How to "Split The Difference" in negotiations.

Splitting the Difference in Negotiation: A Tactical Analysis

“Splitting the difference” is one of the most commonly used negotiation tactics, often emerging when two parties have reached a deadlock or when multiple positions have been exchanged. It is a technique that can create movement and encourage compromise, but it also carries several risks and pitfalls that negotiators should be aware of. While it may appear to be a fair and reasonable solution, it can sometimes be a shortcut that avoids deeper negotiation strategies that could yield better outcomes.

At The Negotiation Club, we frequently observe how negotiators use this tactic, particularly as a means to extract additional concessions when they have already reached an acceptable position. Understanding the true mechanics and implications of splitting the difference is essential for any skilled negotiator.

What is “Splitting the Difference”?

“Splitting the difference” is a tactic used in negotiation to bridge a gap between two opposing offers. It involves suggesting that both parties meet in the middle—dividing the remaining difference between their respective positions. This can be framed as:

• “You’re at £10,000, and I’m at £8,000. Let’s meet in the middle at £9,000.”
• “You’re offering 60-day payment terms, I want 30. How about we settle on 45?”
• “You’re asking for a 12-month contract, but I can only do 6 months. Let’s agree on 9 months.”

On the surface, splitting the difference seems reasonable because it appears fair, balanced, and reciprocal—triggering emotional responses tied to fairness and cooperation. This is why many people instinctively use it in negotiations. However, the reality is far more complex.

How is “Splitting the Difference” Used?

The tactic is typically introduced:

1. As a Label for Fairness: When a party wants to create the perception of fairness without fully justifying their position.
2. To Break Deadlock: When neither side is willing to concede fully, a middle-ground compromise can restart stalled discussions.
3. To Encourage Movement: Used when one party wants to push the other to shift their position with minimal effort.
4. To Appease the Other Side: Some negotiators introduce this as a concession to appear reasonable and cooperative.

However, just because “splitting the difference” is common does not mean it should always be accepted or used without thought.

The Pitfalls of “Splitting the Difference”

While this tactic can help close deals, it comes with several dangers:

1. It Does Not Justify Movements:

• One of the core principles at The Negotiation Club is “If you, then we…” – meaning every movement in a negotiation should be justified.
• “Splitting the difference” often skips this process, meaning concessions are made without strategic reasoning.

2. It Can Be a Tactic for Gaining Extra Movement:

• Our experience in negotiation practice sessions shows that people often use this when they are already happy to accept the offered position but still attempt to extract additional movement at no cost.
• If a buyer offers £850 per unit and the seller is happy with this but counters with “Let’s split the difference and make it £875,” they may gain a better deal while appearing fair.

3. It Doesn’t Always Mean 50/50

A common mistake is assuming that “splitting the difference” means an equal split. In reality, the split depends on:

• Who is framing the compromise.
• The power dynamics in the negotiation.
• The anchoring effect of prior offers.
• A skilled negotiator can manipulate what “splitting the difference” means to shift the final position in their favour.

4. It Can Lead to Unjustified Concessions

• Negotiators who quickly accept a split might give away more than necessary rather than holding firm for a better deal.
• If one party is more desperate than the other, they may feel pressured into accepting a midpoint that is still unfavourable.

5. It Ignores Other Potential Solutions

• Splitting the difference assumes that a middle ground is the best solution, but this overlooks other creative or value-adding possibilities that could serve both parties better.
• For example, instead of splitting a price difference, an agreement could be made on different payment terms or bundled services to balance the negotiation.

The Pitfalls of “Splitting the Difference”

While this tactic can help close deals, it comes with several dangers:

1. It Does Not Justify Movements

• One of the core principles at The Negotiation Club is “If you, then we…” – meaning every movement in a negotiation should be justified.
• “Splitting the difference” often skips this process, meaning concessions are made without strategic reasoning.

2. It Can Be a Tactic for Gaining Extra Movement

• Our experience in negotiation practice sessions shows that people often use this when they are already happy to accept the offered position but still attempt to extract additional movement at no cost.
• If a buyer offers £850 per unit and the seller is happy with this but counters with “Let’s split the difference and make it £875,” they may gain a better deal while appearing fair.

3. It Doesn’t Always Mean 50/50

• A common mistake is assuming that “splitting the difference” means an equal split. In reality, the split depends on:
  • Who is framing the compromise.
  • The power dynamics in the negotiation.
  • The anchoring effect of prior offers.
• A skilled negotiator can manipulate what “splitting the difference” means to shift the final position in their favour.

4. It Can Lead to Unjustified Concessions

• Negotiators who quickly accept a split might give away more than necessary rather than holding firm for a better deal.
• If one party is more desperate than the other, they may feel pressured into accepting a midpoint that is still unfavourable.

5. It Ignores Other Potential Solutions

• Splitting the difference assumes that a middle ground is the best solution, but this overlooks other creative or value-adding possibilities that could serve both parties better.
• For example, instead of splitting a price difference, an agreement could be made on different payment terms or bundled services to balance the negotiation.

How Should “Splitting the Difference” Be Used?

While “splitting the difference” has drawbacks, it can still be an effective tool when used correctly:

1. Use It as a Last Resort, Not a First Reaction

• Only suggest a split if other negotiation strategies have been explored and exhausted.
• Consider whether the proposed split is actually in your best interest or if another concession would be more valuable.

2. Anchor First Before Suggesting a Split

• If you are considering a split, ensure that your initial position anchors the discussion in your favour before proposing a compromise.
• Example: If you know the other party might push to split the difference, start with a more favourable anchor so that the midpoint still benefits you.

3. Frame the Split to Your Advantage

• Instead of allowing the other party to define the split, take control:
  • “I appreciate the idea of compromise. Since I’ve already moved significantly, let’s structure the split based on what we both value most.”
• This allows for discussion on how the split is calculated, rather than blindly accepting a 50/50 midpoint.

4. Use It to Signal Fairness, But Not as a Crutch

• Fairness is a psychological driver, so suggesting a split can make you appear cooperative and reasonable.
• However, do not rely on it as a primary strategy—always justify every movement.

When You Should NOT Use “Splitting the Difference”

1. When the Other Party is Using It to Extract More from You

• If someone proposes a split when you already suspect they are satisfied with the current offer, pause and re-evaluate.
• Ask: “Why do you think splitting the difference is the best solution?”
• If they struggle to justify it, they may just be pushing for extra movement

2. When It Conflicts with a More Strategic “If You, Then We” Approach

• If splitting the difference voids an opportunity to structure a better deal, avoid it.
• Instead, propose a trade-off:
  • “Rather than just splitting the number, let’s see what else we can do to add value for both sides.”

3. When the Split is Arbitrary and Unjustified

• If a split is suggested without clear reasoning, challenge it.
• For example, if someone says, “Let’s meet in the middle,” ask:
  • “Why is that midpoint the right number?”
  • “What makes this a fair resolution for both of us?”
• This forces the other party to rationalise their position rather than just assuming fairness.

Club Members Feedback Assessment:

During the club meeting a formal "Feedback Assessment Script" helps identify within the zoom transcript the feedback.  We can then use this with our AI to summarise the feedback helping to keep a record of the club members progress.

——

Script:

1. State your name.
2. State the name of the negotiator you were observing.
3. State the Technique being practiced and what you were specifically looking for.
4. Explain what you observed and your specific feedback.
5. Finally include a proposed "Level of Achievement" (Level 1, 2 or 3)

Each participant will be assessed on their ability to incorporate the designated tactic. Observers should use the following levels as a guideline: