Archive for March, 2010

Learn To Say “No” From A Russian

Friday, March 26th, 2010
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Sometimes The Best Way To Get To “Yes” Is To Say “No

Sometimes The Best Way To Get To “Yes” Is To Say “No

So What’s So Hard About Saying “No”?

As I work with sales negotiators and teams of negotiators I am constantly surprised by just how hard it is for them to say one simple word: “No” . I’m not sure if it’s the way that we’ve been raised or if we all have some built-in need to make other people happy, but we sure seem to like the word “yes” more than we like the word “no”. Normally, this is no big deal – I mean who wouldn’t want to hang out with somebody who is always agreeable. However, this inability to say “no” can spell disaster when you are in a negotiation…

There Are A Lot Of Ways To Say No

The classic Russian sales negotiator is always shown as sitting on the other side of the table saying “no” (or “Nyet” if you prefer) over and over again. Why can’t we be more like them?

When you are in a sales negotiation, it’s sorta like you are dancing with the other side of the table. You go back and forth as you both try to drive the best deal for your side. However, there is one important difference between this interaction and dancing: you have a goal that you are trying to reach.

What the Russians know and we need to learn is that by saying “no” we can drive the other side closer to the goal that we want to achieve. If we don’t learn how to do this, we can get trapped in a sales negotiation that just keeps going on and on and on.

As with all things in life, saying “no” isn’t just as simple as saying the word and then being done with it. Instead (and as the Russians have shown us in countless international negotiations) there are a 1,000 different ways to say no and you really should learn them all.

The simplest way to say no is to simply say it. And then say it again. And again. And again. Often times the first few times that you say it, the other side of the table will ignore you – this isn’t what they want to hear. However, if you keep saying it over and over again, they will eventually get your point.

For variety, you can get up and storm out of a sales negotiating session. They do say that actions speak louder than words and by physically leaving you are very clearly saying “no”. When you return, that “no” is still on the table and the discussions can pick up from there.

Finally, silence is a very powerful way of saying “no” . Just by sitting there and not saying anything you send a very powerful message to the other side of the table and they’ll quickly get your point.

How To Say “No” And Leave The Other Side Happy

Clearly if you become known as the sales negotiator who always says “no”, you’re going to develop a reputation. You want to be careful and make sure that you use this powerful weapon to help reach a deal with the other side.

The power of the “no” comes from the simple fact that after you’ve been saying “no” for awhile, any time that you say “yes” to the smallest concession, the other side will experience a thrill that will make them happy. You can use this to your negotiating advantage.

What All Of This Means For You

All too often we try to hard to make others happy all the time. When we are involved in a sales negotiation, we need to turn this tendency off otherwise it may inhibit our ability to strike the best deal possible with the other side of the table.

The ability to say “no” is a powerful tool that we all have. There are many different ways to say “no” and as a sales negotiator you need to learn to use them all.

The real power of saying “no” is that when you finally get around to saying “yes” you’ll be that much closer to reaching your negotiating goal.

Question For You: Do you think that it is possible to say “no” too much during a negotiation?

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What We’ll Be Talking About Next Time

How many times have you really wanted something only to discover that its price was too high? What did you do then – give up and go away? As sales negotiators we are taught that everything can be negotiated; however, in our personal lives (as well as our professional lives), if we see a price written down, we shrug our shoulders and say “well, that’s that” . Turns out that we’ve been getting it wrong all this time…

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Posted in negotiation skills | 3 Comments »

Follow The Bouncing Price: What Sales Negotiators Need To Know

Friday, March 19th, 2010
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During A Sales Negotiation, A Price Can Go Up Or Down Many Times

During A Sales Negotiation, A Price Can Go Up Or Down Many Times

A Price Is Not A Fixed Thing

Inexperienced sales negotiators often enter into a negotiation thinking that the price of something that they are trying to buy or sell is fixed – it’s set in concrete and cannot be changed. They think that their goal is to “discover” what this price is through negotiating. Those of us who have been doing this sales negotiating thing for awhile know differently. It turns out that the price of just about everything is constantly in flux – and we need to understand what can make it go up as well as go down…

It’s All About Expectations

Although I love talking as much as the next person, the goal of any sales negotiation is to eventually reach a deal that is acceptable to both sides of the table. In order to reach that goal, the other side of the table needs to feel that they’ve reached the best deal that they’re going to get – that it’s pointless to continue to negotiate.

This brings up the issue of expectations. Whether we’re willing to admit it or not, we’ve always got a price floating around in our head when we are negotiating. This is the price that we think that we can buy or sell something for. During the course of the negotiation, depending on what is going on, this price is going to go up or down.

Since the very same thing is going on in the heads that are on the other side of the table, perhaps it would be a good idea to take the time to understand just what makes this imaginary price go up or down.

There has been a fair amount of research done on how people manage their expectations. Specifically, the researchers have taken a close look at what makes our expectations go up or down. Here’s what they’ve found:

  • It’s All About Success (and Failure): It turns out that our expectation of what we think that we can sell something for or what we think that we can buy something for goes up or down after we experience a success or a failure during a sales negotiation. In other words, if the other side makes a concession to us, we feel that we will be able to sell at a higher price or buy at a lower price. Likewise, if we have to make a concession to the other side, then we start to feel as though we’ll have to sell at a lower price or will end up paying more for what we are trying to buy.
  • Let Them Be Successful Slowly: This understanding of mental prices leads us to the understanding that if you slowly make concessions to the other side, then their expectations for being more successful during the negotiations will only go up a little bit.
  • We Just Don’t Get Failures: Much like small successes, small failures have even less impact on the other side of the table’s mental price expectations. This is why when you are trying to get them to lower their expectations for what they’ll walk away with, you may need to get them to make the same compromise over and over again so that they finally get the point.

Where You Aim Is Where You’ll End Up

With all of this new understanding about what makes us expect more or less from a given sales negotiation, you might be wondering if there is any way that you can protect yourself from all of this up and down stuff. It turns out that there is.

The same researchers who studied how success and failure affected our expectations also too a look at what it takes in order to be more successful. It turns out that the people who set higher expectations for themselves were almost always more successful during a negotiation.

When you set high expectations for what you want to get out of a negotiation, then all of a sudden that sets the mental price that you are shooting for. Everything else gets measured against this. You can’t help but to walk away at the end of the negotiation in a better position that you would if you had set your expectations lower.

What All Of This Means For You

Like it or not, every time that we start a sales negotiation we have a price in our heads that we want to buy or sell at. The other side of the table is exactly the same — they have their own mental price. The key to a successful negotiation is making sure that you mange the other side of the table’s expectations during the negotiations.

Successes and failures during a negotiation are what cause our mental prices to go up and down. This means that you need to manage how concessions are given to the other side of the table – give too much and their expectations will shoot up.

In order to make sure that your rising and falling expectations don’t doom your negotiations, make sure that you set high expectations for yourself before starting any negotiation. If you can do this, then you will always be successful.

Question For You: Do you think that making a single big concession or multiple smaller concessions would have the largest impact on the other side’s expectations?

Click here to get automatic updates when The Accidental Negotiator Blog is updated.

What We’ll Be Talking About Next Time

As I work with sales negotiators and teams of negotiators I am constantly surprised by just how hard it is for them to say one simple word: “No” . Normally, this is no big deal – I mean who wouldn’t want to hang out with somebody who is always agreeable. However, this inability to say “no” can spell disaster when you are in a negotiation…

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Posted in concession | 1 Comment »

Do You Really Have To Have A Target When You Start A Sales Negotiation?

Friday, March 12th, 2010
Image CreditIn Sales Negotiations, You Have To Know Where To Aim In Order To Hit The Target

In Sales Negotiations, You Have To Know Where To Aim In Order To Hit The Target

The Problem With Most Sales Negotiations

So there you are, all ready to start another sales negotiation. Hold on a minute, are you really ready? Sure you’ve researched the other side of the table, you’ve created a negotiation strategy, in fact you’ve done just about everything that you can think of in order to prepare to have a successful negotiation. However, maybe you’ve overlooked the most important point of all – setting your target for the negotiation.

The Right Way To Set Sales Negotiation Targets

Doesn’t everyone know how to do this? I mean really – isn’t the goal of any sales negotiation to get the best deal? Well, yes and no. Getting the best deal is what we all want to accomplish. However, just saying that is not enough – we need to be a bit more specific and that’s where setting targets comes in.

It always helps if we have an example to make things clearer. Let’s say that you were getting ready to go buy a new car. You do your research, check out the dealer’s invoice price (what they paid for the car) and you decide that you don’t want to pay any more than $500 over invoice. However, if push came to shove, your budget would allow you to go as high as $700 over invoice.

Well wait a minute, just what is your negotiating goal here? Is it $500 over invoice or $700 over invoice? I hate to tell you this, but if you go into a negotiation with wishy-washy targets like this, you’re going to end up paying $700 over invoice every time.

In your mind you have already set $700 over invoice as a price that you are willing to pay and when the other side digs in and starts to shove back, you’re going to roll over and accept paying more than you originally wanted to. Sorry – it’s human nature.

So what are you doing wrong here? Simple, you are focusing on the wrong things. As you prepare to start a sales negotiation you should be focusing on two numbers (and only two numbers): the price that you are going to start at, and the final price that you are willing to pay. No fallback positions should cloud your mind!

In our car example, this would boil down to focusing on a starting price that was say, $300 above the invoice price and a final offer price that was $500 above the invoice price. If you were able to strike a deal with the dealer then great – you’d end up paying no more than $500 above the invoice. If not, then you’d walk away.

What To Do If You Don’t Get Your Way

So what should you do if you can’t reach an agreement that meets your target with the other side of the table? I mean come on, you really need that new car. Simple, you still walk away. Once you’ve left, you sit down and give things some thought.

If you changed your target, what would the other side have to do for you? If you decided that yes, you could pay $700 above the invoice for the car, what would you want the dealer to do for you – more options, better financing, etc. Once you’ve picked your new target, you can return to the negotiating table and restart the negotiations.

By not bending on your target price and walking away, you mentally prepared yourself to do a good job of negotiating. You had no other options to fall back on and so you didn’t.

What All Of This Means For You

Having a solid target as a part of your negotiating plan is the key to making a negotiation successful. If you confuse things by having multiple targets you’ll never be sure just exactly what you are trying to accomplish during the negotiation.

If you can’t reach a deal, walk away. You can then rethink what your target should be and what the other side would have to provide in order to support your new target.

How you set your target will determine what kind of deal you’ll eventually reach with the other side of the table. Set good targets and you’ll reach good deals.

Question For You: What could you do to make sure that you don’t set an unfeasible target for your negotiaton?

Click here to get automatic updates when The Accidental Negotiator Blog is updated.

What We’ll Be Talking About Next Time

Inexperienced sales negotiators often enter into a negotiation thinking that the price of something that they are trying to buy or sell is fixed – it’s set in concrete and cannot be changed. It turns out that the price of just about everything is constantly in flux – and we need to understand what can make it go up as well as go down…

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Posted in goal | 2 Comments »

AccNeg Life Just Got Better For iPhone/Andriod/BB Users

Saturday, March 6th, 2010

Loyal Readers,

It has been brought to my attention that our site’s appearance on touch-based smart phones was, shall we say, poor at best.

I think that I may have found a way to solve this problem. I’ve installed some new software that should change the AccNeg blog  into an iPhone application “looking” site, complete with Ajax loading articles and effects, when viewed from an iPhone, iPod touch, Android or BlackBerry touch mobile device.

As with all great experiments, we’re going to have to see how this goes. If you’ve got one of these devices do me a favor and check the site out and then post a comment to let me know how it looks — you should be able to switch between the old (“mobile unfriendly”) look & feel and the new (“mobile friendly”) look & feel.

Thanks for all of you help in making the AccNeg better!

- Dr. Jim Anderson

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Do We Really Need To Negotiate If We’re Going To Be Partners?

Friday, March 5th, 2010
Image Credit Sure You’re In Love Now, But What About Later On?

Sure You’re In Love Now, But What About Later On?

Welcome To The Age Of Partnering

Remember when every business used to view themselves as an island? This made life pretty simple for anyone doing sales negotiations – it was always us vs. them. Well, it sure looks like someone farther up the corporate ladder has been reading those business self-help books and they’ve decided that there is a better way to go about doing things: partnering.

Why Does Becoming A Partner Make Life So Difficult?

So just what is a partner? In simple terms (and it can get a lot more complicated if you let it), a partner is another company with which your company has decided to form a special, deeper, relationship. For a sales negotiator, this new type of relationship can complicate our lives immensely.

Before partnering came along, you had a great deal more latitude in how you conducted a negotiation: simply put, you really didn’t care that much about the other side of the table – you just wanted the best deal for your company. Partnering changes all of this.

The key here is to view a partnership as a bonding of two companies together (dare I say “marriage”? ) This is much different from a simple long-term partnership where you treat the other firm nicely, but you know that it’s not going to last (perhaps “dating” would be the right word here).

What Role Does Win-Win Negotiating Play In A Partnership?

One of the biggest changes that a partnership brings about in the life of a sales negotiator is the arrival (with a “thud”) of win-win negotiating. Instead of having the latitude to walk away from a deal with a partner, you’re pretty much expected to be able to reach an agreement with them. After all, they are a partner, right?

What this means is that the clever sales negotiator (you) now needs to use win-win negotiating techniques to find more things to negotiate about. The more discussion points that you can put on the table, the better your chances are that you’ll be able to craft a deal with your partner.

One important point that often gets overlooked when sales negotiators start to use win-win techniques with partners is that this does not mean that everything gets shared equally. Instead, what it really means is that everyone walks away feeling satisfied – one side may get 60% and the other may get 40%, but everyone feels as though they got what they needed.

Oh Yeah, That Power Thing

Power is a big part of any negotiation – who has it, how much of it they have, and how you can get more of it. You need to realize that just as in the fact that win-win deals don’t mean that everything is shared, the balance of power will always be unequal.

How much power you have often flows from how much information you have about the other side (your partner), and how much information they have about you. Since it’s a partnership, both of you will know more about each other than most parties involved in a standard negotiation would.

Since you know that you will be negotiating with your partner, as a sales negotiator you have a responsibility to make sure that others in your company don’t end up giving all of your negotiating power away. Sure openness is a good thing, but let’s not take it too far.

What All Of This Means For You

The role of a sales negotiator has become more complicated with the arrival of business partnerships. What use to be a relatively simple process of going into a negotiation with the goal of only improving your company’s position has now been changed.

In order to look out for a partner’s wellness during a negotiation, win-win techniques need to be used. This brings up more complicated issues surrounding what makes a deal fair for both parties and just how to make sure that you retain your negotiating power.

Business partnering is not going away. Sales negotiators need to accept this fact and adjust how we go about negotiating with this new type of opponent / adversary / other side of the table. If we can find ways to create deals that fully benefit both sides of the table both today and tomorrow, then we will have come to terms with the brave new world of partnerships.

Question for you: Do you think that negotiating with a bsiness partner is easier or harder than any other type of sales negotiation?

Click here to get automatic updates when The Accidental Negotiator Blog is updated.

What We’ll Be Talking About Next Time

So there you are, all ready to start another sales negotiation. Hold on a minute, are you really ready? Maybe you’ve overlooked the most important point of all – setting your target for the negotiation.

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Posted in win-win | No Comments »