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From:Wed 25 Jun 2014
To:Fri 27 Jun 2014
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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 (buyers). The buyers' 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 (sellers); buyers also need to negotiate internally with the stakeholders they serve. Before we explain why our procurement negotiation clients trust us with their teams development, let's first understand the main internal and external challenges faced by buyers.

Vendors Main Advantages

It's important that buyers, their managers and leadership be aware of the vendors typical advantages:

  • Deep Knowledge: Vendors have deep knowledge of their products, services, assets, ideas and markets. This is so important, that vendors often train engineers sell. Contrast this with how buyers are stretched in their much broader role, demanding that buyers be a 'jack of all trades, and a master of none'.
  • More Training: Sellers typically participate in more sales, persuasion and influencing training courses, such as our Sales Negotiation Training. There are more sales training methodologies available (e.g. Strategic Selling, SPIN selling, Consultative Selling, Solution Selling). Many large organisations skill up their sales teams with two to three days of training every year. Sellers are far more likely 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.
  • Team Collaboration: Vendors pull together cross functional teams to get your deal over the line. So while you may be looking at a sales professional across the table, what you're unlikely to see is the tens to hundreds of hours invested by their Marketing, Product, Production, Legal and other departments. The research findings and ideas from these sessions can make the vendor your only viable choice - and they often know this fact.
  • Preparation Time: Sellers are given more time to focus on their key accounts. This time advantage usually translates to better preparation, and preparation just so happens to be where most 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 them commission next period. Buyers on the other hand are often pinched 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 offering as unique as possible, or 'differentiation'.
  • Relationship Intelligence: Smart sellers have deep relationships with your stakeholders. Smart sellers know more about your stakeholders and even other departments than buyers. Smart sellers gather and share important information on you, your stakeholders and your company's needs using a Client Relationship Management (CRM) system, such as salesforce.
  • 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 there is much that buyers can do to wrestle the advantage back.

Internal Stakeholders Challenges

Half the battle for buyers is internal. Managers and leadership need to be aware of the logs that colleagues often throw at buyers feet:

  • Mandate & Budget: Few Buyers have the power to say 'Yes' to vendors, as few buyers hold the budget. Most buyers only have limited power in saying 'No'. So many internal stakeholders resent buyers for what is seen as 'Dr No' power over their budget.
  • KPI: Companies' 'Key Performance Indicators' are usually very different for buyers as compared to internal stakeholders. So it's no surprise that internal stakeholders push and pull in different directions.
  • Focus: Most internal stakeholders are focussed on specific shorter term goals such as, buying a product, asset or service, launching their project or product, or keeping the production line running. Buyers by contrast are usually focussed on delivering more macro longer term value goals to the company.
  • Ignorance: Most internal stakeholders are blissfully unaware of the strategic value buyers can and should be assisting them 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 unnecessary hurdles or procedures.
  • Timing: Internal stakeholders usually involve buyers too late to add much value.
  • Relationships: There's a natural human bias to continue working with vendors who are known, the advantage enjoyed by the incumbent. Not only do internal stakeholders build up personal relationships with the vendor's staff, nobody wants to get fired for taking the risk of switching from a supplier who was performing satisfactorily.

Why Do Clients Trust Us?

We read through our clients' post training assessment responses, completed several months after graduating, to see which parts of our Procurement Negotiation Training they have found to be the most valuable:

  • identifying, pursuing and successfully capturing opportunities
  • avoiding the common pitfalls most negotiators fall into
  • questioning effectively to understand needs
  • countering tough objections through skilful use of framing
  • understanding the impact of your personal negotiation style on others
  • understanding how others employ personal style to have an impact on you
  • employing a trading plan to create value while ensuring optimal exchanges
  • adopting a process based approach to procurement negotiations
  • increasing your confidence through effective preparation and the use of proven tools
  • managing potential conflict, tactics and positional negotiators
  • creating common ground to gain agreement
  • developing your Best Alternative - empowering yourself to walk away from sub-optimal agreements that are starved of value
  • successfully facilitating team composition, team performance and feedback
  • using proven persuading and influencing techniques to gain more 'yeses'.
  • fostering collaborative relationships with difficult colleagues
  • subtly taking control in meetings and growing your power base
  • reading unconscious non verbal giveaways and controlling your own

Which strategies and tool-sets will empower purchasing and procurement negotiators to surpass cost savings to also enhance relationships and qualitative goals in your negotiations with suppliers, internal departments, colleagues and other stakeholders?

When engaged in procurement contract negotiations where your skill as a negotiator may prevent losses and increase the gains for you and your organisation, significantly increase your capability to:

  • prepare effectively
  • understand and consider the needs and interests of all parties
  • manage the impact of your personal negotiation style per engagement
  • generate greater value through creativity
  • successfully address all key elements of the negotiation cycle through optimal preparation, engagement and review

The Negotiation Experts has developed an award winning framework specifically designed to improve the buyers contract negotiating performance. Our Value Creation training framework forms the back bone of all our consulting and training engagements and is supported by various best practice, proven tools and processes. The framework is based on a combination of sound academic theory and significant practical business negotiation experience to provide you with a due diligence framework that will ensure that you are able to:

  • understand and improve each individual negotiation relationship
  • ensure full understanding and application of total cost of ownership
  • avoid leaving value on the table
  • identify and counter negotiation tactics
  • recognise and successfully manage potential conflict
  • move from claiming value to creating value
  • apply a principle-centred, collaborative approach to purchasing negotiation
  • learn effective team management and development strategies
  • successfully facilitate team composition

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