Make More Sales: Understanding Buyer Power & What To Do About It

So you want to sell something (perhaps yourself for a new job?) and you feel that the other side (the buyer) has all the power. Ok, you're right - just give up and stop reading right now.

Hmm, you're still reading. Perhaps although it looks like the buyer has all the power, this really is not the case. Let's take a careful look at what is really going on here and perhaps we can boost your self confidence just a bit.

First a quick review is probably called for. In negotiating, power is all in your head. We imagine that there are many sources of power and they can be based on resources, regulations, laws, or even psychological factors. In the end, we all have different views of just exactly what power means. Most of these views only exist in our heads and they form a critical part of what can be called our inner reality.

Given all that, what can we as a seller in a negotiation do to minimize the buyer's power while maximizing our own? Let's take a look at common sources of power and see how we can gain the upper hand:

• Organizational Time: the buyer may be under the gun because he/she needs what we have to sell in order to meet a demand that his organization is putting on him: "Fill that position NOW!"
  
  
• Personal Time: the buyer may have poor time management skills and has painted himself into a corner so that he needs to make a purchase NOW!
  
  
• Specifications: the product that you are offering (yes, even if it's just you) may be the only one that fits the requirements that he's trying to fill.
  
  
• Location: the closer your product is to where the customer needs it to be the better.
  
  
• Re-Validation: does the buyer have the time/energy/budget to re-validate another supplier if he doesn't select your product?
  
  
• Warranty: does your product come with a better warranty than any other offers that the buyer has?
  

In any negotiating situation not all of these sources of power are going to be valid. However, I'm willing to bet you that at least some of them will be. If you spend just a bit of time thinking about it before you enter into a situation where you are going to be selling something, I think that you'll find that you really have much more power than you thought that you did!


Tags: sales, deals, buyer, power, planning

The Seven Deadly Sins Of Preparing To Negotiate

You wouldn't show up for a job interview naked (well, let's say that you wouldn't show up naked for MOST job interviews). You wouldn't sit down to gamble in Las Vegas unless you knew the rules of the game. You wouldn't start to run a marathon while wearing snow boots. So why would you ever even dream about starting a negotiation with a bunch of wrong assumptions?

You would be amazed at how many people actually do this. Somehow we have all talked ourselves into believing a lot of stuff about how negotiating is done and just who has the negotiating power that are flat out wrong. We seem to get ourselves offtrack even before we start to negotiate. How about if we spend some time now and identify these Seven Deadly Sins so that we can stop doing them!

1. We assume that the other party is all-powerful and is holding all the cards.
   Fact: In truth, the other side rarely, if ever, is , or does. Instead at the start of a negotiation, power is shared by both sides. Perhaps not equally, but you always do have some power.
   
   
2. The other side has a clear idea of exactly he wants.
   Fact: Sometimes he does, sometimes he doesn’t, no matter how detailed he may have been in describing what he is looking for before the negotiations begin. Often times, the other side has a lot of details about something that won't fix their problems. It's your job as a part of the negotiation process to listen and discover their true issues.
   
   
3. The other side is only concerned about price.
   Fact: price is the most overrated word in negotiation. It is an important part of the whole negotiation; however, it's not nearly as big of a deal as most people make it out to be. There are lots of other issues that need to be discussed and these issues will diminish the importance of price in the final agreement.
   
   
4. There are other people / companies / products that have a better solution to offer the other side than you do.
   Fact: This is almost always never the case. Of course there are other options for the other side no matter if you are talking about going on a date or buying an airplane. However, every single other option has an up side and a down side associated with it. What you bring the table has an up side and a down side also. Now the only thing to negotiate about is how valuable your up side it to the other side.
   
   
5. You’d be in a better position to negotiate if only you had more authority.
   Fact: In most negotiations, you’d be better off with less authority. Less authority means that you can build better relationships with the other side because you are NOT the decision maker, instead you are both in this together trying to come up with an agreement that "they" will accept.
   
   
6. Your only real weapon is the ability to ask for less.
   Fact: Asking for less is only one of the literally dozens of negotiation tools at your command, and, oh by the way, many are much more effective than asking for less.
   
   
7. You treat negotiating like just another meeting.
   Fact: failing to get enough sleep, do your homework, or wear comfortable clothing all provide the other side with power over you. Why would you ever put yourself at a disadvantage just because you didn't take the time to prepare?
   

There you go -- now you know the 7 deadly sins that can diminish your negotiating power even before you start to negotiate. Overcoming these 7 can be challenging; however, learning to do so will start paying you back right off the bat.