What’s your most valuable resource? You might have said money, but I’m willing to bet that it’s really something else – time. You can always earn more money, but once you spend time on some task, it’s gone, gone, gone. That’s why when you are negotiating with someone it is critical that you quickly get an answer to the most important question: how much authority do they really have?
Why Authority Matters
The whole purpose of spending time negotiating with someone is so that you can reach a deal with them. So what is a deal? It’s a two-sided agreement: you promise to do something for the other side of the table and they promise to do something for you. Sounds simple enough, right?
However, as with all such things in life the reality is a bit trickier. That deal may require the other side to give up something or spend money or time doing something. This is all well and fine if the other side has the authority within their company to make this happen. You’ll run into problems if after the deal has been reached that you then find out that the other side does not have the internal authority to carry out their side of the deal.
Often times you’ll encounter this “lack of authority” problem when you are negotiating with salespeople. They may talk a good line, but when it comes down to it, deals can only be done by people who are higher up in their company.
In order to make the best use of your time, you are going to want to be able find a way to spot these folks who don’t have the authority to execute a deal that you’d reach with them. Your goal should be to bypass them and to try to deal only with people who can do what they promise during a negotiation.
5 Ways To Determine How Much Authority The Other Side Has
In a perfect world, every person that you started to negotiate with would be required to carry an “authority card” that they could show you in order to prove that yes, they had the authority to carry out any deal that was reached with you. We don’t live in a perfect world so we’re going to have to come up with a different approach.
Although there is no “silver bullet” technique that will allow you to instantly determine if the other side has the authority to reach a deal with you, there are 5 techniques that can help you uncover situations in which the other side is not going to be able to carry out their side of the deal:
- No Vacations: A very common way of delaying a deal because the other side didn’t have the authority to strike it is to say that the senior management that needs to approve it is on vacation. Confirm that they aren’t before you start negotiating in order to eliminate this ruse.
- Get All Paperwork: As much as we may hate them, the world runs by having the correct forms filled out. Make sure that all required paperwork has been collected and is available before the negotiations start so that there are no delays.
- Be A Man Of Mystery: Or a woman of mystery for that matter. There’s no need to tip your hand to the other side if you don’t have to. Don’t brag to them about the limits of your authority unless they ask.
- Update the home team: It’s critical that you keep your team updated on how the negotiations are going. This will eliminate unneeded pressure being placed on you during the negotiations.
- Complain: Go to a higher authority at the other side’s company and tell them that you won’t negotiate with whomever they sent because they didn’t have enough authority. This is a sure fire way to ensure whomever finally gets sent will have enough authority to strike a deal with you.
What All Of This Means For You
As sales negotiators we all have an obligation to ourselves to make the best use of our limited time. One of the most effective ways to do this is to take the time to ensure that the person that we’re negotiating with has the authority to do a deal.
The other side of the table will often be coy about the amount of actual authority that they have. This means that you’re going to have to take action to find out. This may include asking them directly, researching their reputation, talking with the other side’s boss, or finding out how the other side makes decisions.
The time that you invest in determining just how much of a commitment the other side can make to you will go a long way in making the most of your time. It will also mean that when you reach a deal with the other side of the table, you’ll know that they’ll be able to honor their side of the deal…
– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™
Question For You: What should you do if you find out that the other side does not have enough authority to do a deal with you?
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What We’ll Be Talking About Next Time
When you sit down to conduct a sales negotiation, you need to be assured that the people sitting on the other side of the table have been granted the authority by their company or organization to reach a deal with you. Under normal circumstances this can hard enough to do; however, when the other side is from another country, this gets even harder to determine.