I hope that you have enjoyed the article “How Expensive Suppliers Negotiate, Part II.”
As I mentioned last week, I keep coming across sales negotiation pieces that paint buyers as jerks for negotiating and that promote tactics to counteract procurement negotiation techniques. Today, I came across an interesting video on a sales negotiation site that I’ve mentioned before here, The Accidental Negotiator.
In the above-linked post, the interviewee, Brian Dietmeyer, says that the #1 technique that sales people face in negotiation situations is “I can get the same thing cheaper from your competitor.” Mr. Dietmeyer suggests countering this technique by pulling out data to demonstrate that the seller’s offer is indeed the best for the buyer.
Now, it appears that Mr. Dietmeyer would expect the buyer to look at the data, then wave the white flag and say “You’re right. You have the better deal. Where do I sign?”
Even if the seller’s deal is the best deal, there are plenty of ways to counter that. Like I said in my article, ask for more attractive pricing and terms anyway! Just a few of the responses that come to mind first are:
1. Say: “You may have the most attractive offer at this point in time. You may not. That’s immaterial. You made the short list and we are giving each supplier on the short list an opportunity to make their offers more attractive. If you feel that this offer can beat anything your competitors put forth, fine. Just send me something saying that the offer you’ve already submitted was your best and final. If you are correct, then you have nothing to worry about, right?”
2. Say that there are intangible factors you are considering, such as risk when bringing a new supplier on board. If you are taking more risk, you require a higher reward in the form of a lower cost offer. The current offer isn’t giving you the cushion you are looking for.
3. Turn the attention away from getting the price down to the competition’s level and towards getting the price down to the minimum they are willing to offer. For example, you could say something like “I’m really having a hard time believing that you’ve looked at your price structure and this is the absolute least amount of profit margin you’re willing to accept. My gut tells me that you’d be quite ticked if you lost the business and later found out that all it would have taken is a mere percent or two to put you over the top. Can you look me in the eye and tell me that you’ve reviewed the numbers and there is not room for any movement in the price and you’re willing to lose the business over what may amount to be a couple of dollars?”
Stay tuned…I have the feeling I’ll be finding even more anti-procurement negotiation techniques before long.
To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
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