3 Bargaining Power Rules You Need To Know

Let your mind go back to the last sales negotiation you were involved in. When the conversation finally came down to negotiating a deal, after all the PowerPoint slide shows, all the RFP responses, maybe even baked goods, who had the upper hand – you or the other side of the table?

Why power matters

The advantage in any negotiation lies with the side with the most power. In sales negotiations, power is a slippery thing to do. It’s hard to tell how much you have, and likewise, it’s hard to tell how much the other side of the table has. Despite all this, it is a critical part of the process: “whoever has the most power in a negotiation will probably end up MORE satisfied with the outcome.”

What all this means is that you have to get better at assessing the situation: you have to know how to find out how much power you have and how much the other party has.

Power management: how to do it

Marketers have long known that negotiation is an information discovery process. During this discovery process, you will learn about your sources of power for this particular negotiation. With that said, there are three negotiation rules that will help you learn more about your power during a negotiation:

• Rule # 1 – You have more power: Rule # 1 of power management in a sales negotiation is that you realize that you ALWAYS have more power on your side than you think you do. Even if you think you have NO power at the beginning of a negotiation, then you are wrong; otherwise, why would the other party be negotiating with you?

• Rule No. # 2: Power is not real: You need to understand that power is not real. It only exists in your mind and therefore is what you think it is. If you think you are powerful, then you are. If you don’t think you are powerful, then you won’t be. Of course, this means that you should always imagine yourself as powerful no matter the circumstances. Easy for me to say, difficult for you.

• Rule # 3 – Power Flows: The level of power with which we initiate a sales negotiation is not constant throughout the negotiations. The other party may make verbal mistakes and reveal too much, may make too many concessions or do other things that will increase our power during the negotiation. Also, if we are not careful we can give up our power during the negotiation.

What this means to you

These three rules of bargaining power are your ticket to success. At the end of the day, every time we enter a negotiation, we hope that we will come out of it feeling satisfied with what we were able to achieve; we didn’t give too much away and got what we needed.

To get this kind of satisfaction, we need to have enough power on our side to allow us to get away with the things that count.

Realizing that bargaining 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 faster.