Procurement 21 April 2016
Ten top tips for negotiating with suppliers
Whether you’re negotiating software licenses or trying to get the best quote from a manufacturer, Red Sheet’s Jonathan Obrien outlined the most important things to keep at the back of your mind. (1) Decide what you need beforehand Knowing what you want from a negotiation before you start is imperative. Sometimes it is very clear, sometimes there could be several possible outcomes. But without an end goal, we risk putting ourselves in a decide on the spot? situation, finding we have been talked into things in the heat of the moment. (2) Do your homework Doing your homework about the industry, what you are trying to secure, the people involved and culture you are dealing with will enable you to understand where you may be able to leverage a better deal. (3) List your negotiables? We may be negotiating different aspects of value within the overall deal at the same time and working towards a final deal across all negotiables simultaneously. Negotiables might include: price, options, finance, delivery date or anything else that is important to you or the seller. For each, decide what your most desirable outcome (MDO) is and also the least desirable outcome (LDO) in other words the point that you will not go beyond. Write these down and don’t lose sight of them during the negotiation. (4) Have an alternative Without an alternative we can become desperate to make the deal and a well-trained negotiator could easily spot that. If we go into a negotiation armed with an alternative we will be braver, more confident and determined. There is always an alternative going elsewhere, holding off until another day, even walking away. Crucially, you must totally believe in your alternative if it is to impact how you negotiate. (5) Build rapport If we feel the other person likes us we will feel more inclined to make a deal. Most people who negotiate for a living, such as estate agents, make themselves super-likeable, and if we do the same it can help our position. Buyers frequently make the mistake of trying to remain aloof and cold. Instead smile, be warm and friendly, take time to be interested in them. You might be surprised how well this works. (6) Hide tell-tale emotion When we like something our body language can give it away; our expressions might become more interested or we might seem more animated or excited. But for the best outcome, hide any emotion that reveals just how much you might want the end result. (7) Beware of sneaky tactics what budget are you working to seems like a reasonable question that would help a negotiator focus on helping you, but these questions are designed to get you to reveal your position early on. Swerve the question and instead talk about the end result you want. Let the negotiator start discussions around price and what might be possible. If we can agree on this today I can do x? sounds like an imperative to close, but don’t be hasty unless you are happy with what is being proposed. Chances are good that the same deal will be there tomorrow. Finally, I will need to ask my superior? is a very common tactic. If the boss? isnt giving a favourable response, then ask to speak to them directly. don’t be fooled.