I like the location though. And it looks like the traffic noise is barely audible (said it on a Sunday, with traffic being 3x higher during weekdays ;)”

With a Trojan Compliment, you fully focus the seller’s mind on the negatives of the product, making it much more likely he’ll seriously consider your low ball offer.

In our example it went like this:

OK I understand
.But it’s still a good machine, and it looks like it doesn’t have any scratches. 

I would offer 280 and can meet you this week and pay.
What do you think?
Apologies for my terrible German and best regards,
Lucio

The passages explained:

  • “doesn’t have any scratches”:  Trojan Compliment as I could see a small one
  • “ready to move on ASAP”: benefit for him to sell it quickly (maybe he already got a new one?)
  • “what do you think”: makes the seller feel respected and in charge. You just made an offer but he is the final decision maker
  • “280” : even numbers are perceived as bigger and it’s slightly more than half, with half being a major psychological threshold
  • Sorry for my terrible German” : I’m stretching myself to communicate in your language. Mistakes can be endearing.  

#4 Leverage Question & Compliment

He tells me:

  • it has a small scratch -exactly what I was angling for- and
  • he accepts my offer if I got pick it up

Bingo. I use both information for another price reduction, which now seems very fair:

Hmmm it’s a bit far. But OK. 
Is it OK for you if we make 250 because I’ll need to take time off from work? I can be there this week, how’s your schedule?.

And he accepts.

NOTE:

Lowball Technique: the result Auction best procedures : the result

50% discount on an already fairly priced item + Mouse & Bluetooth dongle gift.

With the next move, sold old laptop above its value and for 76 Euros moved from an old 2010 clunker running Vista to a sleek All In One touch screen quad core 64 bit Windows 10 with remote.

All thanks to great lowball technique -and auction sales techniques-.

Edit:
And that was also, BTW, the computer with which I started this website. A website that two years later became a viable business and my main source of income.
Fond memories spring to mind :).

More Negotiation Techniques

Since then I have written a lot on the psychology of negotiation.
Check out these articles:

20 Manipulative Negotiation Tactics

SUMMARY

Results will differ from case to case, but you learned the main issues with the lowball technique and you certainly will improve your hit ratio by doing the following:

  1. On your 1st message ask a Trojan Question -a question with negative answer-
  2. Make a Trojan Compliment -compliment hiding a critique-, make your low ball offer and be kind
  3. Use his reply for further discounts / concessions and tell you’re ready to move

And use with ethics 😉

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