Archive for September, 2010

What Motivates The Other Side Of A Sales Negotiation?

Friday, September 24th, 2010
Image CreditWhat the other side wants is what is going to motivate them

What the other side wants is what is going to motivate them

In order to be successful in a sales negotiation, you need to play two roles: your side of the negotiating table as well as the other. When you are trying to determine how the other side of the table views the world (and therefore how they will negotiate with you), one of the most important discoveries that you need to make is to find out just what motivates them…

More Than Meets The Eye

One of the most important things that you’ve got to realize about the motivations that are driving the other side of the table, is that they may be unknown. The analogy is much like an iceberg: it’s not what is above the surface, but rather the part that is below the surface that you’ve got to watch out for.

When you are stepping into the other side’s shoes in order to better understand what their motivations are, you’ve got to think beyond the obvious. Once you’ve identified the obvious things that may be driving their positions, take the time to go farther – what might be making these issues important to them?

Can We Talk About Value?

A key component to better understanding how motivated the other side is going to be is to understand what they think that what we are offering to them is worth. The more value that it has, the more motivated they will be to reach a deal with us.

An important point to realize is that there are two types of value that you need to take into consideration: short term and long term. The longer term the value is of the issues that are being negotiated, then the greater value they have and the more likely a deal can be reached.

The Third Man

Reaching a deal is a wonderful feeling for everyone at the table. We shake hands and congratulate each other after it’s done. However, the deal that we’ve reached may not be for the people at the table.

In order to fully understand the motivation that is driving the other side of the table, we need to make sure that we know who is pulling the strings. If a deal is reached, who within the other side’s organization stands to benefit the most?

Get Out Your Wallet

One of the keys to understanding motivation is to know who’s going to pay? Every agreement that we reach has a cost associated with it. This means that in the end, someone is going to have to get their wallet out.

Don’t let yourself get fooled into thinking that it’s the other side of the table that’s going to be paying. It can often be a 3rd party such as their customer, etc.

Problems With Risk

In order to understand what motivates someone, you need to understand both what they want – and what they don’t want. This means that you’re going to have to develop an understanding of how they view risk.

The key is to understand just how risk adverse they are. The more risk adverse they are, the stronger lever you have that can be pulled during the negotiations

What All Of This Means For You

Motivation is what drives you during a sales negotiation. It’s the same thing that is driving the other side of the table during the negotiation also. You need to take the time to understand the other side’s motivations.

To do this you’re going to need to find out what their motivations are, understand who is driving their motivations, and realize who’s going to benefit the most from the negotiations.

Once you’ve got this all covered, you’ll be in a good place. You’ll be able to understand why the other side makes the decisions that they do. Once you have this level of understanding, reaching a deal with the other side will have become that much easier…

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

Question For You: What’s the best way to discover what motivates the other side in a negotiaton?

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

What We’ll Be Talking About Next Time

Let’s go hunting, shall we? If you are getting ready to enter into a sales negotiation, then you need to make sure that you have collected all of the information about the deal and the other side of the table that you can. In order to do this, you’re going to have to get good at hunting for information. Let me act as your hunting guide…

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In A Sales Negotiation, Ya Gotta Have A Strategy…

Friday, September 17th, 2010
Image Credit Having A Good Strategy Means That You Always Know What Your Next Move Is…

Having A Good Strategy Means That You Always Know What Your Next Move Is…

If you were the coach of a football team, you wouldn’t go into your next game without a strategy for winning would you? Then why would you ever consider starting a sales negotiation without having a strategy for getting the deal that you want to get?

Issues = Strategy

Before you can even start to create a strategy for your next sales negotiation, you’re going to have do some homework first – sorry about that. Where you want to get to is defined by the issues that you need to deal with.

Not all issues are created the same and not all issues need to contribute to your strategy. This is a point that can confuse some negotiators. You’ll never get your way on everything so you need to prioritize the issues and determine which ones are key to where you want to go in the future. Issues bigger than just this negotiation should help you to make these types of decisions.

Rank ‘Em & Yank ‘Em

Knowing the issues is the starting point, but prioritizing them is the next step. As with all such things in life, it’s not a matter of “important” and “unimportant” issues.

Instead, negotiating issues can generally be classified into three groups: musts, gives, and don’t-cares. The musts are the ones that will form the basis of your sales negotiating strategy. The gives and the don’t-cares will be the tools that your strategy will use to get you to the deal that you are looking for.

Where To Start?

Knowing what the issues are and just how important each of them is to you is where you need to start. The next step that you need to take is to make a decision on what starting position you want to take on each issue.

It’s not so much how you feel about the issue that will guide you here, but rather how you feel that the other side of the table thinks about it. Your starting position should be either closer or farther from their position depending on just how much time you want to spend on the issue and how important it is to you.

Got A Fallback Plan?

One of the reasons that people are attracted to the world of sales negotiating is because by its very nature, it’s dynamic – things are always changing. This includes your strategy: it’s going to have to change during the negotiation.

Realizing this, you’re going to have to come up with one or more fallback plans. The fallback plan will come into play as you move from your starting position on the issues to where you want to end up. The path that you take may not always be the one that you expected and so a fallback plan is needed.

Seeing The Future

Any good sales negotiating strategy has to have an end game. You’ve got to shut your eyes and picture how you think that the future will turn out.

Of the issues that will be negotiated, which ones do you think that the other side will be willing to settle first? Which one will come next? How about after that?

As issues get resolved, the negotiations can become more difficult – you’ll have fewer cards left to play. Your negotiating strategy needs to have a plan for in which order you want the issues to be resolved so that you can walk away with the best deal possible for you.

What All Of This Means For You

To get to where you want to go, you need to have a strategy that tells you what you’ll do at each step along the way. The quality of the outcome of your next sales negotiation may very well rest on the quality of your negotiation strategy.

A good sales negotiation strategy starts with having a good understanding of the issues that will be negotiated. It then builds on this by prioritizing the issues, creating a starting position for each one along with a fallback plan, and finally determining in which order you want to resolve the issues.

Taking the time before your next sales negotiation starts to study the issues and create a solid strategy will pay huge dividends. Having a good strategy is what sets the great sales negotiators apart from everyone else.

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

Question For You: How long do you think is reasonable to spend creating a strategy for a sales negotiation?

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

What We’ll Be Talking About Next Time

In order to be successful in a sales negotiation, you need to play two roles: your side of the negotiating table as well as the other. When you are trying to determine how the other side of the table views the world (and therefore how they will negotiate with you), one of the most important discoveries that you need to make is to find out just what motivates them…

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Posted in strategy | 1 Comment »

Aim For Sales Negotiation Success By Picking The Right Target

Friday, September 3rd, 2010
Image Credit You've Got To Be Able To See Your Target If You Want To Be Able To Hit It

You've Got To Be Able To See Your Target If You Want To Be Able To Hit It

What is the #1 thing that you need to do before you sit down at your next sales negotiation? Polish your shoes? No. Work on your icy “that deal’s not good enough for me so don’t even offer it” stare? No. How about something much simpler that all too often gets forgotten by even the best sales negotiators: picking your target.

Why Are We Doing This?

I’d like to be able to tell you that things like this never happen, but the sad reality is that all too often they actually do. The reasons vary, but generally they start when someone taps us on the shoulder and asks us “to attend” a meeting with a partner or vendor. What started out with us in the role of an observer can suddenly transform itself into a full-fledged negotiation session if we’re not careful.

One way to make sure that this doesn’t happen to you is to make sure that you know the purpose of any meeting that you are being asked to attend. You can’t keep yourself from getting sucked into heading up a spur of the moment negotiation session, but you can make sure that you know why you are doing it.

It’s All About The Issues

If you want to know what the target of any sales negotiation is, then you’re going to have to have a handle on the issues that will lead you to where you want to go. The key thing here is to remember that not all issues are created the same.

Generally, the issues that will be negotiated can be placed into one of three categories: critical, negotiable, and don’t care. The critical issues are the ones that matter the most to your firm. The negotiable ones are where you have some latitude and can be used to make sure that you get what you need on the critical issues. Finally, the don’t care issues are on the table simply to give you more things to talk about with the other side as you work to put a deal together.

Back To That Target Thing

If you want to reach the target of a sales negotiation, knowing what the issues are and just how important they are to your company is an important first step. However, it’s not enough. You’ve got to do a “coin analysis” on each issue.

This means that you need to pick it up and look at both sides – both the pros and the cons (every issue has both). You can be well assured that the other side will be pointing out these issue characteristics to you during the negotiation and so you had better be aware of them going in to the discussion…

Getting Off To A Great Start

I believe that how a negotiation starts often determines how it is going to end. What this means is that you’d better have your act together right off the bat if you want to walk away from the table with a good deal.

One key thing that you’ve got to bring to the table are opening offers for each of the issues that are going to be discussed. You really don’t want to be making these up on the fly! Carefully planning out how you want to start the discussion will put you in the drivers seat and will make it that much easier to get to where you want to go.

What All Of This Means For You

If you want to be successful in your next sales negotiation, then you’ve got to have a clear target that you are aiming for. Taking the time to get this taken care of before the negotiation starts is critical.

In order to get to your target, you are going to have to make sure that you have a firm grasp on just exactly what issues are being negotiated. This means that you’re going to have be aware of the pros and cons of each issue and you are going to have to have a well-formed opening offer for each.

Taking the time to identify the target that you want to hit as a result of each sales negotiation can do wonders for your success rate. Ultimately, taking the time to know where to aim your time and energy is the ticket to long-term sales negotiation success.

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

Question For You: Do you think that you should only have one target for a sales negotiation or is it ok to have multiple targets?

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

What We’ll Be Talking About Next Time

In order to be successful in your next sales negotiation, you need to make the right decisions before you sit down to start negotiating. If you take the time to make the right decisions then you can end up being successful.

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