The Art & Science of Negotiating A Sale – Part 1

The sales process is fraught with risks and opportunities.  This blog series explores in depth common buyer tactics in negotiations and how to win and close more sales effectively.

The common buyer tactics in negotiations:

Buyers may use a negotiating tactic referred to as mandated authority. The introduction of procurement department representative who says something like “It’s the policy of our company, or my boss’ edict is . . .

Mandated Authority

Many companies had a tendency to concentrate their negotiation training on aggressive tactics. Although these tactics will often yield a short-term results, as they were conceived to wrestle value from the other side without providing any contributing value in return. They are considered ‘Win-Lose‘ by nature.

You will frequently have to negotiate with others who apply these tactics aggressively against you. It is vital to notify the counterparty that you possess the knowledge and skills to neutralize their effect with appropriate counters.

The counters separate the tactic from the person. So although you might be acting and sometimes judging the tactics employed, at no time do we recommend you lay blame on the aggressive person or attribute the tactic to the person’s identity. Employing these tactics doesn’t automatically make a negotiator a manipulator or aggressor. So we must make a distinction between a negotiator using manipulative tactics, versus a negotiator being manipulative because they are using these tactics.

If you are unable to involve your “champion” – your key contact within the buying organization – things can get ugly during final negotiation process. Try to hold your ground without conceding more than you have planned for and remember the value your champion recognizes from your solution. Mandated Authority comes in two main forms:

  1. The other party may only negotiate on particular items, while others remained fixed by a higher authority. (Sometimes called ‘Limited Authority’).
  2. A higher authority can only give final approval.

First ask the other party who in their company makes the final decision to buy. You may need to probe further to uncover the other decision makers and line of authority. If you neglect to inquire fully at this stage, it may mean that negotiation time and energy have been wasted by the higher authority’s torpedoing “No“.

You don’t actually need to start negotiations with the decision maker. It is useful to develop a relationship with the lower level authority person with whom you are negotiating, as they exert a great deal of sway in your favor. Once you determine that someone holding a higher degree of authority is needed to move forward with the purchasing decision, inform your current contact that you will need to speak with that person.

When faced with off the table items discussed in case 1 above, don’t accept these at face value. If you do, the list will grow and you will have achieved nothing in exchange for these concessions. Discover the interests that lie behind those items that are deemed as non-negotiable.

Having a mandated authority from whom to secure final approval is most useful in circumstances of high risk and in new and unfamiliar markets.

In the next series of this blog post, we’ll explore how to navigate sales negotiation decoys.

Philippe Lavie, president KeyRoad Enterprises LLC, dedicated to helping companies plan for, accelerate, and manage their revenue growth. KeyRoad training services help companies implement customized sales processes, messaging, and training programs designed to drive increase revenue and greater accuracy in their pipeline management.

Philippe Lavie, president of KeyRoad Enterprises, is based in Chicago IL and San Francisco CA. He can be reached at: 415-229-9226 or at plavie@keyroad.com

Rob Gullett is a Senior Consultant for KeyRoad Enterprises, LLC and CustomerCentric Selling© (CCS) based in San Francisco CA. He can be reached at:  (925) 330-7255 or by email at: robgullett@keyroad.com

Special gratitude to the following referenced authors, companies, and organizations:

  • CustomerCentric Selling©
  • “Getting to Yes” by Roger Fisher and William Ury
  • “Power of Negotiation” by William Zartment and Jeffrey Rubin
  • HBR and Harvard Business School – case studies on negotiations
  • Spin Selling© by Neil Rackham

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