Archive for the ‘power’ Category

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Shut-Up Is What Sales Negotiators Need To Learn To Do!

Tuesday, June 30th, 2009

Sales Negotiators Need To Learn To Just Keep Their Mouth Shut!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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Sales Negotiators Should Always Have Limited Authority – Or Else!

Tuesday, February 24th, 2009

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

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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Make More Sales: Understanding Buyer Power & What To Do About It

Friday, July 25th, 2008

Learn how to minimize buyer power and maximize seller power

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!

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Posted in buyer, deals, planning, power, sales | 1 Comment »

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.

Posted in authority, mental preparation, negotiating, power, price, wrong assumptions | No Comments »

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