A leading educator in the field of business negotiating and influencing skills has interviewed a sample of successful procurement leaders to discover their most valued and effective negotiating tactic.
Giuseppe Conti, founder of the corporate education firm, Conti Advanced Learning, conducted the interviews. He believes that the resulting tactics are ‘must-knows’ for all professionals in procurement and supply chain jobs, including procurement and supply chain interims. They include:
- Be the first to make a proposal
Always arrive for the negotiation fully briefed about the market alternatives and use that know-how to peg conditions near to the bottom of the market offer. This reduces the amplitude of your Best Alternative To A Negotiated Agreement (BATNA) while leaving scope to improve the conditions by making and requesting concessions.
- Preparation, Target, Value
Three essential steps to follow at the start of any negotiation: know the market, have a ‘target range’ in mind and be clear about the value of the business in relation to the prospective suppliers under consideration.
- Understand your BATNA counterpart
Draw the interest of the person you are negotiating with by detailing the benefits of working with your company, and then let them talk freely about their aims, activities, and the challenges they foresee. Are they seeking volume, margin, market share, or a mix? With these objectives clarified, procurement pros can pinpoint where shared interests are, and mould the deal accordingly.
- Know your own key questions in advance
Three essential questions procurement pros need to ask themselves before negotiation begins are: “What needs to be achieved, why does your company need it, and how will it benefit the other party?” Good negotiators are firm and clear about their expectations but open about how they get there.
- Get them to love your vision and strategy
Good procurement pros are good salesmen, too. They need to make their strategy attractive to the supplier and use this to build a common vision toward a mutually favourable agreement.
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