Five Strategies for Negotiations in a Power Imbalance

We all know that feeling of having to negotiate in a situation where the power is unevenly distributed. You feel like you have much more to lose than your negotiation partner. So how do you navigate such a power imbalance and still walk out with a result that is satisfying for you?

Right now the markets are in extreme fluctuation. The war in Ukraine, and the long years of Covid Pandemic started to take a toll on companies and show their effects in the form of inflation. Many companies face the fact that they will have to reconsider their pricing strategy and will have to pass the increase to their customers. Especially in the B2B realm this situation is putting a lot of pressure on the sales teams, as they’re the ones to bring the bad news to the procurement leads on the opposite side.

Negotiations around price are highly emotional, even if all parties try to pretend otherwise.

Don’t forget, negotiations around price are highly emotional, even if all parties try to pretend otherwise. With this in mind, here are five strategies that will help you in your next pricing negotiation in case of a power imbalance. Please note that this article does not take into consideration BATNA (best alternative to a negotiated agreement): although being able to walk out gives you a certain power, we believe that most of the time you are not willing to walk away without a deal.

1. Have the better product and throw the first anchor at the maximum end (this strategy comes from the negotiation expert Chris Voss, he calls it the extreme anchor)! But you can only set high prices if you are absolutely convinced that your product or service is truly better than any alternatives. If you believe in this, you will be able to sell it. If you even have the smallest doubt, don’t even start. Also, study the competition and try to learn about their prices, and if they are delivering on their promises as well as you can. This way you can avoid being bluffed into sentences such as “the competition is 20% cheaper, faster” etc…?

2. Don't discuss price, discuss scope. Divide the price into smaller units. Many sales associates make the mistake of seeing the negotiation as a big, undividable chunk with a price tag attached to one whole product. However, you can sell your services and products in an add-on manner with different convenience perks that will make your opponent's life easier. Don’t forget at the end of the day, all everybody wants is to have peace of mind and a good night’s sleep. So make sure that you are aware of the tangible and intangible assets you can offer.

So make sure that you are aware of the tangible and intangible assets you can offer.

3. Practice to have yourself under control if the negotiation gets heated. Never ever mix the problem and person, always handle them separately. You can say things like “although we’ve been working together productively for a long time, I feel like I will not be able to accept this offer, as it seems unfair for the superiority we are offering. And you know that :-)”?

Do not negotiate against yourself. Don’t give any premature rebates.

4. Do not negotiate against yourself. Don’t give any premature rebates. Many sales people have problems with silence and with listening, so they start talking as they cannot bear sitting there and staring someone in the eyes. Be strong, and please don’t be the first to answer your own questions!

5. Make your opponent part of your solution. Try to understand the clues around personal motivations in your counterpart and give them the possibility to help you. The best way to do this is to ask them “How am I supposed to accept this offer, when I am expected to bring home xyz?” Or, “I understand you are willing to give up on this collaboration, am I right?” In asking the second question you trigger one of the most important human decision drivers according to Nobel Prize winning Daniel Kahneman: our desire for loss-aversion. It turns out that humans will prefer avoiding losses to acquiring equivalent gains.?

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