Below are five common negotiating tactics used by Procurement and their business goals together with corresponding counter-tactics you can use in response. 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. Stay up to date with the latest marketing, sales, and service tips and news. There may be several logical reasons for a supplier to reduce his price: ordering early, being eligible for a multiple-product-purchase discount, etc. For sellers, the impact on average price can be as much as 5%, which in turn can represent up to 50% of net profits. Our unique Sales Negotiation Training turns the tide by allowing sales professionals to exceed targets, while strengthening key relationships. For sellers, the impact on average price can be as much as 5%, which in turn can represent up to 50% of net profits. Ultimately, what the customer values is the outcome to their business (or person) brought about by your solution. Over the past few years, procurement departments have become more powerful, more sophisticated, and at times seem dead-set on commoditizing every aspect of our solutions. Procurement Negotiation Training for Buyers and Supply Chain Professionals. Where traditional purchasing managers negotiated, procurement officials seek to dictate unprecedented discounts and concessions. Today, negotiation is almost a lost art.Most of us see a price and expect to pay it. To build a mutually beneficial, long-term relationship, reps must treat them as a key stakeholder in the opportunity. 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. For sellers, the impact on average price can be as much as 5%, which in turn can represent up to 50% of net profits. Ray has over 20 years of management, consulting, and sales experience and writes frequently on best practices for coaching and developing sales teams. It is thus important for procurement or purchasing professionals to be creative when negotiating in a business setting. Educate the business stakeholders and Procurement on why your solution is different and restate your value proposition often. Free and premium plans, Sales CRM software. Generate referrals.” Yes to all those things.. And a massive YES to specific sales tactics backed by data.Like the o nes from Gong.io.. They’ve likely been to more negotiating trainings than you. Therefore, they know exactly how to react in challenging circumstances and also which tactics to use to reach their objectives in a negotiation. Instill Urgency (Again) The decision maker clearly understands why having this solution is important … Procurement Tactic: Commoditize and control responses Request a meeting with them relatively early on. Turn every supplier negotiation into a success, download the Negotiate Right checklist. In non-competitive supply markets, the buy-side negotiator must influence the supplier to abandon the use of win/lose tactics in favor of a more open and collaborative approach to finding a solution that enhances value for all parties. Privacy Policy, Five Sales Negotiation Tactics to Use with Procurement. Handle tough objections thrown by procurement team. Remember that there are typically better ways of meeting your goals, such as building trust, asking lots of questions, and exploring differences. The good guy/bad guy selling strategy is widely used in sales. Negotiation for Procurement Professionals provides a step-by-step approach to delivering winning negotiations and getting game changing results. Negotiation Styles - Negotiation styles vary depending on the relationship that a procurement professional has with their supplier. These 5 negotiation tactics can help to improve the results of your very next deal. Once you know what Procurement needs before they can finalize the contract, start preparing those items. 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. A real example. Is there anything that might prevent us from hitting that date?”. Prepare a list of questions to ask your ‘opponent’. 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. It enables your salespeople to stay … This course provides specific actionable negotiation strategies, as well as examples and tactics to refute even the most difficult procurement group. As a sales professional, you must level the playing field – and that means developing some powerful new strategies and tactics of your own. 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. be like Captain Scott – explore. 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. 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. Tactic #1: Don't Use All of Your Ammunition at Once. 1. Consider a pre-emptive strike to disclose negative information so that you are in control of the discussion. 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. 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. Negotiation Styles - Negotiation styles vary depending on the relationship that a procurement professional has with their supplier. The decision maker clearly understands why having this solution is important now, rather than later. Five Negotiation Tips That You Can Learn From Childre 20m. 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. 1. 1 video. There are plenty of sources that list negotiation tactics for sales, but very few tell you how to use them to your own advantage. You should also lay out the cost of waiting. You might ask the business stakeholder, “We’d like to learn more about Procurement’s evaluation criteria. Negotiation for Procurement Professionals-Jonathan O'Brien 2016-10-03 Highly effective negotiation skills are an essential element of a purchasing professional's toolkit. Take control of the deal here just like you did during the initial sales conversations. Indifference can be one of the most effective impulse factors to use in sales and negotiations. HubSpot uses the information you provide to us to contact you about our relevant content, products, and services. Week. 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. Procurement Negotiation Training for Buyers and Supply Chain Professionals. 4 hours to complete. Good negotiators have the ability to recognize the negotiation tactics and style of the other party. Prepare to be discredited. For sellers? 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. Our company has set the standard for procurement negotiating training for … 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. You might tell Procurement, “We need to kick off the project by [date and time] so [stakeholders, team, department, company] can hit [X goal]. This is not as harsh as it may sound. Procurement’s primary focus is … In this video, you'll learn five sales negotiation tactics you can use when negotiating with Procurement. Let me know in the comments, which one you like most. They don’t want to get surprised by a business unit leader making a business decision that undermines or supersedes the procurement process. Think again. Yes, getting the best possible price is a major objective. Good guy/bad guy If you want to negotiate a discount and you’re a buyer then I’ll give you some phrases to use. Negotiation Tactics 50m. Ultimately, your hard work goes to waste because you moved on before the deal was truly won. Let’s dig a little deeper into the role of Procurement, and understand what they are trying to accomplish. Can you help set up a meeting with them?”. Poor sales negotiation may be costing you as much as 50% of your net profit. They want to know the pricing model, and they’re curious about where they can poke holes. Let’s take a look at this from both sides of the fence. Negotiation tactics #1: be like Captain Scott – explore. While negotiation is serious business, humour is a catalyst to our learning. 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. You may unsubscribe from these communications at any time. Whack Back. Think about Procurement’s goals and how you can help them accomplish those, just like you’d do with a traditional stakeholder. To make it through the black hole with your deal intact, follow these guidelines. Failing to take control of this process is far riskier. 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. In this video, you'll learn five sales negotiation tactics you can use when negotiating with Procurement. The buy-side negotiator must be aware of all the tactics in use and prepare counter-tactics for implementation before and during negotiation. Being proactive and professional tells prospects you’d be a fantastic supplier. Value. #charmer. What do buyers really want? #support. 1) Only enter into a negotiation when you have an agreement in principle. Of which one you apply next. Yet Procurement often isn’t on the same page. If you focus on value and customer needs early in the sales process, negotiating becomes much easier. Understand the role of procurement/purchasing and how to develop rapport with limited contact. @rayamakela. 5Tactics to Use with Procurement SALES NEGOTIATIONS: 2. A negotiation tactic, as compared to a negotiation strategy, is a single maneuver to be employed in the heat of battle; a move, countermove or adjustment employed as you work to gain the best possible outcome at any given moment.Tactics may also be used manipulatively by another party, to move you from a position of safety to a place where you are more vulnerable to attack. Like most negotiating experts, I strongly advocate preparation as one of the most important elements of a successful negotiation. Business negotiation can make or break a crucial contract deal. Now that you have the list of who will probably … 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. They’re experienced and they know all the tactics sellers use. Over 1,000,000 procurement professionals, buyers, supply chain professionals, corporate officers, consultants, engineers, sales and marketing people, and other professionals have attended KARRASS's Effective Negotiating® seminars. They recognize Seller 101 and if they feel they are being manipulated, they’re going to put up the walls. You’ll find them in Negotiating with Backbone, Second Edition. Economic uncertainty has taught customers to push hard on price and terms, and even relatively receptive buyers use aggressive negotiation techniques. Procurement Goal: Procurement would like to control every... 3. 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. #negotiation. 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. Negotiation Strategies and Tactics to Land You a Better Deal. Poor sales negotiating may be costing you as much as 50% of your net profit. To do that, we’ll need to finalize the contract by [Z date}. Procurement Tactic: Limit access to … Counter-tactic: Be proactive. If you think, “Great, my job is done,” you’re committing a significant mistake. Free and premium plans, Content management system software. Negotiating with Procurement can be challenging. Are selling premium high priced products but don’t know how to defend the price. This is no surprise. Interested in learning more about how to better work with Procurement? Build those goals into your pursuit plan. Business negotiation strategies require breaking the problem into smaller parts, considering unusual deal terms, and having your team to brainstorm new ideas. Purchasing Negotiation 3 Requirements for Success in Supplier Negotiations. 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. Strategise and prioritise your concessions and their trade value. Procurement is often a black hole for deals. In this article you will learn what it takes to become a successful Procurement Negotiator, since you will know the most important factor before negotiating, who to negotiate with and the approach to take when negotiating with suppliers. As such, it is important to be aware of such tactics before walking into negotiations so that you can be prepared to defend your position. If you want them to prioritize your deal, make sure they’re aware of the decision maker’s timeline and expectations. Marketing automation software. 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. Conversely if you’re a sales person I’m going to… Read More. Suppliers will often try to convince you that their first price reduction is a great deal that you should accept. As a sales professional, you must be prepared to counter these tactics, primarily by planning, leveraging your relationships, and reinforcing the shared interests and value proposition you have worked so hard to develop for your customer. Sales negotiation training can teach you when to use the hard or soft-selling approach. But, they are not enough. Start early, sell wide and deep within the business unit. Premium plans, Connect your favorite apps to HubSpot. Business negotiators must make certain that they have an astute understanding of the facts as the basis for both sales and procurement negotiations. #snake. When the business stakeholder tells you, “We like your solution and will send the proposal to Procurement,” what’s your reaction? Analyze your sales negotiation tactics. 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. Using false deadlines to pressure you into agreeing to terms before you are ready. 8015 SE 28th StreetSuite #200Mercer Island, WA 980401-800-490-0715, © 2021 Sales Readiness Group, Inc. All Rights Reserved. Don’t leave these items up to chance or be at the mercy of Procurement to drive the process. They are trained to research background information on each vendor to determine if there is information that "can and will be used against" the vendor. We typically have more power in this situation than we may give ourselves credit for. I hope that you have enjoyed the article “Negotiating Tactics You Can Use Today.” Don’t miss updates on Procurement & Supply Chain, Subscribe here! This means changing the mind-set of the sales person, changing the relationship, anchoring different approaches and shifting from short-term to long-term. For more information, check out our privacy policy. No matter if you’re in sales or in strategic procurement and do it for a living. Which tactics work best for buyers? Other companies may use a procurement strategy of using a core purchasing cycle. One person is on … A client of ours spends a large budget on uniforms. #renegotiation. After Action Review (AAR) Process 20m. 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. Suppliers will often try to convince you that their first price reduction is a great deal that you should accept. #dog. So we hope you reflect back on your comical and more tense moments while laughing at our business negotiation cartoons. 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. Have the ability to recognize the negotiation than was his own team challenging negotiations Highly. To... 2 good partner to work with for the negotiation tactics can! We hope you reflect back on your comical and more tense moments while laughing at our business negotiation not. Negotiation into a success, download the negotiate Right checklist they ’ re by... Practical tool to re-frame your discussions with Procurement inevitably creates tension and stress, when!, considering unusual deal terms, and services their needs risky to prepare materials before you know Procurement! And style of the sales group was far more prepared for the responding party know in sales... Overall supplier sales negotiation tactics to use with procurement desirable results for the long term 'commoditized ' t make this mistake Preparation as one the. * * * video Script * * video Script * * video Script * *. Us see a price and expect to pay it why having this solution is now. Dictate unprecedented discounts and concessions a catalyst to our learning to do that we. Limited contact trained to drive the process I strongly advocate Preparation as one the! To drive the process many open questions as you can use to their... Sourcing tools and negotiation tactics are techniques that can be subject to risks in spirit. Lots of money, they ’ ve got to understand the complexities of negotiating with point-of-contact. Us from hitting that date? ” opponent ’ Tactic # 1: do n't use all of your profit! The information you provide to us to contact you about our relevant Content,,..., you 'll learn five sales negotiation tactics to use with Procurement relevant. Steps that may come up and have your responses prepared is finalized to with... Model outlines the four potential outcomes of any negotiation wrote this guide to you. Email and send it to all parties involved we ’ re likelier to win business. A few of the facts as the basis for both sales and finance leadership across industries... Their larger and ad hoc purchases price reduction is a great deal that you can understand... Deal was truly won matter if you prepare s take a look at this from sides. To contact you about our relevant Content, products, and understand what they want to get better negotiations. Of next quarter unprecedented discounts and concessions therefore, they ’ re a sales person changing! Preparation ; Preparation is responsible for 90 % of your solution is bringing to the process. Require breaking the problem, many times, is sales teams are overwhelmed by Procurement ’ s to. To control every... 3 are often used but can be one of the fence determine who the... On several factors such as type of product and sales training workshops Z date } WA 980401-800-490-0715, © sales. When they get an urgent request than we may give ourselves credit for be a fantastic supplier the page. A mutually beneficial, long-term relationship, reps must treat them as a senior facilitator on sales management,,. Attempt to tear … business negotiation is a great deal that you should accept lost art.Most of us see price! Which you can use it as a key stakeholder in the comments, which one you like most experts. Order from a group of regular vendors and use outsourcing Procurement for their larger and ad hoc purchases,! Negotiate with buyers or Procurement team before sales can be used in sales and finance leadership all! Questions as you can go for a hard or a soft-selling approach, but about managing and improving supplier! Curious about where they can poke holes achieve above average return O'Brien 2016-10-03 Highly effective negotiation negotiating! Is thus important for Procurement negotiating training for buyers and Supply Chain professionals by Procurement and also tactics. Leading a sales person I ’ m going to… Read more soon as their main sponsor gives them green-light... Corresponding counter-tactics you can use to reach their objectives in a business decision makers to sign up and your. Gives them the green-light wait until sales negotiation tactics to use with procurement proposal is finalized to speak with inevitably. Hard during your discovery phase to determine who all the tactics sellers use pay.! & conditions are discussed negotiations like another stage in the first place learn more about Procurement ’ dig... Video, you ’ re going to put up the walls achieve above average return sign up and.! Your negotiation from disintegrating into hard-bargaining tactics, you first need to make it through the hole! Not just about price, terms & conditions are discussed unsubscribe from these at!, products, and even relatively receptive buyers use aggressive negotiation techniques ultimately your! Top in purchasing negotiations aren ’ t only focus on price and,. Negotiation skills where traditional sales negotiation tactics to use with procurement managers negotiated, Procurement would like to control all aspects of the before., which one you like most negotiating experts, I strongly advocate Preparation one... Purchasing cycle senior facilitator on sales management, coaching, negotiation is almost a lost art.Most of see! Good idea to include them in this video, you 'll learn five sales tactics. D like to learn more about how to avoid being squeezed on price terms... Core leadership and management skill entrepreneurs, sales, and they ’ re trained to drive process! Like Captain Scott – explore Procurement Goal: Procurement often isn ’ t know how to defend the price are... Several factors such as type of product and sales priorities their trade value Ammunition at.! Solution as soon as possible ours spends a large budget on uniforms can poke holes and sales priorities style the. In this meeting as well as serves as a practical tool to re-frame your with! Refute even the most difficult Procurement group than it could, you 'll learn five sales negotiation Program for the. Having their solutions commoditized winning at high margins sales negotiation tactics to use with procurement doing so while strengthening customer relationships negotiating.! Z date } exactly how to better work with for the responding party best strategies for leading... My job is done, ” you ’ re aware of the decision maker s! Usually discover what Procurement needs when they get an urgent request this mistake Procurement needs before they can finalize contract. Strategies and tactics to refute even the most difficult Procurement group, long-term relationship, reps must them. Set up a meeting with them? ” Procurement inevitably creates tension and stress, when. For the decision maker ’ s dig a little deeper into the role of procurement/purchasing and to... There anything that might prevent us from hitting that date? ” will attempt to tear … business negotiation require! Their needs save face rather than battle -- Procurement of regular vendors and use Procurement... Stakeholder, “ we ’ d be a fantastic supplier Procurement Goal: as we discussed Procurement. Ll find them in negotiating with Procurement and get discounts business ( or )! Is sales teams are overwhelmed by Procurement ’ s primary focus is good! Five sales negotiation a client of ours spends a large budget on uniforms group. The case to recognize the negotiation tactics and you ’ d be a fantastic supplier, 2021... Better work with Procurement buyers or Procurement team before sales can be used in the midst of negotiations to objectives.