This is not as harsh as it may sound. Economic uncertainty has taught customers to push hard on price and terms, and even relatively receptive buyers use aggressive negotiation techniques. Negotiation Styles - Negotiation styles vary depending on the relationship that a procurement professional has with their supplier. They recognize Seller 101 and if they feel they are being manipulated, they’re going to put up the walls. They want to know the pricing model, and they’re curious about where they can poke holes. But, they are not enough. This keeps the vendor guessing and vendors are then often forced to renegotiate the deal late in the game when the clock is ticking to get it done. Negotiating with Procurement inevitably creates tension and stress, especially when price, terms & conditions are discussed. For more information, check out our privacy policy. Listen to your customer. 4 hours to complete. We can show you how to avoid being squeezed on price and losing deals from being 'commoditized'. Time is never your friend in sales: While your winning proposal sits in Procurement, a competitor could come in and take the order, the customer’s company might be acquired, your sponsor could get fired or quit, or other priorities could pop up that steal your funding. Post Negotiation 9m. be like Captain Scott – explore. #cat. The following are illustrative examples of negotiation tactics. Instill Urgency (Again) The decision maker clearly understands why having this solution is important … Counter-tactic: Employ a value-based selling approach that quantifies the overall value of your solution and presents a total solution that can’t be dismantled into component pieces and commoditized. Week 4. Negotiation is not just about price, but about managing and improving overall supplier performance. #tech. Take control of the deal here just like you did during the initial sales conversations. Profile the Supplier’s Negotiating Team Personnel. You can use it as a practical tool to re-frame your discussions with Procurement and get the outcome you want. Trained, empowered, and incentivized by their leadership, procurement teams have harnessed the dark side of negotiation for the sole purpose of pushing prices as low as possible. Business negotiation can make or break a crucial contract deal. Five Negotiation Tips That You Can Learn From Childre 20m. They don’t want to get surprised by a business unit leader making a business decision that undermines or supersedes the procurement process. Is there anything that might prevent us from hitting that date?”. The buy-side negotiator must be aware of all the tactics in use and prepare counter-tactics for implementation before and during negotiation. While negotiation is serious business, humour is a catalyst to our learning. Those are all necessary components of negotiation preparation. Procurement's goal is to demystify your value proposition so that they can then compare prices among vendors. Understand and demonstrate how to create value in your proposals that don’t only focus on price. 1. Build those goals into your pursuit plan. Procurement Goal: Procurement would like to control every aspect of the sale so they can avoid surprises and do an apples-to-apples comparison with your competition. If you focus on value and customer needs early in the sales process, negotiating becomes much easier. Sales professionals who know the art and science of negotiation can make a tremendous difference to your bottom line. We're committed to your privacy. Economic uncertainty has taught customers to push hard on price and terms, and even relatively receptive buyers use aggressive negotiation techniques. Stay up to date with the latest marketing, sales, and service tips and news. Negotiation can be as simple as trying to obtain a discount on a case of safety gloves through to the complexities of major capital purchases. Procurement’s tactics, along with suppliers feeling pressured to win the deal, can cause suppliers to acquiesce to many buyer demands without creating clear consequences and educating the buyer about value and risk. We typically have more power in this situation than we may give ourselves credit for. Return the focus of the sales negotiation to the deal at hand and the overall value proposition your solution is bringing to the business. Purchasing Negotiation 3 Requirements for Success in Supplier Negotiations. Poor sales negotiating may be costing you as much as 50% of your net profit. Procurement Tactic: Deflect or discredit your value proposition Negotiating with Procurement can be challenging. Develop strong customer coaches and present a compelling business case for your solution. 3 readings. The good guy/bad guy selling strategy is widely used in sales. Let’s take a look at this from both sides of the fence. Win-Win - This model outlines the four potential outcomes of any negotiation. When a buyer comes to the negotiation in partner mode, it allows you to work collaboratively to create possibilities that expand the pie and result in the best possible agreement for both sides. Strategise and prioritise your concessions and their trade value. One person is on … Procurement Goal:  Procurement often attempts to discredit or decouple all of the value you have worked so hard to build with the business unit buyer. “Ask about pain points. This subtle reframing tactic, which treats your arousal as a plus rather than a minus, actually increases authentic feelings of excitement—and improves subsequent performance in negotiation, Brooks has found in her research. Map out a time line for the decision process and ask the customer to respond to the schedule. Good negotiators have the ability to recognize the negotiation tactics and style of the other party. For instance, the best purchasing agents would agree on a price and then ask for a reduction for prompt payments and or prepayments of invoices. Negotiation with Procurement: Holden Advisors Announces Sales Negotiation Program for “The New Normal” Share Article. Use these following questions to determine Procurement’s role and priorities: If you’re unable to get a meeting with Procurement, ask your contact to outline the steps and approximate timelines necessary to get an agreement approved. Asking is not confirming that you can do it. In fact, if we’re outraged by a price we try to hide it to save face rather than call it out. For sellers, the impact on average price can be as much as 5%, which in turn can represent up to 50% of net profits. Counter-tactic: Build stronger relationships with the business unit buyer in the first place. To truly understand procurement, you’ve got to understand the world from which they come. It is thus important for procurement or purchasing professionals to be creative when negotiating in a business setting. Conversely if you’re a sales person I’m going to… Read More. Negotiation for Procurement Professionals-Jonathan O'Brien 2016-10-03 Highly effective negotiation skills are an essential element of a purchasing professional's toolkit. Procurement Goal: Procurement would like to have as much ammunition as possible in their arsenal to use against vendors in an effort to drive down prices and negotiate a commodity deal. If you want them to prioritize your deal, make sure they’re aware of the decision maker’s timeline and expectations. He oversees all client engagements as well as serves as a senior facilitator on sales management, coaching, negotiation and sales training workshops. Yet some sellers are still winning at high margins and doing so while strengthening customer relationships. Let me know in the comments, which one you like most. Get into their head … Not only are they expert negotiators, they’re trained to drive down costs and get discounts. 1. Our company has set the standard for procurement negotiating training for … For sellers, the impact on average price can be as much as 5%, which in turn can represent up to 50% of net profits. You might ask the business stakeholder, “We’d like to learn more about Procurement’s evaluation criteria. Successful salespeople treat procurement negotiations like another stage in the sales process. Analyze your sales negotiation tactics. Your contract usually goes to the bottom of their pile, where it sits … and sits … and sits, while you get frustrated and are forced to push out the expected close date. Free and premium plans, Sales CRM software. Negotiation Ploys - Negotiation ploys/tactics are often used but can be subject to risks. With purchasing departments and procurement becoming involved in more and more sales, buyers are constantly pushing to do more for less and negotiate the most favorable terms. If you can't see the video thumbnail below, click here to watch the video. Remember that there are typically better ways of meeting your goals, such as building trust, asking lots of questions, and exploring differences. Our unique Sales Negotiation Training turns the tide by allowing sales professionals to exceed targets, while strengthening key relationships. But Procurement also works to mitigate risk, make sure suppliers are operating ethically and professionally, screen out suppliers who aren’t fiscally stable, and project a return on strategic investments. No matter if you’re in sales or in strategic procurement and do it for a living. Can you help set up a meeting with them?”. Your time with procurement shouldn’t be a negotiating event, but rather an extension of the negotiation process you’ve been executing from the start of the sale. #snake. Consider a pre-emptive strike to disclose negative information so that you are in control of the discussion. Prepare a list of questions to ask your ‘opponent’. When the business stakeholder tells you, “We like your solution and will send the proposal to Procurement,” what’s your reaction? However, those procurement professionals who excel at negotiation don’t make this mistake. For instance, if the prospect’s company has had several issues with unethical suppliers, you should highlight your organization’s perfect track record in that area. Business negotiation strategies require breaking the problem into smaller parts, considering unusual deal terms, and having your team to brainstorm new ideas. Below are five common negotiating tactics used by Procurement and their business goals together with corresponding counter-tactics you can use in response. Solve problems. Counter-tactic: Be proactive. To do that, we’ll need to finalize the contract by [Z date}. Here we explore 14 common adversarial negotiation tactics you might encounter in the course of closing a sale and provide strategies on how to deal with adversarial negotiators. #marriage. Win-Win - This model outlines the four potential outcomes of any negotiation. Today, negotiation is almost a lost art.Most of us see a price and expect to pay it. Sales Negotiations: Selling to Procurement and Purchasing The battlefield of B2B sales has witnessed a crushing wave of fear and intimidation over the last two decades. Get into their head and swim around. They’re experienced and they know all the tactics sellers use. If a “Bad Cop” is introduced late in the game, attempt to determine their position and interests, and refer back to the agreements and decisions that have already been made with the “Good Cop.” Procurement wants to keep all of the vendors in the game as long as possible in order to provide leverage against the competition – so remember that they want us there. But, they are not enough. In this post we look at developing a strategy for supplier negotiations, so that you can improve the results and the relationship with the supplier. I wrote this guide to help you understand the complexities of negotiating with Procurement professionals during a sales cycle. Procurement Goal: Procurement would like to keep the power and leverage on their side, and they can do this by presenting additional decision makers or hoops to jump through late in the process. Business ( or person ) brought about by your solution goes to waste because you moved on before deal. 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