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You Can Have More Control Than You Realize

“To have greater control in your life, start by controlling what you control in your life.” -Greg Williams, The Master Negotiator & Body Language Expert

“I’m sorry! I’m sorry! I’m sorry! I’m sorry!”

That was what she said with passionate sincerity as soon as he answered the phone. Her cell phone battery had died, right at the time when she and her friend were supposed to be deciding where they were going to meet. Both had been driving to meet each other at an undetermined destination. She knew he’d be upset because she knew the demeanor he’d displayed in similar situations in the past.

By saying “I’m sorry” numerous times, as soon as her battery had enough power to call him, she defused a situation that could have quickly gotten out of control. That was also the way she controlled that situation.

What do you do to defuse and control situations before they get out of control? You can have greater control in any situation by first making a genuine effort to connect with someone. You can do this by displaying heartfelt empathy for the plight that the person is experiencing; this should be done in a manner that allows him to sense that your actions are sincere. To the degree that you can suspend negative prejudgments that might afflict your thoughts about the person related to past encounters (e.g. he’s going to be enraged with me, so I’d better adopt a posture that says don’t push me too far), you can stay ‘in the moment’ and foster a mindset that’s less fraught with despair. That will allow you to be perceived as being more empathetic.

My motto is, “You’re always negotiating!” That means, what you do today influences tomorrow’s outcome. Thus, a person’s actions today gives insights into how he might react to situations tomorrow. The woman mentioned in this story knew how her friend would react to not being able to reach her. Thus, she was able to control him by stating so profusely how sorry she was.

If you become more mindful of the actions you engage in with others, you too can shape their future actions/reactions. That means you’ll have greater control of your life’s activities … and everything will be right with the world.

What does this have to do with negotiations? 

When negotiating, like a game of chess, you have to be aware of how your opponent will respond to moves you make. Being aware, based on past experiences about that person’s actions, allows you to predict with more certainty how he’ll respond in different situations, which will give you greater control throughout the negotiation. That in turn, allows you to make the moves (i.e. offers/counteroffers) that will progress the negotiation in the manner that suits your negotiation plans. That also means, your negotiation efforts will net greater outcomes for you.

Remember, you’re always negotiating! 

What are you thinking? I’d really like to know. Reach me at Greg@TheMasterNegotiator.com

To receive Greg’s free 5-minute video on reading body language or to sign up for the “Negotiation Tip of the Week” and the “Sunday Negotiation Insight” click here http://www.themasternegotiator.com/greg-williams/

#HowToNegotiateBetter #CSuite #TheMasterNegotiator #ControlEmotions #Psychology #Perception #ControlLife #Control #leadership #HowToImproveyourself #Achievement

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Best Practices Body Language Culture Entrepreneurship Human Resources Management Marketing Negotiations Sales Skills Women In Business

How To Address Objections In A Negotiation

“Objections are used in an attempt to see what one can obtain. Before addressing objections know what you want and what you’re willing to forgo to acquire what you need.” -Greg Williams, The Master Negotiator & Body Language Expert

I’ve addressed hundreds of thousands of objections over the course of my negotiation career. Objections should be addressed with the mindset of information gathered about the party with whom you’re negotiating; that includes silent partners that are not at the negotiation table, foils that might be aligned with your negotiation opponent to perform nefarious functions, the demeanor of the negotiator(s), and the culture of the negotiator’s organization. Such insights, along with reading one’s body language, will lend credence to the validity and viability of the person making objections during a negotiation. That, in turn, will allow you to discern how important an objection is, versus it being a possible ploy, created to distract you from something that is more beneficial to your position.

Handling Objections:

Before addressing objections, always be aware of the attempts of others on the opposing negotiator’s team to hype them; remember, these attempts could stem from people that are not at the negotiation table. Hyping objections can be in the form of giving them the appearance of being more valuable or dire than they are, for the purpose of gaining insight into how you might react to such attempts. Keeping that in mind, follow the steps below when addressing objections in your negotiations.

1. When the first objection is posed, assess its veracity to determine if you should address it at all. If the other negotiator insists upon having it addressed, note his body language before proceeding to the next step. In particular, you should observe if he looks directly at you with a smile or scowl, if he looks through you as though he’s in a daze, or if he makes such a request in a timid manner. In all such cases, appraise the degree to which any of these gestures might be ploys.

a.) Looking directly at you is a sign that he’s focused. A smile can indicate that he wants to convey a friendly/casual perspective. A scowl may be an indication of a more serious projection and/or one to set the stage to take his request more seriously.

b.) Looking through you in a daze could imply that his mind is somewhere else and the fact that he’s testing you as a ploy.

c.) Making the request in a timid manner could belie the fact that he doesn’t possess a strong demeanor. He might also be examining you to see if you’ll attempt to take advantage of his docile demeanor.

2. Ask the other negotiator to cite all of his objections. Your goal is to get them out in the open. Do this by requesting what else he’s concerned about. If warranted, have him detail why he thinks his objections are valid. Observe hidden insights gleaned from his body language and nonverbal signals, as mentioned in step 1. By doing this, you’ll gain a sense of direction he has for the negotiation.

3. Once you’ve garnered enough insights about the purpose and value he has for citing his objections, have him prioritize them. Then, address one that’s lower on his priority list to see if that has more weight than disclosed. Couple this tactic with the outcome you seek for the negotiation. Continue this process to the successful conclusion of the negotiation.

In any negotiation, you should know what you’re dealing with before you attempt to deal with it. Such is the case when dealing with objections. Thus, by implementing the suggestions above, you’ll be better positioned to keep in check those objections intended to dissuade your attention from what’s more important. That, in turn, will allow you to be more laser focused on addressing the real objections that will impact the negotiation … and everything will be right with the world.

Remember, you’re always negotiating!

After reading this article, what are you thinking? I’d really like to know. Reach me at Greg@TheMasterNegotiator.com

To receive Greg’s free 5-minute video on reading body language or to sign up for the “Negotiation Tip of the Week” and the “Sunday Negotiation Insight” click here http://www.themasternegotiator.com/greg-williams/

#HandlingObjections #negotiations #Negotiator #HowToNegotiateBetter #CSuite #TheMasterNegotiator #psychology #CombatDisinformation #hardpower #HowToHandleObjections

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The Most Powerful AI Needs Human Judgement

I grow weary of reading the simplistic headlines around the impact of AI. Some people say that AI will put many of us into a new leisure class that doesn’t need to work. Others argue that AI will make us all unemployed. They are both saying the same thing, actually, so it is just a personality test to divide optimists from pessimists. But there is no technology that in the past had that kind of impact, so why is this one different? It probably isn’t.

What is much more likely is that as machines do more, we humans will do something else. Something machines can’t do yet. That’s the way it has always been, so I think that is the way to bet.

What fuels my belief that this is true is that the most powerful AI we see today depends on human judgement. No, I don’t mean the highly-paid data scientists and AI engineers that are all the rage these days. Sure, they are important, but I am talking about ordinary people doing ordinary jobs using judgement that computers just don’t have. This technique is called semi-supervised machine learning or active learning.

Here is how it works. Supervised machine learning is what most AI applications use. They need human judgement, too. But they use it only at the beginning. They ask humans to tell the system the right answer to a question–for example, whether a tweet has positive or negative sentiment. You pile up enough tweets with human answers and use that to train the AI system. So, far, so good. But that is where most systems stop.

The most powerful systems keep getting better, using semi-supervised machine learning. The secret is something called the confidence score. Most AI systems can do more than just answer the question. Beyond telling you that they think this tweet is positive or that tweet is negative, they can tell you how confident they are in that opinion. So, the system might be 90% confident that this tweet is positive and just 60% confident that another tweet is negative.  This provides some interesting possibilities for semi-supervision.

You can set up your system so that your system handles automatically any tweet with over 70% confidence. If it is that sure of itself, let it provide that answer on its own. But if it is less than 70% confident, you can refer that tweet to a human being to check its answer. Is that tweet negative–the one with 60% confidence? Checking the answers the system isn’t sure of is semi-supervision, and it has two benefits. The first is that the system is more likely to get the answers right if it can ask a human to check its work.

The second benefit is that each new human answer is new training data that the system can use to improve its model. By constantly asking for help with the answers it is least sure of, the system is improving itself as rapidly as possible. You can add more training data at any time to any machine learning system, but if your new training data is merely adding more examples of what the system is already doing well, it doesn’t cause any improvement. Only by adding new training data in the areas that the system is getting wrong does improvement happen.

So, yes, machine learning is very important. But semi-supervised machine learning is what provides that most rapid way of continuously improving your machine learning application. If your team isn’t using that approach, it might be time to ask why not.

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Best Practices Entrepreneurship Human Resources Management Marketing Negotiations Sales Skills Women In Business

Are You Afraid Of Achieving More In Your Life?

“Greater achievement starts with the right mindset. To acquire the right mindset, build on your past achievements.” –Greg Williams, The Master Negotiator & Body Language Expert

Do you lack the confidence to become bigger, better? If so, do you really know what’s holding you back? The answer is, you!

Some people are so comfortable in their life, they forget to grow. They forget, the same attitude that allowed them to grow is the same attitude they can build on to continue that growth. Do you remember that attitude, what that mindset was, for you?

As long as you’re alive, you should continuously explore the outer reaches of your grasp. That’s the way that you continue to grow.

Don’t let your current lack of drive be the inertia that prevents you from moving to higher levels. You’ll only climb as high as you think you can go, and you’ll never know how high that is until you attempt to go higher.

So, when it comes to moving higher, move higher. First, start the process in your mind. Then, put your thoughts into action. You may not succeed to the degree that you thought you would, but you’ll no longer be where you were before you started your ascension. Note any progress as progress made, no matter how slight it might be. That progress will combat the inertia that previously occupied your thought process, which means you’ll be clearer in the future for higher takeoffs … and everything will be right with the world.

What does this have to do with negotiations? 

In a negotiation, if you play it ‘too safe’, you could dampen the gains that you would have otherwise realized. Plus, you’ll display to the other negotiator your pallet for risk. Displaying that will allow him to calibrate the offers he can make, based on the degree of risk adversity you display. Depending on the value of what you’re negotiating, such a move could make you negotiate against yourself (e.g. Other negotiator: This is the last one and I have someone else that’s interested in it. You: I’ll take it!)

When it comes to exploring higher possibilities, be an explorer. Even if you have to bluff yourself into believing that you can obtain more, do so with vigor. Make your belief believable to yourself and your negotiation colleague. He, in turn, may see you in a new light, one in which he grants you more respect and more concessions.

Remember, you’re always negotiating!

What are you thinking? I’d really like to know. Reach me at Greg@TheMasterNegotiator.com

To receive Greg’s free 5-minute video on reading body language or to sign up for the “Negotiation Tip of the Week” and the “Sunday Negotiation Insight” click here http://www.themasternegotiator.com/greg-williams/

#HowToNegotiateBetter #CSuite #TheMasterNegotiator #ControlEmotions #Psychology #Perception #Fear #leadership #HowToImproveYourself #Achievement

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Best Practices Body Language Entrepreneurship Human Resources Management Marketing Negotiations Sales Skills Women In Business

Why Head Nodding Is Really Powerful In A Negotiation

“Head nodding is a psychological way to get people to agree with you. If you know when and how to nod your head others will agree with you more often.” –Greg Williams, The Master Negotiator & Body Language Expert

“ … I didn’t realize it at the time, but his head nodding really affected me during the negotiation. I almost felt like I was hypnotized.” That’s the power of head nodding in a #negotiation.

If used right, head nodding can be a really powerful gesture in a negotiation. If used excessively, it can give the appearance of a know-it-all that knows a lot about nothing but thinks he does; that could give the impression that the person doing the nodding is self-centered, egotistical or a BS artist.

Continue reading to discover why, if done right, head nodding in a negotiation is such a powerful ploy to employ in a negotiation.

Head Nodding Implication:

When you’re engaged in a negotiation, nodding your head as you make a pronouncement lends credence to what you’re conveying. The subliminal message that’s conveyed is, I really believe what I’m saying is true, and I’m committed to my statements. Your challenge is to dissect when the real truth is reality, versus the other negotiator attempting to convince you that what he’s saying is reality.

Right Way To Use Head Nodding:

The best way to promote this gesture is to smile and maintain eye contact with the other negotiator as you’re speaking. To enhance the effect, pause for 1 second as your speaking to denote something important is about to be said. Then, as you make that pronouncement, nod your head to emphasize the point. The combination of the head gesture, smiling and maintaining eye contact as you deliver your statement will have a hypnotic effect on the person with whom you’re speaking.

It’s also worth noting that people who are aligned with what you’re saying when you display a head nod will tend to nod back at you. Their gesture not only serves as confirmation that they agree with you, at that moment, they’re also allowing you to lead them. Thus, it behooves you to observe to what degree your negotiation companion nods in return to your head nodding.

Wrong Way To Use Head Nodding:

Nodding excessively will dilute the emphasis that such a gesture has during a negotiation. Therefore, don’t nod too frequently. Doing so could cause the other negotiator to nod off, which means he’ll pay no attention to your nodding gestures. Another thing to consider is what words you choose to emphasize when making this gesture. If the action is synchronized with the wrong word(s), you could end up shifting the perception of what’s important. In that case, you’d have your negotiation counterpart psychologically wondering exactly what you’re attempting to convey and where you’re headed.

A lot of information is conveyed through the gesture of head nodding. Be mindful that good negotiators may attempt to use this gesture as a tactic to assess to what degree, and when, you might follow their lead. Thus, you must be alert to the way you respond to such action; your reaction or lack of will emit a signal that can be used as a gauge by the other negotiator.

If you want to enhance your believability during a negotiation, nod when making statements that you want others to believe in. That simple gesture, accompanied by strong eye contact and a smile while delivering your message, will enhance your negotiation efforts … and everything will be right with the world.

Remember, you’re always negotiating!

After reading this article, what are you thinking? I’d really like to know. Reach me at Greg@TheMasterNegotiator.com

To receive Greg’s free 5-minute video on reading body language or to sign up for the “Negotiation Tip of the Week” and the “Sunday Negotiation Insight” click here http://www.themasternegotiator.com/greg-williams/

#NegotiatingWithABully #Bullying #Bully #negotiations #Negotiator #HowToNegotiateBetter #CSuite #TheMasterNegotiator #psychology #CombatDisinformation #hardpower

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Best Practices Entrepreneurship Investing Management Marketing Negotiations Sales Skills Women In Business

What Frequency Are You On?

“The frequency you’re tuned to determines what you hear and how you act. Be attuned to the frequency that serves you best, when it’s the best that you need to serve you.” –Greg Williams, The Master Negotiator & Body Language Expert

“… We just can’t seem to #communicate! I don’t know what’s wrong with you.” Such were the sentiments of one person to the other.

Being on the same frequency as someone that you’re attempting to communicate with, is essential for the transmission of your thoughts and ideas; it’s also pertinent for the assembly of the other person’s thoughts and ideas. If you’re not on the same frequency, at best you’ll misconnect, at worse, you can destroy a relationship.

As my astute friend and thought leader David Dadian, CEO of #Powersolution states when referring to frequency, there’s a commonness to the words one uses when communicating with someone else. That commonness enhances the communications; that, in turn, decreases the incidents of #miscommunications. Thus, when people are on the same frequency, they’re communicating on the same level, they’re tuned to the same station, the same network. One is not at 97.5, while the other is at 107.2.

One way to determine that you’re on the same frequency is by the energy level you experience. A higher energy level of experience denotes a positive flow, while a low level can be the signal of miscommunications. A low level also tends to drain people of their energy.

The next time you’re engaged in what you determine to be a serious conversation, note the level of energy present. Even if you’re discussing something of sorrow or glee, they’ll be a degree of energy that’s locked into the exchange of thoughts and ideas. As long as you can relate that energy to being on the same frequency, you’ll know, at least, that you’re really communicating with the other party. If you observe a whimsical appearance, displays of confusion, or any sign that the person with whom you’re speaking is not getting your message, that will be an indication that there’s a frequency mismatch. That should also serve as a signal to reconnect; you’ve lost your WiFi.

When it comes to frequency, the better you and your partner are attuned to the same station, the greater the chance you’ll communicate at a higher level than otherwise would be the case … and everything will be right with the world.

What does this have to do with negotiations?

In every negotiation, the outcome rest on your ability to communicate effectively with your counterpart. Some people don’t communicate as efficiently, because they allow mitigating circumstances to sideline their efforts. That can come in the form of not liking someone appearance, ethnicity, gender, etc.

To enhance your negotiation efforts, be attentive to the distractions that might prevent you from being on the same frequency as your negotiation partner. When both of you reach that plateau, you’ll sense it. It’ll be like the two of you just click when exchanging offers and counteroffers. That’ll also be the time to pursue your negotiation objectives more fervently. That’s the power of being on the same frequency. You and the other negotiator will hear the same things, and you’ll be using common words to speak the same language.

Remember, you’re always negotiating.

What are you thinking? I’d really like to know. Reach me at Greg@TheMasterNegotiator.com

To receive Greg’s free 5-minute video on reading body language or to sign up for the “Negotiation Tip of the Week” and the “Sunday Negotiation Insight” click here http://www.themasternegotiator.com/greg-williams/

#HowToNegotiateBetter #CSuite #TheMasterNegotiator #ControlEmotions #Psychology #Perception #rejection #leadership #HowToImproveYourself #Communication

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Best Practices Body Language Entrepreneurship Human Resources Investing Management Marketing Negotiations Sales Skills Women In Business

How To Make Powerful Heart Gestures In A Negotiation

“When it comes to matters of the heart, nothing will matter unless you control the emotions that creep from your heart.” -Greg Williams, The Master Negotiator & Body Language Expert

“… and he had the audacity to touch his heart with the back of his hand.”

Where body language is concerned in a negotiation, heart gestures are powerful moves because they’re supposed to connote sincerity. When done correctly, they suggest that the purveyor is being honest and forthright. Here’s the rub. Good negotiators are aware of the potency of this gesture. Some use it to feign sincerity when nothing could be further from the truth.

This article contrasts some of the differences between heart gestures in a negotiation. It also highlights how you can make powerful heart gesture moves when you’re negotiating. If you want to increase your negotiation abilities, take note.

  1. Suspect Heart Gestures:

a. Quick hand movement (hands move towards the heart and then quickly moves away – possibly denoting a quick feeling of emotion/sincerity) Note the point that action occurs to discern the degree of sincerity. If done excessively, an attempt to feign sincerity could be afoot.

b. Non-synchronized hand movement – (hand moves towards heart but not at the pace of speech – denotes lack of sincerity) Speech and body movement are synchronized. A lack of synchronization indicates a lack of forthrightness.

c. Backhanded movement – (more than likely a feigning attempt to nefariously engage you emotionally) This is an unnatural move. The more it’s done, the greater the probability that this trickster negotiator is using this move to solicit your emotions for his dastardly deeds.

  1. Powerful Heart Gestures:

a. Quick hand movement (hands move towards the heart and maintains position for several moments – used to convey surprise or hurt feelings) To add emphasis, lean towards the other negotiator when projecting this action.

b. Synchronized hand movement – (hand moves towards heart at the pace of speech – denotes sincerity) This movement, while capable of being feigned, is more likely a reflection of true emotions being displayed.

c. Hand(s) cupped near the heart – (Attempting to keep one’s emotions in check) Observe the length of time this gesture is maintained. To embolden this move, allow your eyes to become glazed or uncircumspective. This will add to the validity of this gesture.

When engaged in a negotiation, take note of when a negotiator touches his heart and the number of times that he does so. Use this to establish your baseline of how and when, and under what circumstances, you’ll employ this gesture. The purpose of doing so is to become mentally reflective of the other negotiator’s actions. Once you enact your gestures using the intervals that he displayed, your gestures will appear to be more genuine to him.

The heart has been romanticized as the stimuli of our emotional being. To convey your emotional sincerity, let your emotions flow freely when it serves you to do so. If you’re negotiating with someone of like-mindedness, your heart gestures will be heartfelt. They’ll be noted subliminally on the subconsciousness of the other negotiator, if not on a conscious level. That will tend to endear you to her, which will make the negotiation flow less obstructively … and everything will be right with the world.

Remember, you’re always negotiating!

After reading this article, what are you thinking? I’d really like to know. Reach me at Greg@TheMasterNegotiator.com

To receive Greg’s free 5-minute video on reading body language or to sign up for the “Negotiation Tip of the Week” and the “Sunday Negotiation Insight” click here http://www.themasternegotiator.com/greg-williams/

#HeartGestures #NegotiatingWithABully #Bullying #Bully #negotiations #Negotiator #HowToNegotiateBetter #CSuite #TheMasterNegotiator #psychology #PowerNegotiation

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Best Practices Entrepreneurship Management Marketing Personal Development Women In Business

Protect Your Schedule, Time and Attention

Are you constantly competing with others over your schedule? Do you feel inundated by a barrage of interruptions and distractions each day that leaves you feeling as if you worked like a crazy person all day and accomplished nothing as a result?

In my new book, Attention Pays, I outline strategies for busy professionals to protect their time and attention from being fritted away by anyone and anything asking for it.

Here are seven strategies you can being implementing today to take control of your schedule and permit you the time necessary to leverage your attention to accomplish more each day.

Create a personal daily strategic 15-minute appointment – Take this time to determine your top three non-negotiable activities you must complete before you sleep tonight. Several years ago, I challenged an executive leadership team at Comcast to invest 15 minutes of their attention every day in a strategic appointment. They say awesome results, become the highest performing team in their region. Their shared increased focus allowed them to prioritize completion of strategic objectives and invest in their people’s development instead of being distracted by everyday busyness.

Schedule your morning routine – We outlined this routine in Chapter 3 of my new book, Attention Pays. It’s critical that you get this on your calendar so that phone calls or meetings don’t encroach on this important time.

Assign certain activities to specific days of the week – This system has you group regular activities together to maximize productivity and minimize distractions. Will it work seamlessly with every week in the same way? no, but with a system, your team or assistant can schedule meetings on designated days. We worked with a financial services executive to design her ideal week. here is what hers looked like. Yours, of course, will be different:

  • Monday: Meet with team members, senior leadership, and her boss in the office.
  • Tuesday to Thursday: Industry and vendor networking events, client appointments, presentation preparation, and travel. These days were spent outside the office and included a work-from-home day.
  • Friday: As she enjoyed being home for weekends, any meetings were local and never scheduled to finish later than 5pm. If no meetings were scheduled, she focused on strategizing for the upcoming week and catching up on administrative work.

Schedule no talk days – My best friend manages multiple companies, raises my two beautiful God-daughters, volunteers in her community, and enjoys working with her clients. She discovered that on days she doesn’t talk to anyone, she’s massively productive. So, she started scheduling no-talk days – days with no appointments, which are dedicated to strategy and achieving goals. As an extrovert, I found this strategy especially helpful. Could you do this once a quarter to make more progress toward your bigger goals?

Schedule service days – I allocate one day a month on my calendar for pro bono assistance to people in my industry who need help. could you add a service day to your calendar?

Time block – Schedule space in your calendar for strategy, email review, meetings, social media engagement, and personal time.

Create visual recognition systems – Use color-coding to simplify your life. My calendar uses a variety of colors to show speaking, travel, consulting, personal appointments, and administration and business development.

Block out personal time in advance and honor the appointment with yourself as you would a client or employee.

Pick up a copy of Attention Pays to learn more about creating an extraordinary life by ‘unplugging’ from the constant barrage of disruptions and ‘plugging in’ to the tools, strategies, and mindsets that allows you to harness your attention to reach your highest potential.

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Body Language Entrepreneurship Management Marketing Personal Development Women In Business

Focus Outward Rather Than Inward … 4 Steps to Adapting to Your Listeners Why

Watch Focus Outward Rather Than Inward … 4 Steps to Adapting to Your Listeners Why

Another strong distinction between a good and influence communicator is your ability to adapt on the fly without ever skipping a beat.

An influential communicator has the ability to pay close attention to what is happening between them and their listener and adapt to that person’s style, expectations and their WHY.

Avoid getting caught up in your own dialogue missing the opportunity to adapt to your listener’s WHY.  Learn the 4 immediate steps you can Take Action on Today!

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Leadership Marketing Personal Development Sales

How Economics Betrays Business Leaders Every Day

I hear even highly-respected consultants and business leaders express dangerous misconceptions about price and discounting. I suspect it’s because so many people took basic economics to heart without digging deeper into the underlying assumptions or learning the true role of pricing. No thanks to economics, we often mis-

apply the supply/demand relationship we learned in our introductory Econ courses. You could not make a bigger mistake.

The demand curve is a foundational concept in economics. The law of demand states that lower prices incentivize higher demand (in units). The principle is correct, but only under artificial conditions. Rather, my decades of work in pricing and value have driven a conclusion that most businesses grossly mis-apply supply/demand analysis in the real world.

I’ve met multiple sales people, sales leaders and CEOs who rationalize indiscriminate discounting. Presumably, they are relying on a misunderstanding of the demand curve. This is far more than mere misinterpretation of the law of demand; it kills businesses.

Let’s review: the demand curve represents aggregated behavior of for a commodity: as price falls, additional customers appear, willing to pay the lower price.

Does dropping your price really help win that deal?

The demand curve correctly states assumes that value for your offer is different for each individual. Prospective customers compare any given price against perceived value. As price drops, demand increases when a customer who formerly perceived inadequate value now perceives a positive value from purchasing. Unfortunately, when you capture a sale from that marginal user who perceives borderline value, you simultaneously just trained all of your higher-value users to expect discounts.

While the perceived value of a product or service can – and is – often individual, it isn’t fixed. Value is a perception, and perceptions change. Perceptions of desirability of an outcome, adequacy of substitutes, and environmental/extraneous considerations change constantly. In fact, this is why the sales profession exists.

Drop your price without knowing your value? Stop it!

The demand curve assumes that your product or services is a “fungible” commodity: all units of the same product or service are identical replacements for each other.. That is, it assumes that you have no differentiation. This is ridiculous. For instance compare the price of a one ounce pure gold bar from a no-name mint vs. a one ounce Krugerrand. The demand function you learned in school ignores differentiating features, branding, distribution, availability, support/service, durability, etc. This was done so that the math works more easily. While there is some great advanced economics work that incorporates differentiation, you probably never learned about it. Pity.

Another way that the real world differs from economic models: Customers don’t have perfect information. When your customers don’t know about all alternatives, don’t fully understand value-in-use, or all the ways that your offer provides value to them and their company, they don’t make “economically efficient” decisions. Imagine a prospect who hasn’t figured out that ROI for a contemplated purchase is over 500%. Discounting isn’t the missing selling behavior…it just creates a discount-accustomed buyer. Or worse, makes them question any value which they had placed in the service. Worst of all, there was no reason to discount, and that every dollar of price drop came out of the seller’s profit line.

For these reasons, you should shift a marginal customer who perceives inadequate value to tip in your favor. This avoids the collateral damage to your existing customers willing to pay your existing price.

Your price isn’t just the effect, it’s the cause.

Your price isn’t just a cost figure a customer weighs against your offer’s value. Because of the confusing plethora of differentiation in the real world, consumers use price as an indicator of value. Your price declares your value — or your lack of it. Imagine: you are the incoming CEO of a company that outgrew its peers for decades at a price premium and without discounting before you entered the job. When you encourage sellers to start discounting to “win” deals, what do you think you’re doing to the brand?

My work on value and price

Bottom line: discounting to gain sales is only a smart choice if you, your marketing group, your customer service people, your product group, and your sellers are all powerless to grow customer perceptions of value. I help under-powered clients.

When I work with clients, we usually find that their offers are priced well below the customer’s true value. This doesn’t necessarily mean we raise prices, but almost always helps them see that discounting is merely shipping profit dollars out the door to their customers.

Don’t be “that guy”. Or “that woman”.

The only kind of value there is: customer-perceived value. It’s impossible to have value that the customer hasn’t validated yet…you don’t have value; just a value proposition. Customer-focused conversations and interactions which get your prospects to validate value is the difference.

I’m happy to help you on your journey to understand how you can capture the value your company earns in the form of pricing power. Comment below or reach out to me directly to discuss in more detail.

To your success!