Here is Supernegotiate's ⚡first post for 2023 👋! And I am going more niche in Negotiations because I love it ❤️.
I have been reading about sales training that is being given to all the sales managers annually, and there are about four or five techniques that I have seen are recurring ones which you and I, as buyers, use in every negotiation. Still, this is a surprise or highly effective.
But on the other side, the sellers are already expecting these tools or tricks to be used against them, so there's hardly any effect. So what are those techniques is the topic of this article.
Let's get started with SuperNegotiate.
1.) First, they will try to land the first quotation as a feeler technique.
In very simple terms, the first quotation that the seller gives to a buyer is not a serious one, but rather a feeler to judge the buyer, how well the buyer is prepared, whether the buyer knows about the markets, the market share, the crisis prices, et cetera, et cetera.
There are some buyers who would jump into the price negotiation, and that's what I'm telling you not to do. Do not make the first quotation all about the prices. Worse you can do is not to be prepared about the prices you are talking about and yet ask for 30% or 40% or 60% discounts. Don't do that because it shows your weaknesses, and it spoils every aspect of the negotiation for round two or round three.
So what can you do as a buyer? Gauge the supplier, look for the information that he's asking from you and then give that information but selectively, such as do you want to disclose how urgent your requirement is? So do you want to prioritize urgency, or do you want to prioritize price?
Second, do you want to indicate to the seller that you can actually consider the introduction of the new suppliers, or are you doing a favour, or are you going to work hand in hand with your incumbent supplier to make sure they retain their business share?
Now, these are the insights that your suppliers are expecting, and you can selectively give pointers in the first round so that the sellers take you more seriously. So the first quotation is not about the price.
2.) That brings me to the second portion of it, which is sellers know that you are going to compare them with other suppliers in a spreadsheet.
Why am I mentioning the spreadsheet? Because I have a theory around it. Every supplier will try to make my solution extremely different or much more advanced than my competitor’s. So you cannot compare apples and oranges, et cetera, et cetera, at the end of the day. So they will try to make the whole negotiation process about value enhancement or the business value. You should evaluate me as a package rather than comparing me on BOQ or item level with my other competitor.
They are going to make the whole negotiation solution about that aspect. In many cases, you will ask the suppliers to explain the proposals or the product they are offering. And at that stage, you have to ensure that your business audience is not getting influenced and you are able to, let's say, deflect again, I'm using the first word, but you are able to deflect the opinion of. At the end of the day, you are going to compare them on apple to apple basis with the other suppliers. That's the point, number two.
So make sure you point out the suppliers directly that I am going to compare you with the second competitor or the third competitor. They will try very hard to make it as a value-based evaluation rather than a unit price evaluation. So control that narrative as a buyer from the starting itself.
3.) That brings me to the third aspect, which is about the Communication cutoff.
At a tender stage or an RFP stage, or let's say at any given stage, sellers know that the procurement is going to cut off, but they will issue outa notice or an email telling the supplier not to contact the business team or anyone else for that matter. In the whole organization, this is a standard protocol. Do suppliers go from RFP or from Sourcing event one to Sourcing event two?
In between, they are free to work on their network. But whenever the Sourcing event is happening, somehow procurement will ask them not to contact anyone. All right? They know this is going to happen. So what they will do is, before there are two stages, before they send their proposal, they will try to widen up their network. They will try to speak to the business team. And this is a standard training pack for every supplier that is being given to them as part of their sales training to widen there or broaden their network. They will talk to the business team; they will speak to the technology team, the finance team, the warehousing team, everyone, and then procurement.
So whenever that sort of gag order is issued by Procurement, do not contact anyone else; then they will try to stretch their wings again to see how serious that order is. So they will continue to interact and see how tightly controlled that process is. All right? The point I'm making is that they are expecting at a particular stage of the sourcing process. i.e. Procurement will issue this notice, do not contact anyone. They are trained to contact or broaden their network before procurement can issue it.
That's one. And second, whenever that issue is out, or the notice is out that sellers are not allowed to contact anyone, they would try to test it. How severe or serious are your controls?
Somehow these notices are taken as a box exercise. The buyers don't actually mean it. Second, the organization is not able to detect because of the complexity, because of the silos, and so on and so forth. And sellers are already in the organisation for more in-depth than, let's say, a buyer. It makes it even worse if there is a new buyer who has no network in the organisation. But the account manager of the supplier is very experienced, trying to set up those relationships for many, many years.
So you, as a buyer, if you are issuing out an order to the suppliers, don't contact anybody; make sure people report to you whenever such contact is made.
And then, which is the most important part here, and then you take action against that supplier whenever that contact is established. If you are doing just taking a box exercise, they are not going to take this gag order seriously. So take care of that.
Thank you.
Extra Post:
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