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6 STRATEGIES TO STAY AHEAD OF AN IMPORTANT PROCUREMENT TREND

The latest issue Supply Chain Management reports that one of the most important procurement trends of 2017 will be greater supplier collaboration. They point out that as more companies automate tactical procurement activities, procurement professionals will use it to drive more value from suppliers.

Do you want to get ahead of this trend? Then pay attention to how you negotiate, because it’s the most efficient and effective way to drive value and collaborate. All you need to do is leverage these six strategies:

1. EMPATHIZE WITH YOUR NEGOTIATION PARTNER.

The best negotiators never view their negotiation partner as an adversary. Instead, they make their partner feel glad he’s working with them. Here’s how they achieve this:

They strategically focus on common ground. This can be achieved by repeating statements such as “I want to reiterate that we agree on point a, b, c and d, and look forward to coming to an agreement on point e.” This helps eliminate conflict, recognizes what you’ve achieved together and points out how close you are to reaching a deal.

They regularly emphasize the positive with statements such as, “We’d really love to do business with you; you’d be great to work with.” However, they still hold their ground in negotiation; they just take every opportunity to build up their negotiation partner.

They avoid statements that increase tension or skepticism.These include phrases that imply they’re better, such as “I am a veteran of this industry”, or “We thought this through and have done our homework.” The first statement suggests that the other party is an amateur, and the second they’re not prepared.

2. FOCUS ON THE PRESSURE THAT’S ON YOUR NEGOTIATION PARTNER AND THEIR ORGANIZATION.

If you must, postpone negotiation until you’ve done the research to find out. Colleagues and coworkers can offer insight, and social media has made research easier than ever. For instance, you can use LinkedIn to identify details such as:

Their responsibilities, so you have a better idea of what they care about most.

Their primary competition. Who are they most connected to?

Civic affiliations and hobbies. These can be potential topics of conversation.

Recent job changes or job hopping. That can point to a higher desire to make the deal work.

Employment patterns at the organization. Layoffs or leadership changes, for instance, could point to financial issues and a greater need for your business.

3. GAUGE THEIR PAST PERFORMANCE.

Ask internal stakeholders about what they think of the vendor. Did they deliver on time? Was their customer service acceptable? Did they honor the fine print? Evaluate their performance and gather what you need to “throw junk.” That is, point out negatives to gain the negotiation advantage.

However, every time you throw junk, try to soften it with something positive. Again, statements such as “We do look forward to working with you” can go a long way in moving the negotiation forward and building rapport, even after a negative exchange.

4. NIBBLE, NIBBLE, NIBBLE.

This is one of the effective ways to drive more value from a supplier. Right when they think they’re on the verge of closing the sale, ask for something more. This could be free shipping, better payment terms, expedited delivery, and promotional items. Just a little something extra to sweeten the deal. Turn to your internal stakeholders to find out what extra service they would most value.

5. USE COMPETITORS AS LEVERAGE.

Monitor the competition to find out what additional value they’re providing and be sure to mention it. After all, the vendor may offer the same to keep your business. You never want to let suppliers get too comfortable, no matter how long you’ve been doing business together.

6. BE A STRONG NEGOTIATOR.

While it may seem counter-intuitive, the best way to enhance long-term collaboration is to make your negotiation partner work for your business. A recent Harvard Business Review article cited a study that found negotiators who took longer to reach an agreement were far more satisfied than those whose offers were immediately accepted even if they received a better outcome.

Do you want more advice that can move procurement forward in 2017? Take a minute to check out Do Your Homework: 8 Smart Steps Procurement Pros Take to Maximize Negotiation Power.

Tagged With: negotiation strategies and techniques