Today's procurement professionals often find themselves conducting negotiations in a variety of mediums. Some complex negotiations take place in the same room as the supplier's representation (in team or individual forums). Other negotiations take place remotely via telephone or email. Each of these modes has unique variables which the procurement practitioner must consider...otherwise they may hand over an advantage to a skilled opponent.
This article presents a brief outline of variables to consider for each mode of negotiation:
Mode 1 - Negotiating "In Person" As a Team - Negotiations are generally most-productive when conducted in person. This is because the participants have the advantage of both verbal and non-verbal indicators from the other party. And they do not suffer from the technical limitations (discussed later) inherent in telephone or email communications.
Factors which help make "In Person" team negotiations most-beneficial include the following:
Group Synergy - The benefit of team negotiations is based upon the well-known principle that "The whole is greater than the sum of its parts". More simply stated, a group will usually make better choices together than would any of the individuals who comprise the group, working alone. This is very true in negotiations, as a well-prepared team can almost always achieve better results than a solo negotiator.
Strength in numbers - As participants in Strategic Procurement Solutions' negotiation onsite role-playing workshops learn quickly, a team will nearly always have an advantage over a single opponent. That's because different members of a negotiation team can play key roles that make their approach highly-effective.
Ability to handle complex negotiations - Team negotiations are the optimal format for multi-element, high-value, and sole/single source negotiations. These negotiations are more effective when conducted in-person by a group of people.
Facilitation of decision-making - Team negotiations are particularly-important when decisions must be made during the actual negotiation process. A team comprised of key stakeholders can use quick "caucus" or "breakout" discussions to make decisions which can immediately be re-introduced into the negotiation dynamic with the other party.
Mode 2 - In-Person Individual Negotiations: Many of our negotiations are one-on-one. This is especially true for standard procurement transactions. It's just not practical to pull stakeholders out of business operations for standard negotiations. Having the procurement professional represent stakeholders in standard transactions optimizes staff time and resources. They are truly a procurement "agent" acting on behalf of their entire organization.
But negotiating by oneself has disadvantages compared with acting as part of an empowered team. Factors to consider include the following:
Increased responsibility - A downside to one-on-one negotiations is that the mode increases responsibility of sole negotiator for preparation, success, and failure.
Greater advanced preparations - This format also may require greater communication time in advance (with stakeholders, internal customers, etc.) to gain consensus prior to the start of the negotiation event.
Not efficient for complex negotiations - Solo negotiations can be inefficient for multiple changing negotiation issues, as it may take too long to communicate concessions with decision makers. A procurement professional needs to be empowered to control the entire scope of the negotiation, which may not be practical in a complex high-value solo event.
Know who's coming to dinner -Being the sole negotiator may put the buyer at a disadvantage if supplier brings multiple negotiators.
Mode 3 - Negotiating "by Telephone" - Many of today's B2B negotiations occur over thetelephone. But it's important for the procurementprofessional to remember that things happen more quicklyon the phone (than in person). Small talk is minimized, and participants are more-inclined to take extreme positions (people are less-inclined to take extreme positions in
person). So be prepared!
Some other important factors to remember are:
Losing non-verbal clues - You lose 80% of the communication content (nonverbal) when speaking over the phone.
Concentration is critical -Telephone negotiations make it very important to focus upon everything said. A poor connection (cell phone) may further complicate the clarity of communication. So be ready to ask the other party to repeat themselves when they've said something critical. It is also a good idea to take notes, and confirm key discussion points via email to the other party. Some skilled negotiators actually turn off their computer, dim the lights in their office, and close the door when involved in a telephone negotiation, so as to make sure nothing distracts them.
Conference call risks -Conference calls allow the other party to have advisors in room (on mute, etc.). You may not know the other people are there, until it's too late. Listen carefully for a change in background noise indicating you may be on mute. If I sense a change in background noise, I act instantly by simply saying, "Am I on mute?" If the supplier representative admits they are sorry to have put me on mute, I then make it a point to ask the supplier's person whether they are the only person in the room.
Conference bridge call services also allow the host to record the conversation (sometimes without your knowledge). If that is a concern, use your own conference service and be the host.
Being caught by surprise -Don't be caught by surprise by an unplanned phone call. Phone interaction allows the supplier to call you without an appointment. If a supplier calls you on phone without warning, you may not be prepared to negotiate. Instead, ask them if a later time would be acceptable...and schedule a later time which allows you to be prepared.
Do catch the supplier by surprise - Calling by surprise can work to your advantage. The person who initiates the call is often at a distinct advantage. They have time to prepare, are not taken off guard, can prepare a checklist, and can organize support data and materials. You can also use the surprise to "set the agenda" and thus control the issues being discussed.
Don't multi-task while negotiating via phone!
Mode 4 - Negotiating "by Email" or "Text"- Email is often used today to barter pricing and key transactional points. Complicating this is the increased use of texting via cell phones (in which case the communications are often truncated significantly).
A comedian recently observed that everyone would use the voice features of cell phones if texting had come first. The comic said people would be more excited about the ability to have a real conversation rather than sending short typed sentences.
But good or bad, email and texting unfortunately are a norm today for communications. Here are some things to remember when negotiating via email or text:
Email negotiations happen really fast - They go even faster than those on the phone, because there is less "give and take".
Backing into a corner - The medium also makes interaction more "positional" because the parties are putting everything in writing. This means there is less ability to change your position once the other party has seen your position in writing.
Detailed messaging -Email does allow exact details to be proposed and received with a good amount of certainty.
Bypassing gatekeepers - Email allows the negotiator to bypass "gatekeepers". If you can't get past lower level sales people or an administrative guard dog, email can allow you to interact directly with a decision maker.
No time constraints -Email encourages prompt and direct response, and can be utilized 24/7.
Ready, fire, aim - Some people get in trouble because they answer too quickly via email. This is especially true in the new "texting" universe. Don't reply without thinking. One of my favorite bosses once made fun of me because I can type very quickly. He, on the other hand, typed with two fingers. He commented that too often, I shot off too quick of a reply to problematic emails, while he had 'cooled off' by the time the message was drafted (he would delete the message and pick up the phone to speak with the other person). Good advice I've tried to remember since.
Why is the supplier sending an email? - An opponent choosing to use email may be a clue that they're not comfortable negotiating in person (and may be escalating points to a senior decision-maker before replying).
Lack of body language AND audio clues -Even more so than in telephone negotiations, emails lose the advantage of both body language and auditory clues.
Legally-binding offer and acceptance - You may technically have a legally-binding "contract" if you agree to something the other party offers in an email. That's because a court can interpret a contract being formed by a written offer and corresponding acceptance indicate a "meeting of the minds" occurred.
Poor medium for resolving problems - Contentious subjects or complex elements are much-better handled in person. If things aren't going well in an email exchange, STOP, and pick up the phone or schedule an in-person meeting to speak directly with the other party.
Who is watching? - Lastly, always be aware that email communications or text communications may not be kept confidential (forwarding, blind copies, etc.).
The last few months, I've presented multiple training workshops in the USA, Asia, and the Middle East to corporate and governmental audience. One programs presented to ISM groups in the San Francisco and Los Angeles areas is a one of our most-popular master classes called
The Negotiator Challenge - Advanced Procurement Negotiations™. This article is an extract from just one small portion of that interactive training program... More information can be requested at
Info@StrategicProcurementSolutions.com
