Posts Tagged ‘power’

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Do We Really Need To Negotiate If We’re Going To Be Partners?

Friday, March 5th, 2010
Image Credit Sure You’re In Love Now, But What About Later On?

Sure You’re In Love Now, But What About Later On?

Welcome To The Age Of Partnering

Remember when every business used to view themselves as an island? This made life pretty simple for anyone doing sales negotiations – it was always us vs. them. Well, it sure looks like someone farther up the corporate ladder has been reading those business self-help books and they’ve decided that there is a better way to go about doing things: partnering.

Why Does Becoming A Partner Make Life So Difficult?

So just what is a partner? In simple terms (and it can get a lot more complicated if you let it), a partner is another company with which your company has decided to form a special, deeper, relationship. For a sales negotiator, this new type of relationship can complicate our lives immensely.

Before partnering came along, you had a great deal more latitude in how you conducted a negotiation: simply put, you really didn’t care that much about the other side of the table – you just wanted the best deal for your company. Partnering changes all of this.

The key here is to view a partnership as a bonding of two companies together (dare I say “marriage”? ) This is much different from a simple long-term partnership where you treat the other firm nicely, but you know that it’s not going to last (perhaps “dating” would be the right word here).

What Role Does Win-Win Negotiating Play In A Partnership?

One of the biggest changes that a partnership brings about in the life of a sales negotiator is the arrival (with a “thud”) of win-win negotiating. Instead of having the latitude to walk away from a deal with a partner, you’re pretty much expected to be able to reach an agreement with them. After all, they are a partner, right?

What this means is that the clever sales negotiator (you) now needs to use win-win negotiating techniques to find more things to negotiate about. The more discussion points that you can put on the table, the better your chances are that you’ll be able to craft a deal with your partner.

One important point that often gets overlooked when sales negotiators start to use win-win techniques with partners is that this does not mean that everything gets shared equally. Instead, what it really means is that everyone walks away feeling satisfied – one side may get 60% and the other may get 40%, but everyone feels as though they got what they needed.

Oh Yeah, That Power Thing

Power is a big part of any negotiation – who has it, how much of it they have, and how you can get more of it. You need to realize that just as in the fact that win-win deals don’t mean that everything is shared, the balance of power will always be unequal.

How much power you have often flows from how much information you have about the other side (your partner), and how much information they have about you. Since it’s a partnership, both of you will know more about each other than most parties involved in a standard negotiation would.

Since you know that you will be negotiating with your partner, as a sales negotiator you have a responsibility to make sure that others in your company don’t end up giving all of your negotiating power away. Sure openness is a good thing, but let’s not take it too far.

What All Of This Means For You

The role of a sales negotiator has become more complicated with the arrival of business partnerships. What use to be a relatively simple process of going into a negotiation with the goal of only improving your company’s position has now been changed.

In order to look out for a partner’s wellness during a negotiation, win-win techniques need to be used. This brings up more complicated issues surrounding what makes a deal fair for both parties and just how to make sure that you retain your negotiating power.

Business partnering is not going away. Sales negotiators need to accept this fact and adjust how we go about negotiating with this new type of opponent / adversary / other side of the table. If we can find ways to create deals that fully benefit both sides of the table both today and tomorrow, then we will have come to terms with the brave new world of partnerships.

Question for you: Do you think that negotiating with a bsiness partner is easier or harder than any other type of sales negotiation?

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What We’ll Be Talking About Next Time

So there you are, all ready to start another sales negotiation. Hold on a minute, are you really ready? Maybe you’ve overlooked the most important point of all – setting your target for the negotiation.

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3 Rules Of Negotiating Power That You Need To Know

Tuesday, December 8th, 2009
Image Credit The 3 Rules Of Power In Negotiations Require You To Be Cautious

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.

Click here to get automatic updates when The Accidental Negotiator Blog is updated.

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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Hidden Needs Drive Sales Negotiations

Tuesday, September 15th, 2009

Hidden Needs Can Get 'Ya In Sales Negotiations <p> (c) - 2006 </p>

Hidden Needs Can Get 'Ya In Sales Negotiations (c) - 2006

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.

It’s What Lies Below The Surface That Really Matters

When we enter into a sales negotiation, we like to kid ourselves that we know what the other side is looking to get out of the negotiation. At least on the surface, all sales negotiations look the same.

The easy-to-see desires of the other side generally come down to one of three things: money, goods, and / or services. This is what we can see and this is what we spend our time preparing to negotiate. However, that’s really only part of the story.

Knowledge Of Hidden Needs Boosts Your Power

I’m sure that you’re probably already agreeing with me that knowing the other side of the table’s hidden needs would be advantageous when you are getting ready to negotiate. However, did you know that this knowledge will increase your negotiating power?

Remember that power in a sales negotiation is a difficult thing to nail down. However, the more that you know about the other side and their hidden needs, then the more negotiating power you’ll have.

The Search For Hidden Needs

If we can all agree that identifying the other side’s hidden needs is a good thing, than all that is left for us to talk about is just exactly HOW you can go about doing that. The key is to have a good set of questions.

These are the questions that you need to ask yourself BEFORE you enter into a sales negotiation. Not every question will pertain to this specific negotiation and your list will evolve over time. Here’s a good set of questions for you to start asking yourself:

  • Do they want to make their lives easier?
  • Do they want to appear to be competent?
  • Do they want peace of mind?
  • Do they want to be listened to?
  • Do they want freedom of choice?
  • Do they want to keep their job?
  • Do they want recognition?
  • Do they want to be liked?

Final Thoughts

As you enter into a sales negotiation, you need to realize that the other side of the table probably has more hidden needs than they have publicly known needs. What this means for you is that the other side of the table won’t say “yes” to your requests until after at least some of their hidden wants have been fulfilled.

In the end, all negotiating is about making sure that you have enough power to be successful. One of the most important keys is to realize that we need to also address the other side of the table’s hidden needs in order reach an agreement that both sides can live with.

If you can learn to spot these hidden needs before you enter into your next negotiation, then you will be able to close better deals and close them quicker.

Click here to get automatic updates when The Accidental Negotiator Blog is updated.

What We’ll Be Talking About Next Time

Time after time the same weakness shows up in my clients. No matter how confident they may feel about a negotiation or how much research they’ve done going in, the issue of available time seems to trip them up over and over again.

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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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