We all know that power is an important part of any sales negotiation - whoever has the most power is in the best position to get more of what they want out of the negotiations. However, do you know how to check your power before you enter into a negotiation? I know the questions that you need to ask yourself before you start and I'm going to tell you what they are...
Can We Talk About Rules?
Nobody enters into a negotiation without having some rules (or regulations) that restrict what they can or cannot do. This impacts both sides of the table and it means that you have two pieces of homework that you need to be before starting a negotiation.
The first thing that you have to find out is what rules you will be operating under. You might think that you know what your restrictions are, but it's always a good idea to check with the folks that you'll be negotiating for and make sure that you know all of rules.
Secondly, you'll want to spend some time and try to find out just exactly what the rules that the other side of the table will have to live with. There are always some restrictions on what they can and cannot do. If you can uncover what these are simply by doing some homework, then you'll start the negotiations with more power than the other side has.
What Is Your Level Of Commitment?
There is a fable about a pig and a chicken and their various levels of involvement in creating a breakfast meal: the chicken is partially committed (egg); however, the pig is fully committed (bacon). The same question needs to be asked about the two sides of a negotiation: just how committed are you?
Ultimately the answer to this question often comes down to how much of an impact the outcome of the negotiation is going to have on you. If you are going to lose your job if you don't get a good deal, then you will be fully committed to making the negotiations successful. However, if this deal is just a "nice to have" deal for your company, then you're not going to be all that motivated to reach a deal.
Risky Business
Making commitments and compromises as a part of a sales negotiation involves taking on some level of risk. This can be a big deal for both sides of the table.
Before you start a negotiation, you need to determine just exactly what your level of risk tolerance is going to be. Put another way, how much are you willing to lose?
The same question needs to be asked about the other side of the table. What is their current situation? Just how far are they going to be willing to go in order to make a deal happen?
What All Of This Means For You
The source of a good outcome in a sales negotiation is making sure that you have enough power on your side when you enter into the negotiation. In order to do that, you've got some questions that need to be answered.
Finding out what rules are governing both side of the table will be key to understanding how the negotiation is going to turn out. Doing some homework and finding out levels of commitment and risk tolerance will also provide you with more power.
Take the time to check on your sources of power before you start your next sales negotiation and you'll ensure that you don't run out of power half-way through the negotiation...!