Globalization has made the supply chain more connected and complex, which requires companies to have new negotiation strategies with their suppliers and, in this way, ensure smart cost reduction and create a good relationship with partners.
Therefore, purchasing professionals need to be aware of trends and technological advances, market changes and regulatory standards that emerge all the time. However, none of this matters if these professionals do not master the art of negotiation.
Developing efficient negotiation strategies can be quite complex and often involves the negotiator’s gut feeling, as well as having to adapt to different suppliers, who behave differently. Despite this, there are some practices that can simplify this process.
Preparation is key
Preparing to negotiate is key to creating good negotiation strategies. In other words, it is necessary to know the supplier and the market in which the company operates. Likewise, it is essential analyze negotiations previous ones, what worked or not, what were the negotiated deadlines, the payment methods, among other factors that may influence the negotiation.
Searching for data from sources outside the company, as well as participating in events and taking advantage of these events to talk to suppliers and other customers, is also a good way to learn about the way the supplier works.
Furthermore, when starting a negotiation, it is important to remember that courtesy and education, avoiding being aggressive when there is no need, are important factors for successful business.
How to Create Good Trading Strategies
A good strategy needs to be transparent, maintain good communication with suppliers and allow you to make the most of the relationship to create a long term partnership.
What are the company's objectives?
What are the company's objectives and goals? With this in mind, it is necessary to analyze whether suppliers are aligned with these goals. This allows for the creation of negotiation strategies that seek to meet the company's real needs, reducing risks.
What are the supplier's objectives?
It is essential to know the supplier, the company's history, its facilities and to know what its main products are and what motivates its sales team. Based on this information, it is possible to create a strategy that meets the needs of the needs of this supplier – and also those of the company – making it clear that the partnership brings benefits to everyone.
Who are the professionals who will participate in the negotiation?
In addition to understanding the supplier’s objectives, it is necessary to know the people who will participate in the negotiation – the sales team and decision makers. Being familiar with people, their temperaments and behaviors at the negotiating table is an important part of the game.
And the internet is an almost inexhaustible source of information about people. LinkedIn provides great professional information and even Facebook can help you learn a little more about the lives of these professionals. Finding out which team a salesperson supports can help break the ice at the beginning of a negotiation.
Transparency is essential in negotiations
There is no point in withholding information or not making the company's objectives clear. In the long run, acting in this way will only hinder good negotiations and make the company look bad in the market.
Therefore, the best negotiation strategy is to be clear and objective about what the company expects from the supplier. The more transparent the negotiation, the greater the chance of making the relationship long-lasting.
History analysis
Finding out as much information about the supplier as possible can help you avoid making a bad deal. It’s essential to talk to colleagues and other customers who have done business with the supplier in the past, and even review their records for relevant data.
This allows you to understand the supplier's tactics and behavior before negotiations actually begin, and thus be prepared to avoid surprises.
Put yourself in the supplier’s shoes
A good way to start a negotiation is to act empathetically, making it clear that the negotiation is not just for the buyer's benefit, but that it seeks an agreement that is beneficial to both sides.
A good partnership only works if communication is efficient, so it is important to work side by side with the supplier, allowing them to participate more actively in projects and understand their role in making the relationship healthy and long-lasting.
Data is essential to create an efficient negotiation strategy that contributes to business success. COSTDRIVERS offers the information your company needs to obtain advantages when negotiating. Learn more about our platform.
