Posts Tagged ‘sales negotiation’

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

Friday, March 5th, 2010

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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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10 Ways To Quickly Boost Your Power In ANY Negotiation

Tuesday, November 10th, 2009
Image Credit In A Negotiation, Power Is What We All Want To Have The Most Of...

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?

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

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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5 Ways The Great Sales Negotiators Build Super Bargaining Power

Tuesday, November 3rd, 2009
Image Credit How You Dress Can Impact Your Bargaining Power...

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

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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How To Play (& Win) When There’s Only One Game In Town

Tuesday, October 27th, 2009
Image CreditSole-Source Suppliers Pose A Special Problem For Negotiators

Sole-Source Suppliers Pose A Special Problem For Negotiators

Having a single supplier for something that you want is the best thing in the world. “What?” you say, they’ve got me over a barrel , they can dictate any price or any conditions on a deal that they want because I have no other alternative.

Well, ok, that’s one way to look at it if you want to be all negative and such. However, there’s a different way to see things and when you look at the situation this way you’ll see that it’s you who has them over a barrel. Let me explain.

How’d You Get Into This Situation?

When we are starting a project, creating a new product, or we just find something that we just HAVE TO have, we can suddenly discover a big BLAM! This occurs when there is some component of our plan that is controlled by someone else. When that thing is the ONE thing that we must have to make our plan succeed. They are a sole supplier. Sure looks like we’re in a bind here.

Options, Options, Options

The first thing that you need to realize is that you are only in a pickle if you think that you are. This type of situation calls for some problem solving. What’s the one thing that all sales negotiators know: it’s all about power , the more that you have, the better the outcome of the sales negotiation will be for you. Feeling powerless is not a good way to start any negotiating relationship!

You always have what I like to refer to as the “nuclear option”. What this means is that if you can’t reach an agreement with the person who has control over the one thing that you need, then you can always chose option B: “make” your own.

In business this could mean that you’d set up a factory to make your own version of whatever part the supplier is controlling. In your personal life, if the seller of the house that you just must have won’t sell to you at a reasonable price, then you can always go out and build your own house that looks just like his.

Build Your Own Competition

Although there may not be other sources for the thing that you want, another option that you can bring to the table is to create competition between the supplier and himself. You’ve got to realize that he’s got both short term and long term goals.

You’ve actually got a lot of control over the deal. You can control how much you are willing to buy, when you’ll take delivery of it, and (most importantly) when you’ll pay and in what amounts you’ll pay. Both pre-paying and delaying payments can have a significant impact on the other side’s tax situation, etc. and you hold the keys to when this will happen.

Creating A Second Source

Negotiation tactics can be used to give you more negotiating power in a single supplier situation like this. One such tactic is to actively create a second supplier. Even if such a supplier does not currently exist, you can approach a potential firm and find out if the offer of some or all of your business would motivate them to become a supplier of the needed item.

If you are able to convince them to do this, then you will have created true competition. However, you will need to make sure that you don’t get locked into this second supplier as your only source of the item!

What This All Means For You

The worst thing in the world that can happen to a sales negotiator is that you find yourself in a negotiation where you have no negotiating power. In a situation like this you’ll end up just having to agree to whatever the other side proposes.

However, you should realize that no negotiation ever has to be like this. Instead, you have to realize that you always have options. Even in a situation where you need to have something that someone else controls, you still have options. You can always choose to build your own option, you can cause the other side to compete with themselves, or you can go out and work with another supplier to create true competition.

No matter how you choose to handle it, you will have taken some of the power that seemed to all start on the other side of the table and then you were able to bring it over to your side. Now doesn’t that make you happier?

What do you think the best way to handle a sole source vendor is in order to prevent them from taking advantage of you?

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

What We’ll Be Talking About Next Time

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…

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Posted in buyer | 1 Comment »

How To Win A Race When You’re Not The Fastest Runner

Tuesday, October 20th, 2009
Photo CreditYou Can Still Win The Race Even When There Are Other Runners...

You Can Still Win The Race Even When There Are Other Runners...

Sales negotiators are often our own worst enemies. So much of what it takes to have a successful negotiation depends on your mental state going into the negotiation that if you don’t believe that you can close this deal, then I’ve got some bad news for you – you probably won’t.

One situation that my students seem to struggle with over and over again is the case where it’s them and a whole bunch of other companies all trying to get the same deal. The other companies appear to be prettier, smarter, and all around better: what chance do any of us have against them?

The Many Going After One Challenge

This is arguably the classic negotiating challenge. We see this all the time in real life when we want to buy a house that someone else also wants to buy or we want something on eBay that lots of other people want (and are willing to pay more to get). When the other side of the table is a single party and our side of the table is packed with us and our competitors, it can get to be a little bit disheartening.

The thing that I tell my students to remember is that things are never as they look. When you are in a highly competitive situation, it’s all too easy to look around and start to lose hope because you see how many other people want the same thing that you do: there can only be one winner. What you are missing here is that no matter how shiny they all look on the outside, the number of parties that you are actually competing against is really very small.

Why You Actually Have A Good Chance Of Winning The Deal

So here’s the deal. When you are going after a deal and there are a lot of other firms doing the same thing, you should not worry too much about them. The reason is that despite their numbers, the actual number of firms that you’ll be competing against is relatively small. Here’s why:

  • People at the other side of the table may not like a firm for some reason and so their offer won’t be considered.
  • A firm’s past history with the other side of the table (missed deliveries, poor quality, etc.) may make its offer be rejected.
  • Size of the firm: perhaps it’s too big for the job or maybe it’s too small to pull it off.
  • Product Features: many times a competitor’s solution may do more than yours, but the other side of the tale doesn’t value those features so their price will be too high.
  • No pricing: amazingly enough, sometimes a firm won’t be able to get through all of its internal hoops in time to be able to deliver a price.
  • Unknown firm: if the other side of the table doesn’t know a firm, that is have an existing relationship with them, then they may reject doing business with them.
  • Financial trouble: some competitors may be having money troubles that mean that nobody is going to risk doing business with them.

Final Thoughts

Having the confidence that you’ll be able to close a deal is critical to being a successful negotiator. Often it will be you against the world as you attempt to be the one that the other side of the table selects. In these cases it can be all too easy to lose heart, the other firms may look as though they are better positioned to win than you are.

However, you’ve got to realize that appearances can be deceiving. Many of the other firms will fall by the wayside for one or more reasons that may not be obvious to you. Once you realize this, you should become more confidant in your ability to strike a deal.

Having this knowledge will prevent you from automatically providing concessions to the other side during your negotiations. These concessions may not be needed because much of the competition will not truly be considered. Once you know this, you should be able to strike better deals and do it quicker.

What do you think is the best way to determine who your real competitors in a negotiation are?

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

What We’ll Be Talking About Next Time

Having a single supplier for something that you want is the best thing in the world. “What?” you say, they’ve got me over a barrel,  they can dictate any price or any conditions on a deal that they want because I have no other alternative…

Tags: , , , , , , , , , , , , , , , , ,
Posted in competition | No Comments »

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