Let’s face it: Our quest for power is an innate part of being human. Most believe increased power leads to increased rewards and that being in a high power position leads to more successful outcomes. It’s no wonder then, that power has always played a significant role in sales negotiations—particularly in long, complex B2B sales conversations where both the buyer and seller have a significant investment in the outcome.
Nonetheless, there has been a seismic shift in this dynamic, and it has upended old perceptions of power. Yes, power still plays a significant role in the outcome of your negotiations—but not necessarily in the way you might think.
Merriam-Webster defines power as “the ability to act or produce an effect” and the “possession of control, authority, or influence over the other.” Defined by these terms, it’s clear why high power is the coveted position in your negotiations. The question is, who has the power in complex B2B sales conversations, the buyer or the seller? This question has been surveyed for years across industries. Consistently, and no surprise, the majority of salespeople say the buyer has the most power. At the same time, when professional buyers were surveyed, more often than not they responded that the seller had the power. The reason? When you did your job well, you cultivated champions within their company. They would feel like they were negotiating across the table from not only you, but with your internal advocates as well. They felt the pressure to choose you, albeit at the best price possible, yet it must be you.
But that’s all changed. According to E.S. Research, over the last five years, polls now indicate you and your customers are in complete agreement: the buyer has the most power. Customers come to you with a list of demands and expect you to simply fill the order. They are absolutely certain they can get their needs met elsewhere. Their other options are equally as good and less expensive, so why should they do business with you? From their high power position, they pit you and your competitors against each other in a final war over price.
Although a familiar scenario, you are not forever destined to fight battles with your competitors, and give away concessions just for the right to stay in the conversation. Yet, to break this cycle, you must first be willing to go against your nature. When the other party (your customer) has more power then you, your natural response is to try to level the playing field. Traditional teachings are all about finding YOUR power or taking the strong and confident stand to retake power. This assumption is intuitive, it’s instinctual, and it’s wrong.
Current studies challenge our assumptions on the role power plays in negotiations, and show you can actually turn your low power role into an edge. “Dominance Complementarity” is a fancy name for the study of power. It specifically demonstrates that when you try to match the “power level” of the person on the other side of the negotiations table, you get worse outcomes, not better. When two high power parties come together, less value is created in the negotiation, therefore there is less value to claim. This will conclude with either no deal or a worse deal for both parties.
This study also shows that when you maintain the high power / low power dynamic that already exists, and you don’t try to exert more or equal dominance as a seller, outcomes are better for both the buyer and seller. In other words, you and your buyer both agree you are in the low power position. From that vantage point, you can embrace this position and make it work in your favor!
In Malcolm Gladwell’s book David and Goliath, he challenges our beliefs and explores a different perspective of advantages and disadvantages. He uses the classic underdog story of David and Goliath to show the advantages to being in the low power position, explaining how what looks to be a disadvantage may be an advantage after all. He delves into the rules of engagement that shape the outcome of these underdog “battles.”
As the story goes, the giant Goliath was expecting to fight a warrior just like himself… someone who would step forward dressed in armor and do battle in hand-to-hand combat. It never occurred to him, or anyone else there, that the battle would be fought on anything other than those conventional terms. But the little shepherd boy David had no intention of going with the norm. Instead he chooses to use completely different tactics, substituting speed and surprise for brute strength, and wins the battle with a sling and a stone.
We’ve seen this scenario play itself out time and again over the years where battles are won and lost between opposing forces of differing strengths. Gladwell highlights a study done by political scientist Ivan Arreguín-Toft, who reviewed every war fought in the past 200 years in which one side was at least 10 times as powerful, in terms of armed might and population, as its opponent. The Goliaths, he found, won 71.5 percent of the time. Even more interesting, he went back and re-analyzed his data looking for what happened when the underdogs acknowledged their weakness and chose an unconventional strategy. In those cases, the “Davids’” winning percentage went from 28.5 to 63.6 percent. In other words, when underdogs choose not to play by Goliath’s rules, they win “even when everything we think we know about power says they shouldn’t.”
Your customers have become the Goliath in the room and you are firmly planted in the low power position. What does this mean for your sales negotiations? Given the findings regarding the benefits of an unexpected approach, it doesn’t seem to make any sense to enter negotiations by playing the game the way you are expected to play. It means that by using unexpected, counterintuitive strategies, you can optimize your negotiations using your low power advantage.
Buyers have numerous sources of power at their disposal, and one of the greatest is the quality of their alternatives. Research shows that the better the buyers’ alternatives—whether your competition or their current way of doing business—the more value they can claim in the negotiation. Their alternatives represent their “safety net,” and the safer they feel about their options, the less likely they will be to change. The quality of their alternatives creates certainty; the more certain they are, the more powerful they feel.
By uncovering your buyer’s alternatives, you also uncover the strategy they will use to leverage their high power position and establish the range of reason for the negotiation. The more certain they are about the quality of their alternatives, the more narrow their range of reason. They will expect you to fight the battle on their terms, selling the same specified solutions to the same limited set of identified criteria, as everyone else. This is a trap. This is how your customers force you into the commodity conversation, and this is exactly where certainty lives. If you look like everyone else, the decision-making process becomes easy for the buyer.
Surprisingly, the person in the low power position has the greatest ability to expand their buyer’s range of reason, and create more value in a negotiation. But instead of entering into the sales conversation following the buyer’s rules of engagement, it’s imperative that salespeople execute an unexpected strategy using counterintuitive skills. To do this, you must not challenge their power—you must challenge their certainty!
One of the best ways to challenge their certainty is by introducing new needs your customers aren’t thinking about—“unconsidered needs” that lead directly to your unique, differentiated solutions. Keep in mind that an unconsidered need will never enter the conversation unless you bring it up. Your job is to “explore new territory” with your customer, new areas of value that you can introduce into the sales conversation. When you focus your negotiation on your customer’s unconsidered needs in a way that leads toward your unknown or under-appreciated capabilities, your customer can no longer do a straight-up comparison of your solutions to those of your commoditized competitors.
Fresh research conducted by Corporate Visions, in conjunction with Dr. Zakary Tormala, a professor at the Stanford Graduate School of Business , reveals just what kind of impact this kind of conversation can have. The study found that introducing your prospects to unconsidered needs heightened the buyer’s perception of quality (by more than 11 percent) and uniqueness (by more than 41 percent), compared to more traditional selling approaches. The unconsidered needs-based approach also produced a positive impact in terms of attitude and choice. On the other hand, positioning your offerings relative to the known or stated needs created no differentiation at all.
You’ve challenged their certainty by introducing an unconsidered need. Now that they’re aware of a vulnerability they didn’t previously know about, you want to make sure they can imagine what their world is like after they address this challenge or missed opportunity. You need your buyer to take ownership of this unconsidered need. You want to provoke them into thinking about it from their own point of view. Ask yourself: How do you drive this insight into the conversation in a way that makes it real and relevant for them in their world?
In a separate study with Dr. Tormala, we looked to see if there is a difference in messaging effectiveness and persuasion based on whether you asked diagnostic questions before or after an insight is delivered. Effectiveness was defined as how influential, compelling, and sharable the message about the unconsidered need was and, most critically, how likely the receiver was to buy a new product or service. The results showed a statistically significant difference in favor of the counterintuitive approach of asking diagnostic questions, in other words, asking them after presenting the insight, instead of before. In fact, asking questions before a message had no statistically significant boost to the impact of the unconsidered need. Further, the study found that asking diagnostic questions before presenting an insight can actually reduce receptivity and inhibit behavior change.
Let’s net it out. In early conversations with customers, you tend to “camp out” in places where you are more comfortable, where there is a confluence of their stated wants and your solutions. This is where you look exactly the same as your competition. To win business today, you must position yourself as their BEST alternative by focusing on your customers’ unconsidered needs—the challenges you are uniquely qualified to solve—and drive them into the conversation very early on. You must follow with questions that provoke your customer to recognize how this issue impacts their world.
In today’s environment, where you are going up against Goliath, there is no advantage to challenging your customer’s power. To optimize your negotiations, you must use your low power advantage the way David did. Applying these unexpected counterintuitive skills to challenge their certainty ensures you will capture maximum value in your negotiations.
[LT1]this? is awesome!
[LT2]I think this is the official name