Procurement departments have started to demand a lot of negotiation power over the years. Think of it as a game between two players of various contexts like vendor acquisition, contracts, obtaining leases, pricing and sales. How to stand your value propositions in such a manner so as to always triumph in successful negotiation is a skill. Organisations need to hone in order to play the game fair and right. For this, there are many ways in which to train yourself to negotiate more effectively.
Here are some ways in which we can ensure Procurement Success through negotiations.
- Gain Procurement insights
Get the best quality deal from the vendor?
Have a complete focus on gains through return on investment?
Accordingly, the procurement success will strive to deliver in negotiations if the objectives are clear and simply understood as business needs.
2. Build a good Impression
Generating a good rapport with the vendor is going to be fruitful for communication to flow better. It also manifests the vendors into agreeing by being attentive, responsive, alert, presentable, approachable and well spoken. It gives the suppliers a good impression if not less.
3. Broaden your Network
Sometimes the suppliers are aggressive and might not budge. In this case the game theory suggesting to go against procurement will work best. This means to expand your reach and invite them early if you already know the procurement is going to finalize to an RFP. The more the merrier as it helps gives you a head start in getting the best quotes out of every dealer you contacted.
4. Familiarize your team with supplier company
Suppliers company information can be easily accessed and it provides data regarding their business line, operations, clients, customers, growth, plans, facilitators and history. The annual reports generated but the company is a gold mine of accurate and current data structured in a very linear format which makes it easy for anyone to understand their profile and value propositions better. This will also increase the bandwidth of your customer response towards them. If they are not pleased, the further negotiations can work as an advantage for you at the table.
5. Costing and damage clauses
To be most fair, damage clauses are the reason why most suppliers are hesitant to move forward. Hence negotiations must always include the damage agreement upfront. This states the liquidated damage cost if at all the contract is breached. Costings are the base of any negotiations and it goes straight to the discussion priority list. To have a better costing knowledge of previous suppliers, how much is the market demanding, how much are the other competitors paying helps in negotiations.
6. Bank in on Credibility
Suppliers and vendors are impressed with the kind of negations you bring to the table and if it is credibility that you offer, then it might raise your chances tenfold in successful negotiations. Just like how they would propose the same ideal, you can think like them to create a mutual understanding. If you are sourcing footwear material, assure the supplier of credibility from your end to build on that trust.
7. Select, train and prepare your team
Negotiation is a skill. Most people have to learn and train to gain that extra bit of exposure to techniques and tricks. Some are however born with it as a talent. Knowing this as a team leader will benefit your table discussion with the other side. Pick and choose only the best from the lot and with continuous sessions on building up your team from scratch, there has to be win-win agreement to be settled through constant perseverance.
8. Build up your Nonverbal communication
Nonverbal skills are as important as verbal speech. These gestures can go a long way as crucial assets during break-even point in negotiations. If a child trainer can coach a child to play a game or instrument just by hand signals and movements, try to gauge how much of a strength can having this same logic apply to dealings of professional settings through nonverbal communication. By one look, your teammates must process the hidden message which otherwise cannot be said out loud. The ability to read the room is a special one and its best known to be used in situations like these.
9. Success is in favor of Well preparedness
Your team can now finally be ready for negotiations after rigorous training and procedures for procuring a successful deal. You will gain confidence in yourself and thus what you want to say. There is a certain bond created when you are invested in telling the exact truth and wanting a genuine connection to grow. Remember that this negotiation is for the long run as the supplier contract is of a certain duration. Plugging in anecdotes of previous suppliers and early payment appraisal can work marvelously to gain that final push before finalizing the deal which will only come out organically if you are well prepared.