Posts Tagged ‘negotiator’

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A Sales Negotiator’s Friend: “Just The Facts, M’am”

Tuesday, March 17th, 2009
Sales Negotiators Should Not Be Afraid Of Facts & Stats - They Are Just Here To Help!

Sales Negotiators Should Not Be Afraid Of Facts & Stats - They Are Just Here To Help!

So there you are, getting ready to fire up your side of a sales deal when all of a sudden you get hit with a volley of facts, averages, and statistics. You’re hit! Each one of those figures came with a sharp point that has embedded itself, perhaps fatally, into your arguments. Is there any way that you can survive?

Good news, the answer is yes. It turns out that these powerful negotiating weapons: facts, averages, and statistics are ALWAYS negotiable. We have trial lawyers to thank for showing us the way. The key here is not to argue with the numbers themselves, but rather dispute what lies behind the numbers.

Questions that a good salesperson will ask right off the bat after being attacked with numbers include:

  1. Who collected these numbers?
  2. What sources did they use to get the numbers?
  3. What techniques did they use to collect the numbers?
  4. Were there any assumptions used when collecting the numbers?
  5. Why were the numbers collected in the first place?
  6. What values were hidden behind the numbers?
  7. Were there any biases that might have influenced the collection?

A key point to always remember is that any facts, statistics, or averages are always based on things that have happened in the past. What you are in the process of trying to do is to negotiate a deal that will live in the future.

One final point is to not allow yourself to get too worried by statistics or averages. They are just ways of trying to be able to talk about large amounts of data. The most important thing to remember here is that by their very definition, statistics and averages really don’t apply to anyone including you.

Have you ever been trying to work a deal when the other side suddenly whipped out a bunch of numbers? What was your reaction? What did you do next? Did the numbers end up influencing how the deal came out? Leave me a comment and let me know what you are thinking.

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Posted in information gathering | 4 Comments »

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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Posted in how to negotiate | 4 Comments »

Negotiation Battle: Tom Hanks vs. Mel Gibson

Thursday, February 5th, 2009
The SAG And The Studios Are Deadlocked In Their Negations, Now What?

The SAG And The Studios Are Deadlocked In Their Negations, Now What?

In the world of Hollywood, they have the ability to make the unreal seem oh so real. However, right now they are having a great deal of difficulty negotiating to make a contract between the big movie studios and the Screen Actors Guild (SAG) become a reality. Are we going to be looking at another actors strike?

Perhaps a bit of a background is needed here. The SAG is a 120,000 member union that represents, what else, actors. The SAG is currently negotiating with the major studios to create a new contract for its members – their old contact ran out back in June.

This type of negotiation is fairly common. However, what’s making it interesting this time around is that there appears to be a difference in opinion on how best to negotiate within the SAG. This is causing a split to occur and may be significantly reducing the SAG’s negotiating power.

Within the SAG there are two groups that are taking differing views of how the negotiations need to proceed. The first group, called Members First,  is lead by the SAG’s president Alan Rosenberg and their Executive Director Doug Allen. Doug also happens to be the SAG’s chief negotiator. The second group calls itself Unite for Strength and has won several key seats on the board and now, by aligning with other board members,  has a slight majority.

So what’s the issue here?

Currently the SAG is in deadlock in their negotiations with the big studios. The Members First team wants to have the SAG members vote to authorize a strike if the negotiating team needs to call one. The Unite for Strength team wants the board to vote against having a strike vote as well as having them replace the current negotiating team. Talk about bad blood!

If the Unite for Strength team got their way, then they would probably try to jump-start the stalled negotiations with the studios. They would go along with the pay terms for new media that other unions have negotiated with the studios as  an exchange for getting improvements in the traditional media pay areas.

Why does the Unite for Strength team not want a strike vote to be taken? They believe that a strike now would be a poor decision based on the current economic state of the country.

Tom Hanks supports the Unite for Strength team. Mel Gibson supports the Members First team.

Just to make things a bit more complicated, the studios are insisting that their current offer on the table is their final offer. It contains some provisions that no SAG members likes such as a proposal to eliminate mandatory meal times (I mean come on, an actor has got to eat…)

So what should a negotiator make of all of this back-and-forth?

First, the public SAG split is bad news for the actors because it transfers power to the studios. When the other side of the table is in disagreement, your position is stronger. However, this also means that reaching an agreement with the SAG will be more difficult – the studios need to get all of the SAG to agree to a new contract.

It looks like SAG has done a poor job of PLANNING their side of the negotiation. There is a critical question of what is more important: money from traditional (films, TV) media or money from new (DVD, Web) media. Pick your poison, but this is an issue that all of the SAG needs to get behind.

Both sides of the table are at fault for allowing the deadlock to continue for six months. One subtle point here is that the studios may be willing to live with a deadlock because there is no current threat of a strike and the longer they wait, the greater the split within the SAG grows.

If the SAG replaces their negotiating team, then there will be a great deal of negotiating ground that will need to be revisited as the two negotiating teams meet for the first time and work out their negotiating positions.

What’s to be learned from this negotiating mess? A couple of key points: negotiations need to be planned out before discussions start so that inter-team squabbling can be taken care of BEFORE the talks start. Next, replacing a negotiating team during negotiations is a radical step that should be avoided at all costs – it’s just too expensive in terms of time. There’s a lot more to learn here, but I’m pretty sure that time will reveal what mistakes were made and which side ended up with more negotiating power…

If you were a member of the SAG, which team would you want to be a part of (the Tom Hanks team or the Mel Gibson team)? Who do you think has the stronger position in the negotiations right now? What would your next steps be if you were the studios? Leave me a comment and let me know what you are thinking.

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Posted in strike | 13 Comments »

Deadline? We Don’t Need No Stinkin Deadline…

Tuesday, February 3rd, 2009
Deadlines Show Up During Negotiations, But Are They Real?

Deadlines Show Up During Negotiations, But Are They Real?

What would the world of negotiating be without deadlines? I can tell you that Hollywood movies would lose a lot of their plot if the bad guys couldn’t set impossible deadlines for our heroes to try to meet. What about real life – why do people use deadlines while negotiating?

It’s actually pretty simple, a deadline is an effective communication tool. Deadlines can be used by either side to apply pressure to the other side and force them to make a choice. If the party that’s under pressure chooses to accept the deadline, then the deal will be done. Otherwise, who knows?

You see, the trick with deadlines is that when you are presented with one you can never be quite sure that it’s real. In the game of poker this is called bluffing. The one thing that we do know about a deadline is that if we accept it, everything will be resolved. However, there will always be that unanswered question as to what would have happened if we had not met the deadline…

One solid piece of advice is given by experienced negotiators: always be skeptical of any deadline that you encounter during a negotiation. These types of fixed time limits have a tendency to come and go.

Now having said this, you also have to realize that in real life sometimes a deadline is real. If you choose to not meet it, then you are running the very real risk that this may kill the deal once and for all.

In order to help you see your way through the deadline maze, here are three questions that you need to ask yourself anytime that you encounter a deadline during a negotiation:

  1. For The Other Side: what deadlines do you know about that the other side has to live with? Do you know what will happen if they miss their deadlines?
  2. For You: what deadlines have been placed on me by either my team, my organization, or myself? Will these deadlines limit how effective I can be during this negotiation?
  3. Renegotiation: Is is possible for my team to renegotiate any of the deadlines that have been placed on us by our own people? Who says that we can or cannot?

As much as we all dread having the other side throw a deadline at us, we need to remember that deadlines are an effective tool that we have in our own bag of tricks. Studies of negotiations have been done and they have revealed that deadlines do one thing very well – they force the other side to make a decision.

All too often in a negotiation, things can be dragging on for too long. If you find yourself in this situation where the other side appears to be resisting making up their minds, then perhaps a deadline is called for.

This type of situation often shows up when the other side is faced with an especially difficult decision. They will drag their feet longer in order to avoid having to make up their mind. If you can convey to them that there is a sense of legitimacy to your deadline, then you can use this powerful tool to close the deal faster.

Have you ever been presented with a deadline during a negotiation? Were you able to determine if it was a real deadline? Did you meet the deadline or did you skip it? What happened then? Leave me a comment and let me know what you are thinking.

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Posted in tactic | 1 Comment »

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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Posted in tactic | 1 Comment »

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