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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?

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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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Post tags: commitment, concerns, lazy, negotiation power, regulations, risk tolerance, risks, rules, worried about

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The 3 Rules Of Power In Negotiations Require You To Be Cautious

Let your mind drift back to the last sales negotiation that you were involved in. When talk finally got around to negotiating a deal, after all of the PowerPoint slide shows, all of the RFP responses, maybe even the product bake-offs, who had the upper hand – you or the other side of the table?

Why Power Matters

The upper hand in any negotiation is held by the side that has the most power. In sales negotiations, power is a slippery thing. It’s hard to tell how much of it you have and likewise, it’s hard to tell how much of it the other side of the table has. Despite all of this, it’s a critical part of the process – “he who has the most power in a negotiation will probably end up being MORE satisfied by the outcome.”

What all of this means is that you’ve got to get better at evaluating the situation: you’ve got to know how to find out how much power you have and how much the other side has.

Power Management: How It’s Done

Sales people have known for a long time that negotiation is a process of information discovery. During this discovery process you learn what your sources of power for this particular negotiation are. That being said, there are three negotiating rules that will help you to learn more about your power during a negotiation:

• Rule #1 – You Have More Power: The #1 rule of power management in a sales negotiation is for you to realize that you ALWAYS have more power on your side than you think that you do. Even if you think that you don’t have ANY power at the start of a negotiation, then you’re wrong – otherwise why would the other side be negotiating with you?

• Rule #2 – Power Is Not Real: You need to understand that power is not real. It only exists in your mind and so it is what you think it is. If you think that you are powerful, then you are. If you don’t think that you are powerful, then you won’t be. Of course this means that you always need to picture yourself as being powerful no matter what the circumstances are. Easy for me to say, hard for you to do.

• Rule #3 – Power Flows: The level of power that we start a sales negotiation with is not constant throughout the negotiations. The other side may make verbal blunders and reveal too much, they may make too many concessions, or do other things that will increase our power during the negotiation. Likewise, if we aren’t careful we can give away our power during the negotiation.

What This Means For You

These three rules of negotiating power are your ticket to success. At the end of the day, every time that we enter into a negotiation we’re hoping that we come out of it feeling satisfied with what we were able to accomplish – we didn’t give away too much and we got what we needed.

In order to get this type of satisfaction we need to have enough power on our side to enable us to get our way on those things that count.

Realizing that negotiating power is a state of mind and that we have control over how much of it we have will allow us to use it to close better deals and close them quicker.

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What We’ll Be Talking About Next Time

When you hold up a mirror and look into it, what do you see? Do you see a good negotiator? How could you tell if you were looking at one? This is one of those timeless questions that we are always asking ourselves: am I a good negotiator? Well good news, I’ve got the 5 questions that you need to answer in order to resolve this issue once and for all!

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Post tags: balance of power, deal, goals, negotiation, negotiator, positioning, power

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In A Negotiation, Power Is What We All Want To Have The Most Of...

At the end of the day, negotiating is all about power , who has it, who wants it, and what to do with it. You can read every book out there, you can attend every training class offered, you can even do your own field research, but ultimately what you will be trying to find out is how you can boost your power when you are in a negotiation.

I’ve got some great news for you , you don’t have to do all of that reading, attend all of those classes, or even do any field research. I’ve pulled together the top 10 ways that you can boost your negotiating power. Without any further ado, here they are:

1. Set the stage to get a “yes” answer: This one is pretty simple , if you make the negotiating environment a positive one you are more likely to get the other side to agree to your proposals. This means that you need to provide plenty of food and drink and you need to take the time to get to know the other side on a personal level.
2. Take Many Notes: : there is a whole lot of talking going on when you are negotiating and things can get confusing, pretty quickly. The great negotiators are always easy to recognize , they are the ones who are taking lots of notes. This is how they can remember who has made what concessions.
3. How You Look Matters: : when you are negotiating, you need to dress as though you were at least two, maybe three, levels higher in the company than you really are. The way that you look is the way that the other side of the table will treat you.
4. More Is Better: : never enter a negotiation by yourself. Make sure that there is always someone else on your side of the table. An extra set of ears, eyes, and notes can only help you do better.
5. Bring Proof: : Often during a negotiation you will take a position and the other side will challenge you to change your mind in order to make a deal happen. If you have brought along published rules, regulations, or statistics than you can easily defend your position and the other side will have to leave this issue alone.
6. Practice, Practice, Practice: : Always take the time to practice what you are going to say and how you are going to react the day before the negotiation starts. This is what the pros do.
7. Keep Your Options Open: : don’t go into a negotiation thinking that you have to have this deal. Instead, do your homework before the negotiation starts and make sure that you know what other options you have.
8. It’s Not Over Until The MOU Is Signed: : when the negotiations have finished, make sure that you are the one who writes up the final agreement , this is the most powerful role in the whole process.
9. Keep Your Mouth Shut: : the more you say, the more ammunition the other side has to use against you. Make sure that you say as little as possible and your power will stay strong.
10. Always Be Ready To Walk Away: : … and ready to come back to the table. The ability to get up and walk away from the negotiating table is a powerful tool. However, don’t be foolish , always come back and see if you can find a way to make more progress.

What All Of This Means For You

Power is a tricky thing in the best of circumstances. During a negotiation, it is even more challenging to deal with. Since it can’t be seen or measured, all too often negotiators decide that there is nothing that they can do about it , you either have it or you don’t.

It turns out that this is not correct, negotiating power is something that the great sales negotiators know how to grow and cultivate. There is no one thing that you can do to build up your negotiating power, rather there are a lot of little things that you can do.

Print out this list and bring it along with you the next time that you start a negotiation. Review it the night before the negotiations start and then put it somewhere where you can easily see it during the negotiations. You’ll be amazed at just how much power you find that you have after all.

What is the one thing that you believe that you need to do to boost your power in your next negotiation?

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What We’ll Be Talking About Next Time

It’s all too easy to get caught up in the theory of negotiating and sometimes we forget to take the time to look around us and see other deals that are being made – and learn from them. If we needed a recent deal to teach us a lesson, the $20 billion dollar Clear Channel private equity buy-out would be a good example — because it almost didn’t happen!

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Post tags: agreement, bargaining power, cold calling, Dress Appropriately, effective negotiation skills, great negotiators, hostage negotiator, negotiating skills sales, negotiation bargaining, negotiation conversation, negotiation dispute resolution, negotiation seminars, negotiation skills, negotiation skills books, negotiation skills training, negotiation tactics, negotiation techniques, negotiation tips, negotiation training seminars, negotiator, problem solving negotiating, Published Material, salary negotiation skills, sales negotiation, sales negotiation definition, sales negotiations tips, Take Many Notes, training seminars, ury negotiation

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How You Dress Can Impact Your Bargaining Power...

Having some bargaining power when you are involved in a sales negotiation is a good thing. Have super bargaining power is much, much better. Most of us do a few things to prepare for a negotiating session, but are we doing enough? The answer in most cases is no. Let me tell you what you can do to fix this…

The following tips for how to gain more power for your side of the table during a negotiation come from the professional negotiators who do this for a full time living and who have been doing it for many years. Read on and learn from their experiences.

Prepare To Hear A “Yes”

All too often as sales negotiators we can spend all of our time focused on the deal being negotiated. Since any agreement that we’ll be able to reach will be between two people, we need to spend some time focusing on making the other side of the table comfortable enough to say “yes”.

This has nothing to do with what’s being negotiated and has everything to do with the negotiating environment: is there plenty of food and drink? Have you taken the time to get to personally know the other side of the table? These things may seem small, but they can play a big role in making the other side more comfortable in saying “yes” to you.

Take Many Notes

If you’ve ever seen an expert negotiator working, you’ve seen a pen in their hand and a notepad in front of them. The reason for this is because they know that one of the unspoken secrets to doing a good job of negotiating is simply remembering what has already been discussed. Writing everything down will allow you to remember what concessions have been made by both sides and will allow you to move forward instead of just spending time chasing your tail.

Dress Appropriately

One point that is easily overlooked by most negotiators we prepare for a negotiation session, but not by the great negotiators, is that how we look will play a big role in determining how much power the other side will be willing to give us. Normally this means that we should try to dress like the people who are two or three levels higher in our organization than we are. However, if you are trying to convince the other side that your funding is limited, then “dressing down” would send the appropriate message.

Bring A Friend

Being the only person on your side of the table can not only be lonely, it can also be dangerous. Having another set of eyes and ears is invaluable in collecting information about how the other side is reacting and how things are going. Negotiations can move so fast at times that there is no way that a single person can stay on top of everything that is going on.

Fortify Yourself With Published Material

This is almost a variation of the “defer to a higher authority” tactic, but if you have well accepted external material that you can refer to during the negotiation, then issues that pop up can be quickly resolved (hopefully in your favor).

What All Of This Means For You

The difference between a good negotiator and a great negotiator is not that the great negotiators have access to some secret powers. Instead, it comes down to the simple fact that through experience they’ve learned lots of small details that when taken together serve to strengthen their bargaining position.

What this means for you is that you can move from being a good sales negotiator to being a great sales negotiator simply by taking the time to learn what these details are. Once you’ve mastered them, you’ll be that much closer to being unstoppable!

What is the one thing that you could do that would have the greatest impact on your bargaining power during your next negotiation?
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What We’ll Be Talking About Next Time

At the end of the day, negotiating is all about power , who has it, who wants it, and what to do with it. You can read every book out there, you can attend every training class offered, you can even do your own field research, but ultimately what you will be trying to find out is how you can boost your power when you are in a negotiation.

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Negotiators Have Both Positive And Negative Sources Of Power (C) - 2008

The single  most important factor in determining how a negotiation is going to turn out centers on a single question: who has the most power? The big problem that most of us have is that we don’t think that we have enough of it. Turns out, we’re generally wrong about this…

The Secret Of Negotiating Power

What is power in a sales negotiation? Simple – it’s the ability of one side of the table to control both the resources that are available to the other side as well as the benefits that they can get.

At all times during a sales negotiation it is your responsibility to be looking for ways to build up your power base while at the same time working to prevent the other side of the table from gaining leverage over you (and thereby causing you power loss).

Where Does Your Power Come From?

All too often when I’m talking with sales negotiators, they’ll tell me that they don’t feel as though they have enough negotiating power to be successful in an upcoming bargaining session. When we talk a bit more, it quickly becomes apparent that they are only seeing half the story. Specifically, they are only thinking about “positive power“.

Positive negotiating power comes from all of the things that put you in a good position to negotiate. Having plenty of time to make a deal, having attractive alternatives, having plenty of funding, etc. – these are all sources of positive power for you.

What my clients always seem to overlook is that they also have “negative power” working for them. Negative negotiating power comes from limitations and restrictions that the other side of the table is working under. These can include the need to reach a deal quickly, not having a good alternative to dealing with you, or even limited availability of funds.

Final Thoughts

The power that you have during a sales negotiation isn’t something that sits on the table next to you. Instead, it’s more like a feeling of confidence that you have when you sit down at the table.

Not only do you have the easily recognizable sources of positive power working for you, you also have the hidden sources of negative power on your side also. If you can learn to spot both of these power sources before you enter into your next negotiation, then you will be able to close better deals and close them quicker.

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What We’ll Be Talking About Next Time

All sales negotiations are driven by both public and private needs. If you can understand and deal with the other side’s hidden needs, then you’ll have more power during the negotiation.

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Post tags: art of negotiation, bargaining power, how to negotiation, negotiating sales, negotiating skills, negotiator, sales, sales negotiation

Negotiation is all about power. The trick to walking away from a sales negotiation feeling satisfied about what you were able to achieve is to make sure that you walk IN to the negotiation with more negotiating power than the other side has. Sounds easy doesn’t it? I’ve been amazed  over and over again to see sales negotiators just give away their negotiating power to the other side time after time. They just don’t realize that they are doing it. Let’s see if we can put a stop to this…

How Do Sales Negotiators Lose Power?

Negotiating power can be a be a funny thing. You can have a lot of it and not even know it. Likewise, you can give it away and not be aware that you are doing so. There are a lot of ways to lose power but the #1 way is for you to run your mouth too much. Ultimately negotiating power is all about having more information. Whichever side of the table has more information about the other side has the power. Information can be used against you, so you want to hold on to it as tightly as possible.

How To Hold On To Power During A Sales Negotiation

If only it was as easy as keeping your mouth shut! Nope, there are actually a number of things that you can do in order to ensure that you keep the upper hand when it comes to negotiating power during you next sales negotiation:

• Don’t Talk Business: In the small talk that occurs before the start of any sales negotiation, don’t talk about business. You might be able to not give away any secrets, but maybe you’ll make a mistake. Stick to weather, sports, family – anything but business.
• Let The Other Side Do The Talking: Even better than you talking is getting the other side to talk, and talk, and talk. Just as you can leak power to the other side, the more they talk the better the odds that they will say something that will give you more negotiating power.
• Keep Your Timeline A Secret: At the end of a fiscal quarter, negotiating with a salesperson who has already met his / her quota is completely different from negotiating with one who hasn’t. If you are this salesperson, don’t let the other side know where you stand – also don’t mention if business has been slow, or if you’ve got product piling up all over the place.
• Don’t Start With Discounts: All too often salespeople will start a sales negotiation that they are anxious to close by offering a discount or some other enticement to the other side right off the bat. Don’t do this – although it might have worked in some other negotiation, if you start this way then the other side won’t see the value in your offer and you will have lost power even before the negotiations have begun.
• Tell Everyone On Your Team To Shut-Up!: Even if this discussion sinks in to your brain, you can still lose power by comments that the engineers, procurement staff, and even the lawyers on your team make. Take the time BEFORE the sales negotiation begins to huddle with your team and explain to them that the more they talk, the more negotiating power they will be giving away to the other side.

Final Thoughts

Things that we can’t see are hard for most of us to get our hands around. Power in a sales negotiation is one of these things – it can be hard to tell how much of it you have and if you’ve lost some of it. Remembering to keep your mouth closed and working with your team to make sure that they do the same thing will allow you to close better deals and close them quicker.

Questions For You

Have you ever been in a sales negotiation when the other side revealed something that gave you power? Have you ever made a slip and given power to the other side because of something that you said? Has your team ever said something that weakened your position? Leave me a comment and let me know what you are thinking. Click here to get automatic updates when The Accidental Negotiator Blog is updated.

What We’ll Be Talking About Next Time

People are either honest or they aren’t right? Umm, well not exactly. Look, in a sales negotiation everything is not as it seems. I hate to use strong words like “lying” or anything like that, but let’s just say that a healthy dose of skepticism is often a sales negotiator’s best friend…

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Post tags: art of negotiation, bargaining power, buy, buyer, communication, communications, deals, discount, how to deal, how to negotiate, how to negotiation, negotiate with, negotiating, negotiating power, negotiation, negotiations, planning, power, sale, sales, salesman, salesperson, satisfaction, slip of the tongue, strategy, success, talking, team

Sales Negotiators Who Have Authority Limits Can Use This To Their Advantage

Do you run the world yet? I’m going to guess that the answer is no (if it isn’t, then we need to talk). When we talk about being successful in a sales negotiation, we often spend a lot of time trying to figure out how we can get more negotiating power on our side. However, sometimes NOT having negotiating power can work to our benefit…

If you are in charge, then the other side can always pressure you to make a decision because they know that you are the ultimate decision making authority. However, if you don’t have the ability to make the final decision, if you instead have limited authority, then there can be a number of benefits:

1. Gives you the ability to say no gracefully if needed.
2. Gives you room to back off and assess your position.
3. Give you the ability to go check with experts.
4. Give you the right to review the evidence.
5. Give you the ability to take the time to look for mistakes.
6. Gives you the time that you need to read the fine print.
7. Gives you the ability to bring up undefined questions.
8. Gives you the ability to write a better argument.
9. Gives you the right to coordinate the decision.
10. Gives you the ability to move the negotiation away from an unacceptable position.

As you can see from this list, what some would see as disadvantages during a negotiation can also be seen as advantages. Keep in mind that it’s really how you make use of something that determines if it is an advantage or a disadvantage.

The negotiation experts are often split when it comes to what types of limits on authority are more valuable than others. However, Dr. Karrass believes that  the best kind of limits on your authority are statutory or administrative limits. The other side will quickly understand that you are faced with these types of limits and in fact may enter the negations with the expectations that you have these limits.

Next in line comes dollar limits (managers can sign off on so much, Directors so much more, and VPs even more). The other side may be least receptive to hearing that you are dealing with people limits because these often seem to be things that you should be able to work through.

One thing that you are going to have to keep in mind is just how willing the other side is going to be to deal with you despite the limits on your authority. You may find that corporate policy limits are the ones that cause the most problems during a negotiation because they can be the most difficult limits to either change or circumvent.

There are a great number of different types of authority limits that you may be faced with during any given negotiation. The specific details of the negotiation will define the limits that are placed on you. No matter what limits are present, they can generally be placed in one or more common “buckets”:

• Money limits
• Term limits
• Policy limits
• Legal limits
• Design limits
• Group approval limits

In the end, when you find yourself in a negotiation with a number of limits placed on you, take a moment to understand how you can use these limits to boost your negotiating power.

Have you entered a sales negotiation with limits on your authority? Did you see this as a disadvantage or as an advantage? How did that negotiation turn out? Leave me a comment and let me know what you are thinking.

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Post tags: authority, deals, how to deal, how to negotiate, limits, money, negotiating, negotiating sales, negotiating skills, negotiation, negotiation skills, negotiations, power, price

So you want to sell something (perhaps yourself for a new job?) and you feel that the other side (the buyer) has all the power. Ok, you’re right – just give up and stop reading right now.

Hmm, you’re still reading. Perhaps although it looks like the buyer has all the power, this really is not the case. Let’s take a careful look at what is really going on here and perhaps we can boost your self confidence just a bit.

First a quick review is probably called for. In negotiating, power is all in your head. We imagine that there are many sources of power and they can be based on resources, regulations, laws, or even psychological factors. In the end, we all have different views of just exactly what power means. Most of these views only exist in our heads and they form a critical part of what can be called our inner reality.

Given all that, what can we as a seller in a negotiation do to minimize the buyer’s power while maximizing our own? Let’s take a look at common sources of power and see how we can gain the upper hand:

• Organizational Time: the buyer may be under the gun because he/she needs what we have to sell in order to meet a demand that his organization is putting on him: “Fill that position NOW!”

• Personal Time: the buyer may have poor time management skills and has painted himself into a corner so that he needs to make a purchase NOW!
• Specifications: the product that you are offering (yes, even if it’s just you) may be the only one that fits the requirements that he’s trying to fill.
• Location: the closer your product is to where the customer needs it to be the better.
• Re-Validation: does the buyer have the time/energy/budget to re-validate another supplier if he doesn’t select your product?
• Warranty: does your product come with a better warranty than any other offers that the buyer has?

In any negotiating situation not all of these sources of power are going to be valid. However, I’m willing to bet you that at least some of them will be. If you spend just a bit of time thinking about it before you enter into a situation where you are going to be selling something, I think that you’ll find that you really have much more power than you thought that you did!

Tags: sales, deals, buyer, power, planning

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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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