Unmotivated Buyer
A buyer who is uninterested in a deal may low ball as a means to end the conversation. This may also be an honest bid as an unmotivated buyer is only likely to purchase if a price is extremely attractive.Door in the Face
Door in the face is a well known negotiation and sales technique whereby you make an outrageously bad offer in hopes that this will make your second more reasonable offer more acceptable. For example, a buyer who offers $650,000 for a house listed at $1,000,000 who quickly comes back with a second and final offer for $900,000.Foot in the Door
Foot in the door is another well known negotiation tactic whereby you make a good offer on a small deal in hopes of establishing a relationship that leads to bigger deals. For example, a plumber who agrees to fix a leaky faucet for a low price who later suggests a complete overhaul of your plumbing.Anchoring
Anchoring is a common cognitive bias whereby people tend to use the number they hear first as a reference point such that it greatly influences them. For example, an employee goes into salary negotiations knowing they are worth at least $100,000 but the employer opens with $50,000. The employee may find the $50,000 offer difficult to ignore and may anchor against this number in their counteroffer such that they bid too low.Message Framing
Low ball offers can be used in message framing. For example, a university with outrageously high tuition that announces it will reduce tuition by $50 as a low ball. The university then announces a few days later that they decided to drop tuition by $500. This type of framing may greatly influence the response to the latter announcement.| Overview: Low Ball | ||
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Definition | A negotiation, influencing and sales technique that offers an initial low price or poor offer. | |
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