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What Are Your Suppliers Thinking When Negotiating With You?
There are several negotiating principles for purchasing managers.
From the supplier's side, "the key to negotiation is that you have
to start with a pretty wide spread," Knudsen shares. "If my goal is
to sell something for $20 a case and I open at $20, we don't have
negotiation room. Most sales professionals have something in their
'back pocket'."
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What can compel a salesperson to offer the better deal in her
"back pocket?" The goal of many salespeople is to earn more and
work less. That goal is best accomplished by working with
customers with long-term relationship potential. But that
doesn't mean that a purchasing manager's only
necessary negotiating tactic is to promise a long-term
relationship.
Salespeople are trained to identify whether a purchasing
negotiator is serious or bluffing. |
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Before negotiating, they consider the states of the purchaser's
company and the industry. While negotiating, they evaluate the
body language of the purchasing
manager.
Certain actions may signal a dishonest representation, such as:
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There are really two lessons to be learned with regard to body
language:
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1. The purchasing manager must be aware of her mannerisms, as
they may be being interpreted by the salesperson; and
2. The purchasing manager should also observe the salesperson's
body language |
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One of the things is that you should always take someone
into the sales call with you because they're observing while
you're trying to present.
Most purchasing managers try to (negotiate) one-on-one or
one-on-two and, therefore, fail to be as effective at observing
the supplier's body language.
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An indicator that the purchasing manager is interested in a
long-term relationship is the manner in which the purchasing
manager communicates. Purchasing managers often open a sales
call or a negotiating session with a phrase like "You have
five minutes, what do you got?" Knudsen identified that as
one of many "red flags" that positions the purchasing
manager as a "short timer" and compels the salesperson to
withhold better deals.
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One of the salesperson's objectives is to
get the purchasing manager to talk, but also "Most purchasing
managers should try to get the salesperson to talk more.
"By
learning about a salesperson's objectives, the purchasing manager
can uncover opportunities for good deals that the supplier is
withholding for potential long-term relationships or "reference
accounts."
Sometimes, salespeople are sent into a meeting with the
instructions: "Price is not an issue. Get the account."
But purchasing |
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managers risk never discovering that if they don't foster an
open dialogue. |
Purchasing managers are often reluctant to share information,
and Knudsen sees that as a barrier to their success in
negotiating. |
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The sharing of information is often important for a
salesperson to be able to go back to her management for approval
to offer a better deal.
Purchasing managers need to be proficient at distinguishing
good-intentioned salespeople from unscrupulous ones who are just
seeking a negotiating advantage.
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So, no single rule applies to the sharing of
information in a negotiating situation. The purchasing
manager has to make the decision that is right for the
specific circumstances.
More open communication may make some purchasing managers nervous as
some feel that developing a relationship plays to the salesperson's
advantage and to the purchasing manager's disadvantage. That does
not have to be the case. |
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By communicating openly, the purchasing manager can learn the
objectives of both the salesperson and the supplier and how a
win-win result can be achieved. And a relationship-building demeanor
has many times influenced Knudsen to believe in a higher probability
of a long-term relationship which gave him the "ammunition to go
back to my boss or my boss' boss or the company to help (the
purchasing manager's company)."
So, to summarize the negotiating principles :
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Salespeople often enter negotiating situations with
available improvements in their "back pockets."
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A significant motivator for salespeople to offer
improvements is the potential for a long-term
relationship.
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Skilled salespeople evaluate your body language as
well as your openness and friendliness in
communicating in determining the likelihood of a
long-term relationship and, therefore, how much
improvement to make to their offers.
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Purchasing managers should observe, or have a
colleague observe, suppliers' body language in
negotiating situations.
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By asking questions and getting a salesperson to
talk, you may uncover available opportunities for
better deals.
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Sharing information is critical to developing the
long-term relationships that result in good deals.
But you have to be careful to distinguish
good-intentioned sales people from unscrupulous ones
and share or withhold information as dictated by the
specific situation.
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The belief that developing a relationship plays to
the salesperson's advantage and to the purchasing
manager's disadvantage is a myth.
By having an open relationship, the purchasing
manager can learn a lot about the objectives of the
salesperson and the supplier and can be better
positioned to achieve better deals and a win-win
situation.
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A relationship-building demeanor on your part may
compel the salesperson to seek a better deal from
management
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Often the
deadlock develops , in course of negotiation , due
to the terrible presence of the element of taking
stand early on either side. It needs to be
resolved by drawing a bigger canvass keeping in view
a win-win solution
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