3 Rules Of Negotiating Power That You Need To Know

by drjim on December 8, 2009

The 3 Rules Of Power In Negotiations Require You To Be Cautious

The 3 Rules Of Power In Negotiations Require You To Be Cautious

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.

What This Means For You

These three rules of negotiating power are your ticket to success. At the end of the day, every time that we enter into a negotiation we’re hoping that we 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.

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What We’ll Be Talking About Next Time

When you hold up a mirror and look into it, what do you see? Do you see a good negotiator? How could you tell if you were looking at one? This is one of those timeless questions that we are always asking ourselves: am I a good negotiator? Well good news, I’ve got the 5 questions that you need to answer in order to resolve this issue once and for all!

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{ 2 comments… read them below or add one }

Marcus Sheridan December 9, 2009 at 11:23 pm

Enjoyed this read Jim. It’s my first time here and I’ll be subscribing next. Your points about ‘power’ are quite interesting and certainly hold much weight and validity. I really appreciated your statement, “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.”
Keep up the great work, I look forward to seeing your future reads.

Reply

Dr. Jim Anderson December 10, 2009 at 6:21 pm

Marcus: Welcome! Just by realizing that negotiating power is basically all mental you are already ahead of most people that you’ll be sitting down to negotiate with. Thanks for the read!

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