Posts Tagged ‘concession’

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How Sales Negotiators Can Defend Against The Good Cop / Bad Cop Tactic

Tuesday, March 10th, 2009
Sales Negotiators Need To Have A Defense Against The Good Cop / Bad Cop Tactic

Sales Negotiators Need To Have A Defense Against The Good Cop / Bad Cop Tactic

I like movies. I especially like police movies. I’m guessing that one of the reasons that I like movies with police in them so much is because it’s almost a given that sometime during the movie the police heroes will resort to using the “Good Cop / Bad Cop” negotiating tactic. Every sales negotiator out there should be smiling right about now…

I guess I should take just a moment and make sure that we’re all on the same page here. The Good Cop / Bad Cop tactic is a decoy tactic and here’s how it works. The other side has at least two people. One takes a hard line and makes unreasonable demands on you. He / she also appears to be unyielding – you’ll get no concessions from them. The other person is much nicer. He / she is willing to be your friend, is a little embarrassed about his / her partner’s hard stand, and just wants to work with you to reach a deal.

Umm, the key thing to realize here is that you’re being presented with a show: both of these people are working together. They hoping to get as much out of you as possible. The goal is to get you to believe that you were lucky to get as much as you did considering just how tough the “bad cop” was.

So what’s a sales negotiator to do when you come up against a good cop / bad cop team? There are some simple ways to deal with the bad cop:

  1. Let the bad cop talk and talk. In many cases his / her own side of the table will end up getting fed up with them.
  2. Hit the big red button and complain to your / their higher authority.
  3. Leave! (This always gets their attention)
  4. Turn the tables and in public put the blame on the other side of the table for the failure to make more progress in the negotiations.
  5. Bring your own good cop / bad cop to the table.

Have you ever encountered a good cop / bad cop team when you’ve been negotiating a sale? How bad was the bad cop? How good was the good cop? How did you counter this tactic? Did the tactic work on you? Leave me a comment and let me know what you are thinking.

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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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Classic Sales Negotiation Tactic: I’ve Got To Talk To My Boss…

Tuesday, February 17th, 2009
The Escalating Authority Sales Tactic Is Crude But Often Works

The Escalating Authority Sales Tactic Is Crude But Often Works

Picture this scene: it was about 20 years ago (ouch!) and I was still dating my wife when she suddenly had to replace her car. She knew exactly what she wanted: a Honda Civic with a manual transmission. There was a local Honda dealer near where she lived so one evening we went there to have a talk about buying a car.

The salesman that we talked with was the “older guy who reminds you of your uncle” variety. I had an opportunity to sit back and watch my soon-to-be-my-wife bargain with him over the price. She started low, he started high, and after a bit of back-and-forth, they were still fairly far apart. Now my bride-to-be had done her homework and had called a bank to find out how much this car was really worth (20 years ago = no real Internet). So she knew what the correct outcome of this sales negotiation needed to be.

The salesman that we were dealing with looked at the gap in offered / accepted prices and said, of course, “are you sure that you can’t do any better than this”. When my girlfriend said “No”. He then said “I’m going to have to go talk with my boss about this…” And off he went.

Returning about 10 minutes later, he had a slightly lower price, but still the gulf between what my girlfriend was willing to pay and his new lower price was great. TWO MORE TIMES HE WENT BACK TO TALK WITH HIS BOSS. I couldn’t believe this – I was watching a classic Greek play being staged before my very eyes. At any rate, my girlfriend got the price that she was asking for in the end after about 90 minutes of haggling. What was going on here?

I didn’t know the name of this sales negotiation tactic at the time, but I do now. It’s called the “Escalating Authority” tactic. This tactic uses the need to have a deal approved by a reluctant higher authority in order to gain more concessions from the other side of the table.

This tactic is used by salespeople all the time. The reason that they use it is because it often works. Here’s what a salesperson can expect to get out of using the “Escalating Authority” tactic:

  • Helps to lower the other side’s expectations.
  • Causes the other side’s arguments to come out early instead of later.
  • May cause conflict within the other side’s negotiating team.
  • Causes the other side to state their negotiating demands earlier.
  • Just physically wears the other side down.
  • May end up lowering the self-confidence of the other side.
  • Uses up the other side’s valuable time.

The party that this tactic is being used on is not without defenses. There are several counter measures that can be put in place in order to diminish or eliminate the effectiveness of this sales negotiation tactic:

  • Match the other side: bring your higher level people to the table when they say that they need to go to their higher level people.
  • Walk out.
  • Bypass the other side of the table and go directly to their senior management.
  • Manage the expectations of a quick resolution on your side of the table.
  • Communicate to your side of the table what tactic is being used against you and let them know that one of its goals is to lower their expectations for the outcome of this sales negotiation.
  • Don’t repeat yourself. Force the other side of the table to relay all that you have said to each higher level of their management.

In the end, the Escalating Authority tactic is a fairly crude negotiating tool that is used most often by amateur negotiators. It can be countered easily and effectively. Keep your eyes open and make sure that you spot it when someone starts to use it on you – the best Escalating Authority tacic defense is a good offense!

Have you ever had the Escalating Authority tactic used on you during a negotiation? How did you respond to it? In the end was it successful? Have you ever had a chance to use it during a negotiation? Leave me a comment and let me know what you are thinking.

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A Sales Negotiator’s Guide To Dealing With A Deadlock

Tuesday, February 10th, 2009
A Deadlock During A Negotiation Can Bring Things To A Screeching Halt

A Deadlock During A Negotiation Can Bring Things To A Screeching Halt

When driving a car, the #1 thing that most of us fear is hitting a wall. Or another car. Or pretty much anything that would cause us to come to a complete stop quickly. Why are we so afraid of this? Well duh – it will damage / destroy the car that we’re in, delay or prevent us from getting to where we want to go, and may even result in damage to us. The same thing can happen during a negotiation, but we call it a deadlock.

A deadlock occurs when both sides have not yet reached an agreement and all of a sudden they reach an issue that they fundamentally cannot agree on. If negotiating was a board game, then there would be no possible moves for either side to take – deadlock.

If you are a negative person you might be willing to give up and walk away. Lots of people do. A deadlock is a powerful thing and it can affect both sides of the the negotiating table in the following ways:

  • A deadlock tests the resolve and the strength of both sides.
  • A deadlock often forces both sides to be willing to give more concessions after it occurs.
  • A deadlock is a signal to both sides of the table that what they want out of the negotiation might not be possible.
  • A deadlock can cause both sides to reduce what they expect to get out of the negotiations.
  • A deadlock can mess up schedules for both sides.
  • A deadlock can make a negotiation more expensive and riskier for both sides.

So this all seems like it’s pretty serious stuff. However, there’s more.

Both sides of a negotiation realize going in that a deadlock can occur. The key thing that you as a negotiator need to determine is which side fears a deadlock more. Generally speaking, the larger an organization is and the more layers that it has in its management structure, the less able it is to deal with a deadlock. If you are willing to risk not walking away with a deal, then your negotiating power may be greater than the other side’s.

No matter how much power you think that you have, what every negotiator needs to realize is that when a deadlock occurs during a negotiation, it’s the negotiators responsibility to find a way to resolve it. A deadlock can have a significant impact on a negotiator’s career in the following ways:

  • You may get criticized by your own management.
  • You may end up getting extra work in order to resolve this deadlock.
  • You may lose your job.
  • You may have a personal sense of failure.
  • You may become frustrated.
  • You may lose friends and damage relationships.
  • You may make people angry with you.
  • You may lose self-confidence.
  • You may start to question your own business judgment.

So there is a lot of personal risk going on here. What’s a negotiator to do? One key action that you can take occurs before the negotiations start. Every negotiation is really a team event – it’s not just you sitting on your side of the table, it’s really you, your team,  and your management structure. If you take the time to discuss the possibility of deadlocks, what might cause them, where in the negotiations they might occur, and how best to deal with them then you’ll avoid a lot of the consternation that a deadlock can cause your team.

One final point – don’t give up just because you encounter a deadlock. In fact, the longer that the negotiations have gone on before the deadlock was encountered, the better your chances of being able to restart the discussions are. The more effort that has gone into the negotiations will mean that neither side wants to let a deadlock stop progress from being made…

Have you ever encountered a deadlock during a negotiation? Did this cause the negotiations to stop? What did you do to try to restart the negotiations? Were you successful? Leave me a comment and let me know what you are thinking.

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A Negotiator’s Best Friend: Time To Think

Thursday, January 29th, 2009
Negotiators Need To Develop Patience In Order To Be Successful

Negotiators Need To Develop Patience In Order To Be Successful

Quick – what is the most important characteristic of a negotiator? Sorry, that was a trick question – there are a number of correct possible answers. However, one trait that needs to be on that list is patience. Although being an American can often be an great asset, in negotiations sometimes it can be a hindrance because we are impatient!

So what is patience? In short it’s the ability to wait, the ability to not rush to a conclusion. Although this can be very difficult to do, it is a trait well worth developing. With patience you can cause the following things to happen:

  1. Get the other side to grant concession after concession.
  2. Discover new issues that need to be negotiated.
  3. Cause the other side to have internal divisions.
  4. Cause the other side to redefine their objectives.
  5. Provide time for both sides to accept new ideas.

So if we can all agree that patience is a good thing for a negotiator to have, the big question that comes up right off the bat is just how does one develop patience? Since pressure and patience are so closely linked, the ability to develop patience often comes down to how your organization works.

In order to build patience, here is what you need to do:

  1. You need to make sure that you have made sure that everyone on you negotiating team is made aware of the value of patience.
  2. You need to take the time to plan ahead.
  3. Get an inch, when you really need a yard. Time is something that you can always use – buy yourself more whenever you have an opportunity.
  4. Establish milestones that are future based so that everyone has the same view of the future.
  5. Manage the expectations of upper management so that pressure on the negotiating team is minimized as much as possible.

Speaking of upper management, as with all negotiating tactics, patience has two sides to it. Your upper management will be well aware that too much patience may result in the negotiating never reaching a conclusion.

Given the way the world works, there is a good chance that you’ll encounter a situation in which the other side of the table starts to use patience as a tactic against you! In these situations, there are several ways to defend yourself:

  1. Internally understand that his using patience may turn out to make things tougher on the other side than on you.
  2. Set a deadline in order to negate the other side’s use of patience.
  3. React by making sure that you are relaxed and make yourself comfortable.
  4. Prepare your internal team for a long march (also make sure that your senior management does not expect immediate results).
  5. Develop a strategy that will send signals to the other side that let’s them know that patience won’t work out for them.
  6. Make patience both costly and risky for the other side.
  7. Walk out!

Using simple patience is a tatic that is often overlooked in today’s go-go business environment. That’s one of the reasons that it can work so well! Make sure that you communicate the importance of patience to your entire negotiating team and you’ll be well positioned to do well during your next negotiation.

Have you ever used patience as a negoitiating tool? Was it successful? Has the other side ever used patience as a tool against you?  How did you react? Leave me a comment and let me know what you are thinking.

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