A while back I began a project with a department in the company I currently work for. As we discussed the process, one of my colleagues asked me, “When will we start negotiations?”
My answer? “Day one.”
Negotiations start the moment you pick up the phone or type out an email in order to communicate with a supplier.
The moment the sale rep or account manager begins talking to you, they are gauging you.
How do you communicate? Is your presentation strong timid? Are you to the point, or do you like to discuss things before getting to your point? Are you readily forthcoming with information when asked, or do you hold back?
Now you’ve communicated with them, the sales rep is going to do research on your company.
Are your financials strong? What were your sales last year? What does Glassdoor.com say you pay your employees, and what do your employees say about the company?
After that, each interaction, whether informal talking about hunting pheasants, or down to business hashing out rates and terms and conditions, are all negotiations.
In the MEYBEST Procurement Solutions: Strategic Sourcing Training, I outline at least three rounds of negotiations. These are formal rounds, scheduled in response to a sourcing event. It’s the informal, unscheduled interactions before, and even after, the RFx is complete and the agreement awarded and signed.
Start your negotiations NOW.
Investigate them NOW. Much of this can be done during need identification and gathering of facts and data. You and/or your stakeholders will already have an idea of which supplier or suppliers you want to consider for your sourcing event. Do this before you pick up the phone or send an email.
Craft your negotiations strategy NOW. It’s not going to be complete, and it won’t be the tactics and strategy you use once bids for the RFx come in. But it will set the tone for how you and your stakeholders will and will not interact with suppliers, individuals within your organization, the media (should they ever get involved), and even social media.
How many times in the past two years have negotiations been derailed due to inflammatory Tweets?
Whether it’s defensive (like holding information back), offensive (using information in your favor), or meant to stir up a commotion (like a number of politicians these days), crafting your negotiations strategy now, and then enacting it, will set you and your company up for success during your sourcing event and beyond.