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The Art of Negotiating Compensation

Posted October 27, 2021
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Everybody Is In Sales (No, Really)

You’ve probably heard the popular mantra “everybody is in sales” and that each aspect of business always carries an element of sales in it. Andres shared his views on the mantra at the start of our chat.
“I believe everyone is in sales, and so many different facets of what we do, regardless of your role, is in sales. However, it is always important to define sales appropriately. Sales isn’t one-sided or self-interested, particularly when it comes to sales known as enterprise sales. This field of sales happens to be more thoughtful, more empathetic. As such, any negotiation requires an understanding of what matters to the person you’re negotiating with. “What are their pain points? What are their goals? How can you help them to be more successful? How can you get them to want to be your champion?” everyone is in sales When you look at sales from this perspective, everyone is in sales regardless of what you do. Throughout your career, beginning with the company that recruited you, you will be selling them on the value you may bring to them. Then, once you’re onboarded, you’ll be selling them on the various resources you need to succeed in the role you fill. Getting them to see your contribution is yet another element of sales. “And then you might feel you warrant a promotion or even a compensation increase. Of course, that comes with an element of sales. And when you’re hiring other people to join your team, you have to sell them on that vision and that dream. You could even apply it to your personal life, right? I have two kids, and I can tell you that being a parent is a lot of sales, like when I want to get my kids to do something.” Those who wish to climb the career ladder rapidly should focus on establishing relationships and understand that those relationships are the key to negotiating resources.

Tactics Matter

Andres has had to rely on his negotiation skills heavily in his current role leading a business unit at Wunderkind. “I’m in a unique situation. I suppose you can say that I’m the GM of a business unit that was not the company’s core business. After the acquisition, you’re kind of the black sheep because your product wasn’t part of the company’s initial mission. So, you need to go in there and negotiate for resources and sell the management on your vision for this business unit. I’ll be honest with you; it isn’t easy. It’s a lot easier now. Fortunately, we have great people in place, and we’ve done a great job growing this business unit. It now contributes about 20% of the company’s revenue, which is meaningful.” Andres also reminisced on one of the most unusual negotiations he’s ever been involved in. “I’ve also had examples of really crazy negotiations that happened in a previous company that I co-founded. We wanted the Twitter handle of the company name, but it was already held by this lawyer in Venezuela that had a farm. How much is a Twitter handle worth? In a situation where there’s no good sense of pricing, it’s terrific for you to come out first with a number. I anchored them at $1,000. When you’re working with a very vague value exchange, throw a number out.”

Top Tips From a Proven Negotiator

Andres believes that you should never negotiate with anyone until you’ve built trust and rapport. Also, don’t make guesses or assumptions. Take all the time you need to explicitly ask them what matters most to them. At the same time, don’t negotiate until the time you’re able to effectively communicate how you can help them. “You shouldn’t enter a negotiation until you’ve built trust and rapport with whomever you’re negotiating with. Don’t guess or even assume what matters to them. You should explicitly ask and know what matters to them. At that point, it’s safe to go into a negotiation.” On the flip side, it’s important not to have a zero-sum mentality as Andres asserts. “There is no winner or loser in a negotiation. Both parties should feel good leaving that negotiation. It’s part of the journey of forming a partnership, and chances are you’re going to be continuing to work with this individual. top negotiation tips “For instance, if it’s a compensation negotiation, you should also consider how the other party in the negotiation will, in the long run, perceive the outcome. You ought to conduct yourself with integrity and class. Let the other party know why you value them. In turn, this will make your ‘no’s’ and pushback feel more authentic, reasonable, and realistic. They will be able to understand how much you value them, which makes the fact that you still can’t concede something more impactful. This will make them effortlessly realize why that’s the case.” When you’re negotiating an increase in salary, it’s important to understand that people talk and a coworker will probably hear that you were given an increase. Arming your boss with metrics tied to your performance will make it easier for them to defend their decision to someone who doesn’t understand why they haven’t been given a similar increase. Let’s say a key project translated into $3 million in additional uncovered pipeline for the sales team. Keeping track of these key outcomes is essential for career growth (and looks great on a LinkedIn profile). Additionally, take your time to create a sense that there are other career options out there without being threatening. Having options also doesn’t hurt your confidence. “You want to create a sense of FOMO, like a hint at what would happen if we don’t arrive at an agreement.” Andres also offered his insights on the popular misconception that people should throw out a much higher number than where they want to land. “I’m personally, diabolically opposed to that school of thought. I think if you ultimately want to end up at 50, and then you support it and defend it. What happens when you start at 80, and it gets beaten down to 50 the other party will say, ‘Wait a second. You accepted 50. Why did you start at 80?’ It’s not a good look.” Finally, make sure to prepare multiple talking points before you begin negotiations. When you are negotiating around a single objective, there is less flexibility. “Oftentimes, there is more flexibility around variable compensation or even equity than a base salary. Ideally, you want to come to the table offering multiple levers that can be pulled to make sure everyone can walk away happy with the outcome.”
For more on the art of negotiation, listen to the full Revenue Marketing Report episode at the top of the article or anywhere you podcast.

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