Sales and Sales Management Blog

July 21, 2009

Boost Your Sales: “Power, Power, Who’s Got The Power In A Sales Negotiation?” by Dr. Jim Anderson


Power, Power, Who’s Got The Power In A Sales Negotiation?
by Dr. Jim Anderson

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.

Final Thoughts
Our goal for every negotiation that we enter into is that we’ll 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.

Dr. Jim Anderson has spent over 20 years negotiating everything from small sales with individual owners of companies to large scale military project contracts with teams of sales negotiators. In his popular blog, “The Accidental Negotiator Blog” and his website The Accidental Negotiator Dr. Anderson offers his insights on how to develop your sales negotiating skills so that you can close more deals, make more money, and have more satisfaction

Advertisements

3 Comments »

  1. […] Go to the Article At: Sales and Sales Management Blog […]

    Pingback by Boost Your Sales: “Power, Power, Who’s Got The Power In A Sales Negotiation?” by Dr. Jim Anderson | Bizness Geek — July 21, 2009 @ 8:00 am | Reply

  2. hi jim: i hate to differ but…

    the person with the power is the person who is capable of facilitating another in recognizing all of their own decision making criteria.

    people don’t make decisions based on good information (or we’d all have a helluva lot more customers!). they make decisions based on their internal values, criteria, beliefs, history, etc.

    unfortunately, sales has been information-focused (push and pull) and hasn’t focused on the ability of the Other to go inside to discover their internal criteria. same with negotiating. it’s really possible to help negotiating partners discover their own mutual criteria and come up with a solution. but the skills we have available are insufficient.

    give me a call – 512 457 0246 and sdm@austin.rr.com i’ve developed a decision facilitation model for creating win-win, and in sales used for facilitating the off-line decisions that require buy in internally, before any change happens.

    the seller/negotiator can be much,much more powerful be engaging people at the level of criteria.

    sd

    Comment by Sharon Drew Morgen — July 23, 2009 @ 1:20 pm | Reply

  3. Sharon,

    Thanks for the feedback. However, I think that you’ve missed my point.

    Yes, yes – “the person with the power is the person who is capable of facilitating another in recognizing all of their own decision making criteria” I agree with all of that, but that’s not what I’m talking about.

    What you are talking about is a negotiating tactic, and I’m talking about negotiation preparation. The two are completely unrelated.

    Your view of how much power you or the other side has will affect how you go about handling a sales negotiation. The more power you have, the fewer concessions you’ll be willing to make and when you do make a concession, it’ll be smaller than you would otherwise.

    If you feel that you have less power, then you’ll be more willing to make a concession (what other choice do you have?); however, you’ll be sensitive to the fact that you really don’t have a lot to offer up.

    I’ll grant that having less power will lead you to having a greater focus on finding additional criteria that can be added to the negotiations in order to strengthen your ability to make deals, but you’ll still need to understand how much power you are dealing with.

    Power, power – it’s all about who’s got the power.

    Dr. Jim Anderson
    The Accidental Negotiator Blog
    “Learn The Secrets To Successful Sales Negotiation – Close More Deals And Close Them Quicker!”

    Comment by Dr. Jim Anderson — July 23, 2009 @ 2:26 pm | Reply


RSS feed for comments on this post. TrackBack URI

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Blog at WordPress.com.

%d bloggers like this: