Archive for July, 2010

Power Questions That Every Sales Negotiator Must Ask

Friday, July 30th, 2010
Image Credit You've Got To Check Your Power Before You Start To Negotiate

You've Got To Check Your Power Before You Start To Negotiate

We all know that power is an important part of any sales negotiation – who ever has the most power is in the best position to get more of what they want out of the negotiations. However, do you know how to check your power before you enter into a negotiation? I know the questions that you need to ask yourself before you start and I’m going to tell you what they are…

Can We Talk About Rules?

Nobody enters into a negotiation without having some rules (or regulations) that restrict what they can or cannot do. This impacts both sides of the table and it means that you have two pieces of homework that you need to be before starting a negotiation.

The first thing that you have to find out is what rules you will be operating under. You might think that you know what your restrictions are, but it’s always a good idea to check with the folks that you’ll be negotiating for and make sure that you know all of rules.

Secondly, you’ll want to spend some time and try to find out just exactly what the rules that the other side of the table will have to live with. There are always some restrictions on what they can and cannot do. If you can uncover what these are simply by doing some homework, then you’ll start the negotiations with more power than the other side has.

What Is Your Level Of Commitment?

There is a fable about a pig and a chicken and their various levels of involvement in creating a breakfast meal: the chicken is partially committed (egg); however, the pig is fully committed (bacon). The same question needs to be asked about the two sides of a negotiation: just how committed are you?

Ultimately the answer to this question often comes down to how much of an impact the outcome of the negotiation is going to have on you. If you are going to lose your job if you don’t get a good deal, then you will be fully committed to making the negotiations successful. However, if this deal is just a “nice to have” deal for your company, then you’re not going to be all that motivated to reach a deal.

Risky Business

Making commitments and compromises as a part of a sales negotiation involves taking on some level of risk. This can be a big deal for both sides of the table.

Before you start a negotiation, you need to determine just exactly what your level of risk tolerance is going to be. Put another way, how much are you willing to lose?

The same question needs to be asked about the other side of the table. What is their current situation? Just how far are they going to be willing to go in order to make a deal happen?

What All Of This Means For You

The source of a good outcome in a sales negotiation is making sure that you have enough power on your side when you enter into the negotiation. In order to do that, you’ve got some questions that need to be answered.

Finding out what rules are governing both side of the table will be key to understanding how the negotiation is going to turn out. Doing some homework and finding out levels of commitment and risk tolerance will also provide you with more power.

Take the time to check on your sources of power before you start your next sales negotiation and you’ll ensure that you don’t run out of power half-way through the negotiation…!

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™

Question For You: What should you do if the other side is willing to take on more risk than you are?

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

What We’ll Be Talking About Next Time

Raise you hand if you have tunnel vision! Is your hand up sales negotiator? Even if your hand isn’t up, I’m willing to bet that it should be. When we are preparing for our next sales negotiation it is all too easy to get caught up in the moment and forget about, hmm – what do they call it, oh yeah: the big picture.

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Posted in power | 5 Comments »

Sales Negotiations: How Do You Get From The Middle To The End?

Friday, July 23rd, 2010
Image Credit Crossing The Finish Line Is The Goal Of Every Sales Negotiation

Crossing The Finish Line Is The Goal Of Every Sales Negotiation

How many times has this happened to you: there you are, you’ve jumped into a sales negotiation and started off with your initial negotiating position. The other side did exactly the same thing. You are miles apart and it seems like there is no way that you are ever going to bridge the gap. What do you do now?

Movement Is Good

Although it sure can feel mighty lonely when you are in the first half of a sales negotiation, take heart – this is exactly what needs to happen. Both sides always start far apart, have some conflict and stake out their positions. This is when things start to really get interesting.

Expert sales negotiators realize that after all of this posturing is done is when the real work of crafting a deal really beings. Yes, there is a lot of distance between where you and the other side of the table sit right now; however, it’s up to you to find ways to narrow that gap.

Your job is to knuckle down and look for which issues you and the other side are closer together on. These are where you can initially spend your time trying to find ways to move closer to an agreement.

Your negotiating strategy and the other side’s will be in flux at this time. You’ll try different things and some will work, some won’t. You will test the other side’s commitment to some of their positions and they’ll do the same with you.

Much of this stage of the negotiation is based on power. You will be working to find out just exactly what the other side really wants to get out of the negotiation. The goal of this phase is for both sides of the table to come away with the belief that a deal is possible.

Into The Fire

It takes a lot of guts to be a good sales negotiator. You’ll have to prove yourself when you move to the next stage of a negotiation – this is when the hard bargaining starts.

Both sides realize that a deal is possible. However, you’ll change your tactics. You want to end up with the best deal possible and that means that you need the other side of the table to make as many concessions to you as you can get. Unfortunately the other side of the table is thinking exactly the same thing.

This is where the bare-knuckle brawling really comes out. Different sides threaten to leave, do leave, come back, etc. Pretty much every negotiation tactic in the book gets whipped out and tried during this phase of the negotiation.

This is a very difficult part of the negotiation to make it through. However, professional sales negotiators do make it through by realizing two important things: where they currently are, and where they are close to being. They know that if they can stick with it, they’re almost done.

Striking A Deal

You will never be able to negotiate the perfect deal. What will happen is that you’ll push and push to get a better deal and eventually you’ll hit the brick wall at the end of the tunnel – you’re not going to get any more from the other side.

When this happens, you’ve reached the end of the negotiation. You need to take a moment and asses where you are. Can you live with the deal that is currently on the table?

You need to realize that if you can’t, then you are going to have to start negotiations all over with another partner. However, if you can live with the deal, then you are very close to being done.

Assuming that the deal that gets written down accurately reflects what you think that you verbally agreed to (it doesn’t always!), then you’ve successfully negotiated a deal.

What All Of This Means For You

Inexperienced sales negotiators can often get lost in the middle of a sales negotiation. They know how to start the negotiation; however, once it’s under way and they realize just how much distance there is between their position and the other side’s, they don’t know what to do next.

The correct thing to do is to realize that you need to spend time working to close the gaps. Once this has been done, you will be in for some hard negotiating in order to move towards closure. A deal isn’t done until both sides can agree on a written version of the agreement.

Professional sales negotiators have a secret weapon. They never give up hope no matter how difficult things get. That’s what makes the deals that they reach feel so good for both sides of the table.

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™

Question For You: How can you tell when you’ve reached the end of a sales negotiation?

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

What We’ll Be Talking About Next Time

We all know that power is an important part of any sales negotiation – who ever has the most power is in the best position to get more of what they want out of the negotiations. However, do you know how to check your power before you enter into a negotiation? I know the questions that you need to ask yourself before you start and I’m going to tell you what they are…

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Posted in negotiations | No Comments »

Why Sales Negotiations Always Seem To Be A Failure Early On

Friday, July 16th, 2010
Image Credit It's always darkest just before the storm…

It's always darkest just before the storm…

I often like to think of a sales negotiation as being very similar to a dance. The first few moves are very well known and are recognized by both sides. However, very quickly things can get out of control. Neither partner recognizes what the other partner is doing and toes start to get stepped on. Does it always have to go this way?

The Beginning Of Bargaining

Unfortunately I believe that the answer is “yes”. Ever sales negotiation seems to follow a fairly predictable course. We always seem to start out on the right footing – doesn’t every negotiation start with pleasant introductions?

It’s what happens after the introductions that the expert negotiators focus on the most. They realize that the next step is when the real bargaining starts.

Once upon a time I took a business course on “organizational behavior”. Although that was a long time ago, I can still remember the phases that people go through when you throw them together as a part of a team: forming, storming, conforming, and norming. After I took this course I can remember being amazed when I observed that in real life these really are the steps that teams go through.

The same can be said of sales negotiations – they too seem to follow a standard path…

Why Can’t We All Just Get Along…?

Why does it have to be this way? Sales negotiations always seem to quickly descend into hostility and verbal sparing. For the sensitive negotiator this can quickly appear to be movement in the wrong direction.

We need to understand why this happens. One of the key reasons is that at the start of a negotiation both sides of the table are as far apart as they are ever going to be.

We all enter a negotiation with a starting position (what we want) that may appear to be unrealistic to the other side. This is going to make the other side think that the possibility of reaching an agreement with us may be out of the question.

We all react to this situation in the same way. We attack the other side’s position and force them to defend themselves. We force them and they force us to take different postures in order to justify where they are coming from.

What All Of This Means For You

Every sales negotiation has its ugly parts. Most often right after the negotiations start, things appear to head off into the wrong direction.

Experienced sales negotiators realize that this is a normal part of every negotiation. Since both sides start so far apart, conflict and disagreement are to be expected.

The key is to realize that this is only one part of a much larger negotiation. If you can make it through this part, then things will get better. Remember, things always seem the darkest just before the dawn…

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™

Question For You: How can you tell the difference between a tough negotiation and a hopeless one?

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

What We’ll Be Talking About Next Time

How many times has this happened to you: there you are, you’ve jumped into a sales negotiation and started off with your initial negotiating position. The other side did exactly the same thing. You are miles apart and it seems like there is no way that you are ever going to bridge the gap. What do you do now?

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Posted in how to negotiate | 2 Comments »

Remember: “Negotiation” Spelled Backwards Is “Change”

Friday, July 2nd, 2010
Image Credit Sorry -- There's No Way To Calculate How A Negotiation Will Go

Sorry -- There's No Way To Calculate How A Negotiation Will Go

So what’s the secret to conducting a successful negotiation? Is it taking enough time to plan? Is it picking the right place to hold the negotiations? Turns out that none of these are the right answer. Instead, if you want to be successful you need to do one simple thing: plan for everything to go wrong.

The Power Of A Good Plan (Not!)

Now I don’t want you to get me wrong here, but I’ve got some news for you that just might come as a surprise to you. Yes, it is important to plan out each of your negotiations. You want to take the time to do your homework, identify what the other side is really going to be looking for, and come up with a plan that you think is going to allow you to get what you want out of the negotiation.
Umm, this is where things get just a bit awkward – for you see, that plan is never going to work out. What none of us take into consideration (not like we can) is just exactly what the other side of the table is going to be doing during the negotiation. In a nutshell, they are going to be actively working against us. They are going to be trying to foil our every attempt to get an upper hand during the negotiation.
Ultimately what this means is that the carefully laid out plan that you had come up with before the negotiations started will very quickly turn into junk due to changes in circumstances. Dang it – why can’t the other side just do what you want them to do?

Your Defense Against Changes: Part 1

The fact that the other side of the table is going to be actively working against you really should come as no surprise to you. Hey, you’re basically doing the same thing to them! What you need here is a way to defend your carefully laid out plan against their crafty ways.
The concept of how you need to prepare to do battle to save your plan is actually pretty simple – the execution is another story. What you are going to want to do is to sit down with a colleague prior to the negotiation and do some role-playing.
You will, of course, want to play you. You’ll need your partner to play the other side of the table. What you want them to do is to frustrate your every move. You really want them to require you to do two things simultaneously: defend the positions that you are laying down and resist their clever arguments / positions.
You’re going to hate doing this. However, it really is the best way to discover where your arguments are weak and how you’re going to need to do a better job of resisting the other side’s proposals.

Your Defense Against Changes: Part 2

What’s a sales negotiator to do when the other side does something that makes their game plan completely moot? The worst thing that you can do is to continue to negotiate without a plan.
What you do need to do is to stop the proceedings. Call for a break. Ask for a timeout. Just do something to cause the negotiations to come to a halt. Give yourself some time to think about what’s just happened.
This is the time that you’re going to have use to come up with a new plan very quickly. The ability to adjust to changing negotiating circumstances and to adjust your strategy to meet the new reality is the mark of a great sales negotiator.

What All Of This Means For You

Planning is the right way to prepare for your next sales negotiation. However, professional negotiators will tell you that no matter how carefully you plan, you are going to discover that your plan will very quickly become out of date.
What you need to do is to work with a partner when you are preparing for a negotiation. That partner needs to attack your positions and offer their own positions that you need to find ways to push back against. It’s tough work but it will prepare you for the battle that lies ahead.
Remembering that you will need time during the negotiation to regroup and create new plans is critical. Remember, a sales negotiation is not a race to get to the end, but rather much more like a dance where how you conduct yourself during the negotiation will determine what your final score is.

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™

Question For You: Do you think that it is even worth it to create a plan if it’s just going to get tossed out the window early on?

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

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