Anchoring is a well-documented cognitive bias that describes the human tendency to rely too heavily on the first piece of information offered (the “anchor”) when making decisions.David Jacoby, Sales Readiness Group
Many tenants are appalled that, amidst the pandemic, their landlords are asking for rent increase when their leases are up for renewal this year. To be able to negotiate powerfully as a tenant, we first need to see the rent increase for what it is – an anchor. Or in this case, an extreme anchor, which means a ridiculous offer, as Chris Voss puts it in his book Never Split The Difference.
An extreme anchor is powerful, which is why tenants are left with the experience of being betrayed and feel appalled, angry and emotional. Why would a landlord risk antagonising the tenant by giving a ridiculous offer? Perhaps it’s to bring the tenant to that state of shock and anger where the tenant doesn’t quite notice that she is already at effect of the anchor. The tenant may have intended originally to ask for a rent reduction due to the pandemic. Now she is just content with rent staying the same at pre-COVID-19 level and avoid a rent increment.
You may read David Jacoby’s 5 Counter Negotiation Tactics When Buyer Makes The First Offer to practice how to deflect the anchor.