Archive for the ‘authority’ Category

No Authority / Full Authority Sales Negotiations

Tuesday, March 3rd, 2009
Lacking Authority Can Leave Sales Professionals Feeling Naked In A Negotiation

Lacking Authority Can Leave Sales Professionals Feeling Naked In A Negotiation

Sales professionals really don’t like to enter into a negotiation naked. When you don’t have any authority to make concessions, you basically feel pretty naked.  Likewise, if you have full authority, then you’ve got a whole other set of problems.

Back to the poor sales negotiator who has no authority. Hold on a minute, they actually do have a lot of authority. Here’s what they have:

  • the authority to collect information and represent the other side of the table back within his organization.
  • the authority to attempt to create a “both win” type of negotiation.
  • the authority to establish both support and commitment with the other side of the table.
  • the authority to deal with different members of his organization in the role of a specialist.
  • the authority to try to reach a deal on a personal level.

The sales professional is really only prevented from giving in to any of the other side’s demands. Since he / she still has the ability to negotiate, it’s worth the effort because there is the possibility that the other side will make concessions and a deal can be struck, or at least valuable information about the other side will be collected.

If you’ve ever been in a no authority sales negotiation situation, then you’ve probably dreamed of having the ability of being in a sales negotiation where you had full authority. Careful what you wish for – this isn’t all that it’s cracked up to be.

The reason that full authority is not necessarily what you either want or need is because the name is actually misleading. Full authority simply means that whatever you agree to is what your  side of the table will end up having to do. This can lead to disaster. Here are some reasons why you might not want to have full authority when you enter a negotiation:

  1. Both sides of the table may not have equal authority.
  2. Both sides of the table may differ in stamina or physical qualities.
  3. Either side may not be properly prepared.
  4. Either side may be role playing.
  5. A side may be more secure than the other.
  6. A side may be busier than the other.
  7. A side might be more wealthy than the other.
  8. A side might be more emotionally involved than the other.
  9. Either side may have better support staff.

Should you find yourself in a sales negotiation with full authority, all is not lost. There are several ways that you can get out of this predicament. Here are a couple of suggestions:

  • Say that you are not familiar with how things operate.
  • Indicate that you will need to check with the board of directors.
  • State that there is a legal problem.
  • State that you need to check with a government agency.
  • Say that this may involve anti-trust issues.
  • Indicate that this deal actually depends on another deal that is currently being negotiated separately.
  • State that you have to tell your coworker / partner.

If none of these “escape” techniques work for you, you can always fall back on the old reliable – “I don’t know”. You may feel foolish for saying it, but at least you won’t end up negotiating a bad deal.

Have you ever entered into a negotiation with no ability to make concessions? How did you feel? How did that negotiation turn out? Have you ever had full authority in a negotiation? How did that turn out? Leave me a comment and let me know what you are thinking.

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Succeed By Bringing The Ghost Whisperer To The Negotiation

Thursday, January 1st, 2009

Don't Look Now, But You're Negotiating With More People Than You Think You Are

Don't Look Now, But You're Negotiating With More People Than You Think You Are

So there you are, sitting across the the table from the other side starting a negotiation. If only you are able to use your considerable negotiating talents to convince them that what you want is best for them, then you’re sure to get what you want – right? Nope, it turns out that although you might think that it’s just you and the other side talking, it turns out that room is actually crowded with negotiating ghosts that you’re going to have to learn to talk to…

The other side of the table rarely represents just themselves. No matter if you are trying to buy a car from them or sell them a house, you are really talking with someone who is really part of a larger organization. This can be a whole company, a spouse, kids, a banker, etc.

What this means to you as a negotiator is that the other side is going to have to satisfy the demands of their extended team (upper management, sales, the union, the spouse, etc.). They are going to have make sure that everyone on their side has their needs met before they can reach an agreement with you.

Although there can be quite a mix of people whispering into the other side’s ear, there are four common characteristics that all of these impacted parties will share:

  1. Not All Will Agree: This means that there will be conflict among members of the same team. If they can’t agree, then this will impact the other side’s ability to agree to your proposals.
  2. Nobody Is The Same: All of the different individuals that the other side is representing have different needs and different priorities. This may be why the other side seems to be changing their direction so often.
  3. Not All Are Equal: Although there may be multiple parties whispering into the other side’s ear, not all of them have an equal role to play when it comes to making a final decision.
  4. Not All Benefit The Same: Just as all are not equal, so too not all will benefit the same amount from whatever deal you are negotiating.

All of these Ghost Whisperer issues lead you, my dear negotiator, to one simple conclusion: you need to come up with a way to deal with all of these “negotiation ghosts”. Here are four tips for doing so:

  1. You need to find out who is really making the decision on each issue in the negotiation. Keep in mind that it might be a different person for each issue.
  2. Make sure that you get commitments from the people behind the other side when it comes to the value of the thing that you are offering and the validity of your offer.
  3. Have the fundamental realization that the other side will be unable to give you the “yes” that you are looking for until his people allow him to give it. This means that your job is really to help him to get them to give him permission.
  4. Oh yeah, you’ve got the same issues – you are really negotiating on the behalf of many different parties. You need to be a good enough negotiator that you are able to get your people to approve your ability to reach an agreement with the other side.

When you negotiate, whom do you have whispering in your ear? Have you even negotiated with the other side when you didn’t know who they needed to please? How did you handle this? Has a deal ever been agreed to and then nixed because some outside party’s approval was not given? Leave me a comment and let  me know what you are thinking.

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The Seven Deadly Sins Of Preparing To Negotiate

Tuesday, June 17th, 2008

The Seven Deadly Sins of Preparing to Negotiate
You wouldn’t show up for a job interview naked (well, let’s say that you wouldn’t show up naked for MOST job interviews). You wouldn’t sit down to gamble in Las Vegas unless you knew the rules of the game. You wouldn’t start to run a marathon while wearing snow boots. So why would you ever even dream about starting a negotiation with a bunch of wrong assumptions?

You would be amazed at how many people actually do this. Somehow we have all talked ourselves into believing a lot of stuff about how negotiating is done and just who has the negotiating power that are flat out wrong. We seem to get ourselves offtrack even before we start to negotiate. How about if we spend some time now and identify these Seven Deadly Sins so that we can stop doing them!

  1. We assume that the other party is all-powerful and is holding all the cards.
    Fact: In truth, the other side rarely, if ever, is , or does. Instead at the start of a negotiation, power is shared by both sides. Perhaps not equally, but you always do have some power.

  2. The other side has a clear idea of exactly he wants.
    Fact: Sometimes he does, sometimes he doesn’t, no matter how detailed he may have been in describing what he is looking for before the negotiations begin. Often times, the other side has a lot of details about something that won’t fix their problems. It’s your job as a part of the negotiation process to listen and discover their true issues.
  3. The other side is only concerned about price.
    Fact: price is the most overrated word in negotiation. It is an important part of the whole negotiation; however, it’s not nearly as big of a deal as most people make it out to be. There are lots of other issues that need to be discussed and these issues will diminish the importance of price in the final agreement.
  4. There are other people / companies / products that have a better solution to offer the other side than you do.
    Fact: This is almost always never the case. Of course there are other options for the other side no matter if you are talking about going on a date or buying an airplane. However, every single other option has an up side and a down side associated with it. What you bring the table has an up side and a down side also. Now the only thing to negotiate about is how valuable your up side it to the other side.
  5. You’d be in a better position to negotiate if only you had more authority.
    Fact: In most negotiations, you’d be better off with less authority. Less authority means that you can build better relationships with the other side because you are NOT the decision maker, instead you are both in this together trying to come up with an agreement that “they” will accept.
  6. Your only real weapon is the ability to ask for less.
    Fact: Asking for less is only one of the literally dozens of negotiation tools at your command, and, oh by the way, many are much more effective than asking for less.
  7. You treat negotiating like just another meeting.
    Fact: failing to get enough sleep, do your homework, or wear comfortable clothing all provide the other side with power over you. Why would you ever put yourself at a disadvantage just because you didn’t take the time to prepare?

There you go — now you know the 7 deadly sins that can diminish your negotiating power even before you start to negotiate. Overcoming these 7 can be challenging; however, learning to do so will start paying you back right off the bat.

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