Procurement Negotiation Training for Buyers
Our Procurement Negotiation Training saves buyers from losing money due to the unique challenges faced by purchasing, procurement and contracts negotiations. The purchasing side of the negotiation table is in many ways more complex than sellers'. Buyers need to not only negotiate externally with suppliers, vendors and contractors (the 'sellers'); buyers also need to negotiate internally with their stakeholders or customers they serve. While our Procurement Negotiation Training focuses primarily on vendor negotiations, many of our course's modules address the pivotal persuasion and influencing opportunities that successful purchasers gain decisive leverage from when preparing internally. So we invite you to scroll half way down this page to read about the 'Internal Stakeholder Challenges' and the 'Vendors Main Advantages' to better understand the unique main internal and external challenges faced by buyers.
Why Do Clients Trust Us?
You don't need to trust our words. We read through our clients' buyers' post course assessment responses, completed several months after graduating (so not the feedback forms from the end of workshops), to see which parts of our Procurement Negotiation Training buyers are using and found to be the most valuable:
- Identifying procurement and our stakeholders' main areas of pressure and leverage.
- Consciously developing the right style of negotiation and types relationships with vendors, driven by my category / product / service's commercial reality.
- Creating and claiming more value by using my trading plan, having the confidence that my negotiated exchanges are optimal.
- Winning more 'yeses' internally and with vendors through using the stack of persuasion and influencing psychology tips.
- Stakeholders who were side-lining me previously and treating me like a paper pusher are now asking for my advice and inviting me to get involved soon enough to add value.
- Feeling confident that I'm prepared, rather than stressed and unsure.
- Controlling meetings to take the pressure off by reaching my goals early.
- Having more ideas to leverage from, and better relationships with sole / single source suppliers.
- Being recognized for creating value rather than being accused of being obsessed with cost savings, including areas such as innovation, quality and market growth.
- Persuading stakeholders to meet with new vendors and give resource and time to test and trial new products and services, and other important change initiatives.
- Being trusted to take charge of negotiations, with stakeholders supporting me more and giving away value to suppliers less often.
- Knowing how to capture more of the value that we've created, straight to my company's bottom line profits.
- Using the lessons learned from the psychometric profiles from the course to continually make improvements in my areas of weakness or opportunity.
- Enjoying shorter deal cycles, especially with the challenging suppliers who preferred to stay out of contract.
- Using what I learned from the split screen video feedback to work on my body language giveaways, and being much better at reading when others are bluffing.
- Being better at reading others' personalities to know which path is going to be met success, and faster.
- Objections that I used to fear I now handle with confidence.
- Using questioning to get the important information and answers that I need.
- Noticing when stakeholders and suppliers are using tactics on me, and comfortably neutralizing their tactics in a non-confrontational way.
- Knowing how to diffuse tense moments of conflict and competition to get back on track towards agreement.
- Having the internal support to walk away on the few occasions when we need to.
- Learning more from my larger negotiations through reviewing.
- Understanding the dynamics and important roles in teams, both internal and from the sales side.
- Having a structured process or framework with supporting tools to navigate the most complex deals.
- Achieving more price reductions, with fewer and smaller price escalations.
- As a buyer my most important core competency is negotiating. So thanks for showing me how to do my job better.
We don't know which areas of our Value Creation Framework will create the most value for your purchasing negotiations, as this differs not only across industries and clients, but is different between buyers in the same department. This has taught us the benefits of providing buyers with an abundance of choice, allowing buyers to choose their favourite tools, strategies, tactics and skills from their training with us.
As promised above, following is an in-depth explanation behind many of the unique challenges buyers face in their negotiations with vendors' sales professionals, and with their internal stakeholders or clients / customers:
Vendors' Main Advantages
It's important that purchasers, their managers and leadership be aware of the suppliers' typical advantages:
- Deep Knowledge: Vendors have deep knowledge of their products, services, assets, ideas and markets. This is such an important advantage to vendors, that rather than employ a sales professional, they more often train engineers on how to sell. Contrast this with how buyers are stretched in their much broader role; often demanding that buyers be a 'jack of all trades, and a master of none'.
- More Training Courses: Sellers typically participate in more sales, persuasion and influencing workshops, such as our Sales Negotiation Training. There are also more pure sales training methodologies available (e.g. Strategic Selling, SPIN selling, Consultative Selling, Solution Selling, Challenger Sale, Back Door Selling). Many large organisations skill up their sales teams with two to three days of training every year. Sellers are far more likely to gain approval to take our Advanced Negotiation Training than are buyers, with many Sales Managers following up with our Advanced Sales Negotiation Training after a year or two. Over time, this advantage adds up and can be decisive during contract negotiations.
- Team Collaboration: Vendors pull together cross functional teams to get your deal over the line. So while procurement may be looking at a sales professional across the table, what the buyer is unlikely to see is the tens to hundreds of hours invested by their Marketing, Product, Production, Legal and other departments or business units. The researched findings and ideas from the sellers' internal collaborators can make the sellers' the only viable choice for procurement and your stakeholders - and vendors count on this advantage.
- Preparation Time: Sellers are given more time to focus on their key accounts. This time advantage usually translates to superior preparation, and preparation just so happens to be where most commercial negotiations are lost and won.
- Deadline Pressure: While sellers do often have the pressure of meeting a monthly or quarterly target, what doesn't get sold in this period will likely earn your vendor commission next period. Buyers on the other hand are often pinched by internal customers to keep the production line running, or launch a new product or project.
- Differentiation: Sellers make it difficult for buyers to easily compare their negotiation offering to their competitors through making their value proposition as unique as possible, known as 'differentiation'.
- Relationship Intelligence: Smart sellers have deep relationships with your stakeholders. Smart sellers make it their business to know more than the buyer about the buyer's stakeholders. Astute sellers gather important information on you, your stakeholders and your company's needs using a Client Relationship Management (CRM) system, the most popular of which is sales-force.
- Monopoly: Either a vendor enjoys a natural monopoly, or your company has given them this advantage through a sole/single source supply contract. In the medium to long term, if procurement build the right relationships and demonstrate delivering value through superior negotiation skills, there is much that buyers can do to wrestle the advantage back.
Internal Stakeholder Challenges
Often half the negotiation battle for buyers is internal. Procurement Managers and leadership need to be aware of the logs or obstacles that colleagues often throw at buyers feet:
- Mandate & Budget: Few Buyers have the power to say 'No' to vendors, as few buyers hold the budget. Most buyers only enjoy limited power in saying 'No'. So many internal stakeholders resent buyers for what is seen as 'Dr No' veto power over their budget, which sometimes requires escalation up and down the line via their managers.
- KPI: Companies' 'Key Performance Indicators' are usually very different for purchasing as compared to internal stakeholders. So it's no surprise that internal stakeholders push and pull in different directions.
- Focus: Most internal stakeholders are focused on specific shorter term goals such as: buying a product, asset, service or idea, launching their project or product, or keeping the production line running. Buyers by contrast are usually focused on delivering more macro longer term value goals to the company. When purchasers are new to buying, they usually place too much focus on cost savings, at the expense of overall value creation.
- Ignorance: Most internal stakeholders are blissfully unaware of the strategic value buyers can and should be assisting stakeholders in delivering to the company. Until internal stakeholders enjoy their first eye-opening major win from collaborating with buyers, buyers will continue to be seen as paper pushers who waste time with annoyingly unnecessary hurdles or procedures.
- Timing: Internal stakeholders usually involve buyers too late to add much value. All too often the stakeholder has given away their business' negotiation position to the vendor, either directly or unwittingly.
- Relationships: There's a natural human bias to continue working with vendors who are known - referred to as the 'incumbent's advantage'. Not only do internal stakeholders build up personal relationships with the vendor's account management and other business unit staff, few stakeholders want to risk getting fired for taking on the risk of switching from a supplier who was performing satisfactorily for an unknown supplier.
We also run training courses in the following locations: