Negotiations are an everyday part of business life, as they take place with all the stakeholders that make up the company: commercial negotiations with customers, collective negotiations with employees, trade union negotiations, and so on. The aim is always to reach an agreement that provides a win-win situation for all parties.
As part of the purchasing process, negotiation comes into play in the final, most decisive stages. Following the selection and analysis of supplier offers, this stage covers the period from initial contact to final signature. Contrary to popular belief, negotiating well is neither a gift nor a stroke of luck. You have to learn how to negotiate!
Thanks to this article, successful negotiation will no longer hold any secrets for you! Discover our three main tips for achieving your objectives and succeeding in future negotiations
- 1 Prepare in advance
- 2 Choosing your strategy
- 3 Mastering communication techniques
Prepare in advance
To maximise the chances of success, all negotiations must be prepared in advance. The same goes for buyers with their suppliers. Whether it involves a telephone, virtual or physical meeting, this stage must not be neglected in the quest to buy products or services at the right price.
To ensure effective preparation, it is important to ask these three questions:
1 – Who are the players present?
You identify the parties: those who must be present on the day and those who have a direct or indirect influence on the discussions. It is useful to have information about those who will have an impact on the negotiations. You need to know their characteristics and role, their strengths and weaknesses, their needs, their objectives, their competitors, etc
2 – What are your objectives?
Write down explicitly on paper what you want to achieve, and be precise: a price? A deadline? A reduction in production costs? An end-of-year bonus?
Plan a high and a low range, which will represent your room for manoeuvre during the negotiation and define the acceptable threshold for a successful negotiation.
3 – What arguments/tools will you use?
Depending on the type of strategy you choose, you will need to construct an argument to back up your words and give them credibility. To complete your arguments, you can use analytical tools such as graphs or statistics. Looking for testimonials or customer reviews is also useful. This can bring a concrete aspect to your discussions.
If you are a buyer, look at the company’s purchasing history. You’ll come to the negotiating table with extra weight that can tip the balance very favourably.
You need to imagine how the discussion is going to unfold from start to finish and know what arguments you are going to put forward as the discussion progresses.
Choosing your strategy
Choosing a negotiation strategy is also part of the preparation. It is very important and determines the tone and conditions of the exchange.
To define a strategy, you need to take a number of criteria into account: the stakes of the negotiation (don’t take too many risks if the stakes are high), the person you are negotiating with (your approach will be different depending on the temperament of the person opposite you) and your personality and skills (don’t get involved in a scheme that could overwhelm you).
Broadly speaking, there are two main areas of strategy:
1. Competitive strategy
This approach is similar to the “balance of power”. The assumption of this strategy is that there will be a winner and a loser at the end of the fight. The situation is recognised by a high degree of competition. This type of strategy is best used when the points of view of the two parties are radically opposed. It aims for a short-term result.
Buyers, here in the role of negotiator, are prepared to use all the means at their disposal to exert psychological pressure on their counterparts. Manipulating, coercing, ignoring questions, putting pressure on, setting traps, destabilising… this is the profile of a competitive negotiator!
2. Cooperative strategy
This type of strategy is used when both parties have a common interest or when their interests converge or complement each other. On the supplier side, sales techniques are implemented to defend margins, but always with a view to ensuring the loyalty of their customers.
On the buyers’ side, beyond financial issues, it is important to foster a stable relationship with suppliers. Indeed, securing a purchasing process, maintaining a production line or ensuring continuity of service are intangible indicators that must be given special attention.
Exchange, active listening, reformulation… these are the keys to constructive negotiation for mutual benefit. This method aims for long-term results.
Mastering communication techniques
Mastering communication techniques is important and will be very useful during a negotiation. It enables you to anticipate tension or conflict, or to constructively steer the discussion to your advantage.
Being persuasive is an element of charisma. Developing your ability to persuade can help you to improve your self-esteem and make it easier to manage conflicts or heated exchanges.
What’s more, the art of persuasion means finding the right words, adapted to the person you’re talking to. Active listening combined with a keen interest maximises your chances of a successful negotiation.
Taking the floor
This is an essential quality in a negotiation: you need to be able to express your potential to someone else.
You need to be at ease in the face of reluctance, know how to bounce back from a refusal, play with words and emotions… Acting with confidence is essential if you want to be heard.
Knowing the basics of body language is a major asset for a negotiator. Being able to decipher postures, gestures, looks, attitudes and to hear beyond the words spoken enables you to understand the reactions of the person you are negotiating with and to adapt your speech.
During a negotiation, knowing how to say no without offending or putting your negotiating partner on the defensive means showing emotional intelligence and assertiveness. These are qualities that negotiators look for and appreciate.
With these few tips, you’ll be better equipped to handle a negotiation. As with this article, don’t forget to draw up a conclusion! It enables you to summarise the terms of the agreements negotiated and to obtain the seller’s explicit assent before signing a negotiation report.
As you will have realised, good negotiation depends on good preparation, the choice of an appropriate strategy and good oral communication. A successful negotiation is an opportunity to obtain better terms than the initial offer and reach a consensus with your supplier. This makes it easier to validate your offer internally.
To give your company every chance of succeeding in supplier negotiations, start by digitising your purchasing process. Buyers will be able to draw on online services that can be accessed at a glance, saving time in preparation. Weproc is a SaaS purchasing software package that enables your organisation to facilitate decision-making and improve team collaboration thanks to an automated, digitised purchasing workflow.
Want to learn more about our procurement management software Weproc? Contact us or request your free 15-minutes demo below!
Weproc is a SaaS software specialized in digitizing the procurement process of companies. From purchase requests to supplier invoicing, through the validation process, Weproc is designed to simplify the purchase management of SMEs and mid-sized companies by centralizing all purchase-related activities.