Maximizing your negotiation leverage using power sources.
You know, we often hear the complaint in our sales training workshops
that the customers have all the power and that they really only care about price.
Is that really true?
If that's what you really believe then your only option is to lower your prices.
And you'd better be the cheapest option or you're going to lose.
The other option is to work hard to develop a stronger value proposition
than the competition and convince yourself and the customer that you have a unique
offering that solves the customer's problem in ways that no other
solution can. Why else would the customers choose your product or solution? You know,
selling has been defined as the transfer of confidence. When everything else is
said and done, you need to convince yourself that you have the best solution
and then transfer that confidence to the customer enthusiastically and clearly.
If you can't, you should expect to get embroiled in a price war.
In the pressure to get the deal done, and especially if you haven't convinced
yourself of the superior solution, you may often give the customer more power
than the situation warrants. They often have the power of the final
decision and they often hold that over our head. It may sound like, "Do what we want,
lower prices, provide additional services, accept our terms, etc.,
or we'll go somewhere else." Yes, you'll often need to negotiate
on key items, but our goal is to reframe the conversation so that we're on more
equal ground. One tactic for doing this is to brainstorm all the reasons that you
have more power than you realize and perhaps the customer is limited in their
power in ways you haven't considered. In preparing to improve your
negotiation leverage, it's helpful to ask yourself a few
pointed questions. Why do I have more power than I think and how is the
customer's power limited? Why would they need to go with us and
our solution? The customer isn't going to offer to disclose these issues to you.
It's your job to do our research, leverage customer coaches,
ask great questions, and figure out the two or three sources
of power that can help you build confidence and support your
negotiation position. When considering these sources,
it's helpful to ask the questions, "Compared to what?" In other words,
what are the customer's alternatives? Go to the competition, do it themselves,
do nothing, and how do you compare to these alternatives? Some examples
of unique capability that give us more power include: you're the best solution or
you have unique features that they need, you're going to help them win
in their situation, you have the ability to help them meet deadlines so they need
it now and only you can deliver, you have delivery capabilities that are
going to help them mitigate risk, or there may be issues
with the competition, competition maybe failed to deliver
in previous examples and you have the ability to tailor or customize this
solution and address their unique business needs. Finally, you might have a customer
relationship that's allowed you to listen and earn their business,
or more industry knowledge, or expertise that allows you to compete
more effectively. For existing customers where you're already doing business,
there are a few additional power sources that come into play,
but you need to be very careful about when and how you use this leverage.
You don't want to abuse your relationship, but it's also helpful to consider why they
went with you in the first place and why it's probably easier, cheaper,
and more convenient for them to continue buying from you as opposed to going and
bringing in someone else. That's why it's so critical to continue
to deliver exceptional service to existing accounts.
Typically, they'd like to continue with you unless you give them a reason
to go elsewhere. Some of the power sources with existing customers include the cost
and difficulty of them switching to another vendor which includes time and the
effort of vetting other vendors. Also, existing contracts that may already be
in place and it's easier to use an existing vendor. Also, the status quo.
It's really too much effort to switch in some cases. And support for a
previous decision. In other words, they don't want to look bad for switching
to another vendor. By spending the time brainstorming and considering the unique
components of your offering compared to the other alternatives,
you can bolster your position and develop more confidence in your solution.
You need to first convince yourself that there's no solution that's more relevant
or more valuable to the customer than what you're offering and then work very hard
to help the customer see that you're the only viable option that meets their
unique needs. If you're the only option available that truly solves their problem,
price becomes much less important. Thank you.