Getting & Using Information In A Negotiation
PurchTips edition #276
By Charles Dominick, SPSM, SPSM2, SPSM3
How Can You Get Valuable Negotiation Information?
Information is often the key to success in a negotiation. Here are three tips for obtaining and using valuable information in a negotiation:
- Ask "Why not?" When you request concessions from a supplier in a negotiation, a supplier will often say "We can't do that." Junior negotiators may simply accept that and stop pushing. However, the question "why not?" may unlock the door to an opportunity to get what you want. Imagine the supplier responding with answers like "Because we only offer that price on orders of 500 pieces or more and you are only purchasing 499 pieces" or "Because our CEO needs to sign off on deals where the discount exceeds 20%" or "I've offered you a 15% discount, you are asking for a 25% discount, and we have a 'most favored nations' clause in a contract with our biggest customer that prevents us from giving anyone else more than their 20% discount." Responses like these reveal how you can achieve better negotiation results. But you'd never know that unless you asked "why not?"
- Ask "What would you do?" Again, imagine a supplier resisting your demands. You can describe to the supplier a situation where you are trying to decide between multiple suppliers and one supplier (meaning the supplier you are speaking with) won't improve its proposed terms. Then, ask the supplier "What would you do if you were me?" The supplier will not likely say "I would just do business with the other supplier" (meaning their competitor). Instead, they may volunteer an alternate approach to making the deal more palatable, such as suggesting to ask the supplier for improvements in warranty or a rebate or free value-added services - ideas that have value to your organization.
- Don't talk too much. When many of us think of negotiation, we think of using words to overpower our counterpart and convincing them to agree to our terms. However, as you've seen from the two preceding tips, concessions are often achieved when you let the supplier do the talking. Sometimes, it is best to just shut your mouth and listen.
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