Every time we show up for a negotiation, we are bringing something along with us that we really should not be bringing and I’m not talking about negotiation styles or negotiating techniques. What is this you ask? Assumptions. For a wide variety of reasons, we’ve all come up with a list of assumptions about the other side of the table, who has power, and what we can and cannot do. It turns out that most (if not all) of these assumptions are wrong. Let’s take some time and look at them and figure out what we should NOT be bringing to our next negotiation.
The Buyer Is All Powerful
It can be all too easy as we enter into a negotiation to believe that the other side holds all of the cards. For whatever reason, we have been convinced that they are all powerful and that we will be at their mercy during the entire negotiation. It turns out that this is rarely, if ever, correct. The other side is dealing with a whole list of issues and problems that we may not know about – they don’t feel as though they have all the power.
The Buyer Knows What He Wants
You would think that this would be a given. I mean, who would enter into a negotiation if they didn’t have a firm grasp on exactly what they wanted to get out of the negotiation, right? Both sides may be working off of a very detailed specification; however, just because they have the same specification that you have does not necessarily mean that they know what they want to get out of the negotiation.
The Sale Will Be Made Based On Price
This belief is a classic one – give me the price that I am demanding or I’m going to leave this negotiation. It’s pretty easy to see how you can have this view given how much time we spend preparing to defend our prices and how much time during the negotiation may be spent talking about prices. However, it turns out that price is the most overrated word in a negotiation and the deal rarely comes down to what price you offered the other side.
Your Competition Has Better Products And Better Prices
Thinking that the people that you are competing against are better equipped to meet your customers’ needs is a common thought for most people prior to entering into a negotiation. The reality of the situation is that this is almost never the case. What is even better is that your competition is thinking the same thing about your products and your prices!
You’d Do A Better Job Negotiating If You Had More Authority
Having to halt the negotiations so that you can go make a phone call or run up the stairs to talk with your boss seems like it is a real hindrance to making progress in the negotiation. More often than not, negotiators find themselves wishing that their company would give them more authority so that they could just get this deal done. However, what a lot of us don’t realize is that we’d actually be a lot better off with less authority…
Your Only Tool Is To Lower Prices
Yes, cutting your price is one of the tools that you have at your disposal during a negotiation. However, what you need to realize is that in actuality you really have dozens of different negotiating tools that are available to you at any point in time during a negotiation. What is even more interesting is that these other tools are often even more effective than cutting your prices.
What All Of This Means For You
As we enter into our next principled negotiation, if we are not careful we will be dragging a big bag of assumptions about how this negotiation is going to unfold along with us. What’s most important here is that most of these assumptions will turn out to be false and they can hold us back from getting the deal that we are looking for.
All too often we give the other side of the table too much credit before a negotiation starts. We assume that they are all powerful, that they know exactly what they want, or that they will make their decision based solely on price. The reality is that none of these assumptions are generally correct. We may also assume that our competition is better positioned than we are or that we could close a deal if we had the authority to do so. Once again, both of these assumptions are generally wrong.
What we need to realize when we start our next negotiation is that we may actually have more power and be in a better position than the other side of the table. We don’t know what their exact situation is and so we can assume that we are better off than they are and proceed from there. With this type of mindset, we are going to be one step closer to getting the deal that we are looking for.
– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™
Question For You: What can you do if all the other side wants to talk about is price?
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What We’ll Be Talking About Next Time
Often when I’m working with new negotiators, they’ll ask me the classic question “how do I negotiate?” This is a fair question – even if it is a bit broad. We all negotiate every day even if we don’t really realize that we are doing it. What my students are really asking me is how they should go about conducting themselves during a formal negotiation. This may be a new experience for them, so that makes the answer to this question very important to them.