Professional no-nonsense negotiator or focused on people — what will characterize the buyer of the future?
"My management wants me to be a professional no-nonsense negotiator. "What do you think, Tanja?" This question came up during a mentoring session and I have a very definite opinion in this case: The profit in a purchase is made by people. That was my reply. "I'm supposed to knock down the other side and I'm really annoyed by it," he answered. And then, once again: The profit lies in the purchase that is made by people.
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In connection with this subject, I then addressed the three basic principles that are important in any negotiation process. These, along with the many other building blocks — such as information, goal, strategy, tactics, results, and experience — play a major role in showing how people skills can help move purchasing forward.
In a negotiation I have to find convincing reasons for my counterpart. In case I know this and it will remain a one-time negotiation, then I may be outright tough this one time, because I will never negotiate with this person again. This could be the case, for example, when I'm buying a house. Of course, this is only an option and not a requirement.
However, when I have recurring negotiating partners, they will remember exactly at which point the buyer was hard-nosed. As a purchasing professional, I need to find reasons that describe my goals, state my position, substantiate, justify, and support my claims. These arguments often gain more weight when we negotiate with someone as equals and partners. Of course, they also need to be coherent, comprehensible and, if possible, useless to contradict - but "grumbling", patronizing, or being callous do not come across as very professional. Often, this even blocks the way for further negotiations and the impression may arise that the reasoning in itself does not count and must be reinforced with extra cold-bloodedness.
2. The baseline position
The baseline position is the second basic. This is where the buyer thinks about where he stands at the beginning of the negotiation. For example, if he is dealing with a bottleneck supplier, it means there are only a few alternatives and the product cannot be procured without risk. If this supplier is scared away by too much hard-nosedness, then he is lost.
This means a bidder list with 10 suppliers can quickly turn into a shortlist of only five. You may end up with only one supplier, and this is where it gets really difficult. Buyers always need to keep the starting position in mind. On the one hand, there is the supply risk and on the other hand, there is the issue of money. Both of these need to be considered. For example, a bottleneck supplier often has a leading position in the market and maybe even a monopoly. A non-critical supplier, however, can also be replaced quickly. And then there are suppliers with leverage. This is where it takes more effort to find a new supplier. You need to be aware of this starting position when you go into a negotiation. Depending on the market situation and the starting position, you will have to position yourself in negotiations.
3. Driving force
This basic is the driving force or also the motivation. Purchasers ought to be able to detect the motivation of their counterpart. The best way to achieve this is with a lot of communication and exchange. The salesperson sitting across from you may well be motivated by the fact that he is receiving approval and praise from his superiors. It is also common for two salespeople to go into a negotiation. And of course, no one wants to go out feeling like they have lost face. Salespeople are under pressure from their supervisors along with their company to succeed, so they need to deliver results. This means their motivation is not to make any mistakes and also, to a certain extent, to secure their own jobs.
A lot can be lost in this area if the negotiation is not conducted in a spirit of partnership and at the people level. Of course, this does not mean that the price does not matter, yet as mentioned at the beginning, the profit is made by people. Just as salespeople have their motivation, purchasers naturally have theirs as well. And depending on the starting point, they will choose their tactics and strategy accordingly. But we must never forget that the other person is still a human being.
All that remains for me to say is: The profit lies in the purchase that is made by people in a spirit of partnership and at eye level. What do you expect from your purchasers? Do you want them to be as tough as possible, or do you prefer for them to work as partners? I am interested in what your experience has been like and look forward to an exchange with you: if you like, on LinkedIn or in a personal meeting.
For more on this and other issues for sustainable purchasing strategies, listen to my podcast for more.