Thursday, September 9, 2010

The Power of ‘Power’ in Negotiations

In the book You can Negotiate Anything, Herb Cohen describes Power, Time and Information as key elements in any negotiation.

Describing the variable of 'power', he goes on explaining various dimensions (mentioned below) which, if understood and used well, can make you come out as a winner in any negotiation. Here is an excerpt of that.

1. Power of competetion: The author suggests that you should create competition for something you possess. Never enter a negotiation without options because if you do, the other side will treat you lightly.

2. Power of legitimacy: Legitimacy is very strong in our society. Tapping in on its power can certainly give headway. The author gives a tip that use power of legitimacy when it’s for your advantageous to do so and at the same time, challenge its power, when it’s advantageous to do so.

3. Power of risk taking: Risk taking is a must during negotiations. Mix courage with common sense and take calculated risks. But, before taking a risk, calculate the odds to determine whether the potential benefits are worth the possible cost of failure. Never take a risk out of pride, impatience or a desire to get it over with. When stakes are higher, consider sharing or syndicating the risks.

4. Power of commitment: Get a commitment of large number of people because this way you put yourself in a position to exploit a favorable opportunity.

5. Power of expertise: Establish your background and credentials early in the confrontation. That way, your statements may not even be challenged. Prepare ahead of time. But don’t be pretentious. Ask intelligent questions and know whether you are getting accurate answers.

6. Power of knowledge of “needs”: Everybody’s needs are different. What people say they want (their demands) may not be what will actually satisfy their needs. As Herb Cohen has reiterated, to successfully interact with any individual in any setup, determine his or her needs and then fulfill them.

7. Power of investment: It is important to get the other person invest time, money or energy in a situation. It’s the key factor in making an ultimatum work. At the beginning of every encounter, you should approach people collaboratively. If you want to become competitive, be that only at the end, after the other side has made an investment. The extent of an investment and willingness to compromise are directly proportional. The author gives a tip stating that: if you have something difficult to negotiate, cope with it at the end of a negotiation, after the other side has made a hefty expenditure of energy and substantial time investment.

8. Power of rewarding or punishing: Yours as well as other side’s perception about a person, situation or object play a very vital role in negotiations. Don’t eliminate options and reduce the other side’s stress unless you receive something for something. Let them wonder until you have received what you are shooting for.

9. Power of identification: Get others to identify with you. The power of identification exists in all interpersonal relationships including business transactions and politics. Identification, whether with or against, plays a big factor in negotiations and decision makings. Therefore, behave decently and try to help others.

10. Power of precedent: Use the power of precedence to your advantage. To justify what you’re doing or asking for, always refer to other situations similar to the one you’re currently in, where you or others did so-and-so, and the result you wanted occurred.

11. Power of persistence: Be persistent enough while negotiating. You must be tenacious. Persistence pays off.

12. Power of persuasive capacity: If you want to convince people, show the immediate relevance and value of what you are saying in terms of meeting their needs and desires.

13. Power of attitude: Try to regard all situations and encounters as a game, says the author. Do your best, but don’t fall apart if everything doesn’t pan out as you’d like it to. If you develop this healthy attitude towards all negotiations, there will be many benefits like: a) you will have more energy, b) you will be under reduced stress and c) you will get better results, because your attitude will convey your feeling of power and mastery of your life.

In my coming blog posts, I will also put up information about the other two elements (time and information) in negotiations.

Till then, happy reading!

Wednesday, September 1, 2010

Co-existence of Sales and Marketing – Has it Changed?

How many times have you heard this dialogue or have experienced it yourself?

Sales Manager: "Give me good leads. The leads which you gave are not good. How can my team sell?"
Marketing Manager: "You have got good leads. Your guys are not able to close those!"
Well, gone are the days when companies and managers could afford to be in the middle of such discussions. In today's active online world, it is no more lead generation, handover and closure with separate stakeholders from marketing and sales for each task. Today, buyers rely more on online reputation, social media and sites than just what the sales people tell them.

Smart organizations thrive on creating a culture where the marketing and sales people work together hand in hand to facilitate faster closure. It's no more about only "leads". Free content is what drives the action. Marketing and sales need to work together in creating valid content for each step in the sales process and facilitate easier evaluation of the offerings throughout the sales cycle.

In fact, in case of complex sales, which involve multiple decision makers and have long sales cycles, social media can play a very important role. A well managed social reputation can in fact shorten the sales cycle. It can help the buyers in making more informed decisions and can also help sales people in bringing people into the top of the sales funnel.

What is your sales and marketing strategy?