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. Start early, sell wide and deep within the business unit. Negotiating with Procurement can be challenging. He oversees all client engagements as well as serves as a senior facilitator on sales management, coaching, negotiation and sales training workshops. “Ask about pain points. Procurement Auctions . Procurement's goal is to demystify your value proposition so that they can then compare prices among vendors. Failing to take control of this process is far riskier. 4. 1 video (Total 9 min), 3 readings, 3 quizzes. Though context matters, there are seven rules of sales negotiation common to all sales situations that will guide you on your journey to mastering sales negotiation skills. To do that, we’ll need to finalize the contract by [Z date}. Procurement Goal: As we discussed, Procurement would like to control all aspects of the deal, including who you can speak to. There may be several logical reasons for a supplier to reduce his price: ordering early, being eligible for a multiple-product-purchase discount, etc. 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. #snake. What are the best strategies for successfully leading a sales negotiation? Develop strong customer coaches and present a compelling business case for your solution. If you can't see the video thumbnail below, click here to watch the video. Week. Successful salespeople treat procurement negotiations like another stage in the sales process. If you focus on value and customer needs early in the sales process, negotiating becomes much easier. Negotiating with Procurement can be challenging. The next time you find yourself locked in a battle for your way, here are 13 important strategies that you can use in a challenging negotiation. Other companies may use a procurement strategy of using a core purchasing cycle. Anticipate issues and concerns that may come up and have your responses prepared. 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. Tactic #1: Don't Use All of Your Ammunition at Once. Is there anything that might prevent us from hitting that date?”. When the business stakeholder tells you, “We like your solution and will send the proposal to Procurement,” what’s your reaction? Procurement worked closely with a team from finance, which created detailed models to determine a price range that would let the supplier generate returns of 15% on invested capital. Purchasing Negotiation 3 Requirements for Success in Supplier Negotiations. Negotiation Styles - Negotiation styles vary depending on the relationship that a procurement professional has with their supplier. Prepare a list of questions to ask your ‘opponent’. 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. The Art of Negotiating ® for Procurement provides professional purchasers with negotiating techniques to optimize agreements, logistics, and productivity—with measurable gains to the bottom line. 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. This is where they order from a group of regular vendors and use outsourcing procurement for their larger and ad hoc purchases. Negotiation for Procurement Professionals-Jonathan O'Brien 2016-10-03 Highly effective negotiation skills are an essential element of a purchasing professional's toolkit. Written by Ray Makela Our unique Sales Negotiation Training turns the tide by allowing sales professionals to exceed targets, while strengthening key relationships. A real example. #charmer. Let me know in the comments, which one you like most. Demonstrate why you’re a good partner to work with for the long term. The hard selling negotiation tactic . Negotiation Tactics 50m. You’ll find them in Negotiating with Backbone, Second Edition. Ultimately, what the customer values is the outcome to their business (or person) brought about by your solution. They might need to check your organization’s insurance, speak with customer references, run background checks on your employees, perform due diligence, build a business case, and/or run your proposal through an ROI calculator. Free and premium plans, Customer service software. If you find that you are responding to an RFP and you don’t have any other business relationships within the organization, you should seriously consider your chances of success in this deal. So we hope you reflect back on your comical and more tense moments while laughing at our business negotiation cartoons. Free and premium plans, Content management system software. Conversely if you’re a sales person I’m going to… Read More. Post Negotiation 9m. How to Negotiate With A Liar 20m. Map out a time line for the decision process and ask the customer to respond to the schedule. 1. I hope that you have enjoyed the article “Negotiating Tactics You Can Use Today.” Don’t miss updates on Procurement & Supply Chain, Subscribe here! Procurement Goal: Procurement often attempts to... 2. Procurement’s primary focus is … We often hear from our clients about the challenges they have these day negotiating with Procurement. Privacy Policy, Five Sales Negotiation Tactics to Use with Procurement. 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. If you have a good relationship with your point-of-contact, it’s a good idea to include them in this meeting as well. Prepare to be discredited. Negotiation Ploys - Negotiation ploys/tactics are often used but can be subject to risks. However, it is possible to partner with -- rather than battle -- Procurement. Many salespeople go on cruise control as soon as their main sponsor gives them the green-light. Think it’s risky to prepare materials before you know if they’ll be necessary? These 5 negotiation tactics can help to improve the results of your very next deal. Today, negotiation is almost a lost art.Most of us see a price and expect to pay it. Ask as many open questions as you can to understand what they want, their situation, and their needs. Yet Procurement often isn’t on the same page. So what can sales professionals do to avoid having their solutions commoditized? Our negotiation training programs are fun, despite being packed with useful practical lessons. Discuss how your company’s values align with the customer’s values. This is not as harsh as it may sound. 10 Common Hard-Bargaining Tactics & Negotiation Skills. This procurement executive conceded that the sales group was far more prepared for the negotiation than was his own team. HubSpot uses the information you provide to us to contact you about our relevant content, products, and services. Remember, you are selling a solution that will help your customer accomplish their business objectives – don’t let this get diminished or commoditized by an overzealous procurement department. Request a meeting with them relatively early on. Document this in an email and send it to all parties involved. Negotiation with Procurement: Holden Advisors Announces Sales Negotiation Program for “The New Normal” Share Article. 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. 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. If they know your solution will save them lots of money, they’re less likely to delay. This seminar has gained significant importance with the rise of increasingly well-trained sales agents, with purchasers finding it increasingly difficult to negotiate deals with their suppliers. Free and premium plans, Sales CRM software. Persuade and convince decision makers to sign up and buy. Handle tough objections thrown by procurement team. Yes, getting the best possible price is a major objective. Because indifference is defined as having a lack of sympathy, interest, or concern, you might think it sounds wrong or contradictory that this should be an effective sales tool. Pricing, sales and finance leadership across all industries are engaging in challenging negotiations with highly trained procurement professionals. Consider a pre-emptive strike to disclose negative information so that you are in control of the discussion. Procurement Tactic: Limit access to … Yet, as a sales professional, no matter your industry, product, service, or the complexity of your sale, you are going to have to negotiate with stakeholders. 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. To make it through the black hole with your deal intact, follow these guidelines. Procurement hates surprises. The buy-side negotiator must be aware of all the tactics in use and prepare counter-tactics for implementation before and during negotiation. Business negotiators must make certain that they have an astute understanding of the facts as the basis for both sales and procurement negotiations. There may be several logical reasons for a supplier to reduce his price: ordering early, being eligible for a multiple-product-purchase discount, etc. #support. They recognize Seller 101 and if they feel they are being manipulated, they’re going to put up the walls. The problem is, your apples are different and you need to convince the business unit buyer of this in the first place or you will never get past the comparison spreadsheet. Think about Procurement’s goals and how you can help them accomplish those, just like you’d do with a traditional stakeholder. Salespeople usually discover what Procurement needs when they get an urgent request. In fact, if we’re outraged by a price we try to hide it to save face rather than call it out. #negotiation. Can you help set up a meeting with them?”. Five Areas That Will Improve Your Sales Negotiation Skills Think again. Build powerful negotiation skills and become a better dealmaker and leader. Below are five common negotiating tactics used by Procurement and their business goals together with corresponding counter-tactics you can use in response. For sellers? Let’s dig a little deeper into the role of Procurement, and understand what they are trying to accomplish. However, those procurement professionals who excel at negotiation don’t make this mistake. Negotiate with buyers or procurement team before sales can be closed. Whack Back. Don’t leave these items up to chance or be at the mercy of Procurement to drive the process. When preparing for a negotiation, it is common to identify the issues to be negotiated, decide on negotiating tactics to use on your supplier, think through what your supplier may say and practice saying the words you’ll use during the negotiation. Now that you have the list of who will probably … They can be tricky. In this video, you'll learn five sales negotiation tactics you can use when negotiating with Procurement. Win-Win - This model outlines the four potential outcomes of any negotiation. This is no surprise. Blind RFP responses seldom produce desirable results for the responding party. @rayamakela. By understanding Procurement's objectives… 4. For sellers, the impact on average price can be as much as 5%, which in turn can represent up to 50% of net profits. • Dealing with third party negotiators • Blind RFP’s • Reverse auctions • Commodity pricing • Hardball sales negotiating tactics Sales negotiations with Procurement is an ongoing struggle: 3. That model shouldn't apply to the procurement world. Procurement Tactic: Commoditize and control responses Marketing automation software. Your choice depends on several factors such as type of product and sales priorities. You might tell Procurement, “We need to kick off the project by [date and time] so [stakeholders, team, department, company] can hit [X goal]. 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 Tactic: Deflect or discredit your value proposition After Action Review (AAR) Process 20m. That leads me to my second suggestion. Procurement would like to focus on discrete units instead of the overall deal so that they can compare least common denominator pricing and get the “best” deal. be like Captain Scott – explore. Those are all necessary components of negotiation preparation. In this video, you'll learn five sales negotiation tactics you can use when negotiating with Procurement. Get into their head and swim around. 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. Ray has over 20 years of management, consulting, and sales experience and writes frequently on best practices for coaching and developing sales teams. Procurement Negotiation Training for Buyers and Supply Chain Professionals. Don’t wait until the proposal is finalized to speak with Procurement. Procurement is often a black hole for deals. Suppliers will often try to convince you that their first price reduction is a great deal that you should accept. Having everything Procurement needs sets you apart from the other vendors -- not only does it prove you’re invested in the deal, it also foreshadows how they’ll be treated as your customer. Negotiation Styles - Negotiation styles vary depending on the relationship that a procurement professional has with their supplier. Solve problems. If you want them to prioritize your deal, make sure they’re aware of the decision maker’s timeline and expectations. Problems faced by entrepreneurs, sales professionals and SMEs when negotiating with procurement. If you think, “Great, my job is done,” you’re committing a significant mistake. Yet some sellers are still winning at high margins and doing so while strengthening customer relationships. Negotiation is an underutilized, yet critical business skill that lies dormant within most organizations. Which tactics work best for buyers? Leverage inside and outside resources to help you get the lay of the land before Procurement puts a gag-order on the vendors. To change negotiation strategies not only requires different negotiation skills, but also requires subtle influencing. #marriage. These three easy negotiating tactics work! Like most negotiating experts, I strongly advocate preparation as one of the most important elements of a successful negotiation. To build a mutually beneficial, long-term relationship, reps must treat them as a key stakeholder in the opportunity. Build those goals into your pursuit plan. One person is on … There is little excuse for the procurement team not to spend some time reviewing the supplier’s company website in advance of the negotiation event. Understand the role of procurement/purchasing and how to develop rapport with limited contact. We're committed to your privacy. 1 video. Week 4. This course provides specific actionable negotiation strategies, as well as examples and tactics to refute even the most difficult procurement group. 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. 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