|
|
Best Practice Preparation: Using Purchasing Training To Determine The Key To Unlock A Profitable Negotiation
Most negotiators completely underestimate the time required to prepare for any business negotiation even though this is a key part of business negotiation best practice.
Using your negotiation skills to understand the negotiation environment is a great place to start preparing for negotiations.
The key elements to think about are:
- What is the nature of the sale/purchase in terms of risks involved, the cost and the complexity of the transaction?
- Competitive analysis: What is the current position of the market and what alternatives do the other side have at their disposal? We will deal with a sole supplier differently than those in a competitive market.
- Is it a one-off transaction or should we consider securing a long-term positive relationship that creates opportunities for future trade?
- Have we had any dealings with our counterparty in the past and what is their most likely style to concluding business?
- How experienced are the negotiators on the other side of the table?
- What cultures will be represented and what are the local practices?
- Who are all the parties & persons concerned in the transaction and what is the decision making process? A diversified approach is required as final decision makers will certainly be interested in Return on Investment and increased revenues & margins. The final user who looks for improved output and efficiency regard the financial elements almost totally irrelevant.
Almost any negotiation training course will highlight the importance of setting formal deal objectives.
Failing to prepare and rank our deal objectives we put ourselves at risk of being taken advantage of and/or ending with a less agreeable agreement. Whether you are involved in negotiation on the sales or purchasing side, think about the following factors when preparing for negotiation:
- Price and payment terms, Key obligations, Delivery, Warranties, Intellectual property and Risks.
Price and Payments: The competition and the difficulty of most business deals require finding ways to develop extra value and to move negotiation from haggling to synergistic and creative joint problem solving. Professional buyers are not requested with buying the most affordable solution but rather with providing their organisations with the cheapest total cost of ownership, which is composed of things like:
- Purchase price, Service costs, The cost of use, Training costs, Supplier performance metrics, Delivery, Product quality and Customer Support. (These concepts are covered in most purchasing training programmes).
If we are able to reduce the other side's costs in the whole life cycle of the product, solution or service and at the same time provide value for money, we are in a better position to find agreement.
Key Obligations: Ensure your product and services are defined and reflect your priorities. Include all the important quantities and specifications.
Delivery: How important are the delivery timelines and what happens if the delivery doesn't take place as agreed?
Warranties: In order to maintain trust and credibility make sure that you deliver any promises.
Intellectual property: Carefully negotiate IP ownership rights and think about the following elements:
- Who is paying for the Research and Development?
- Could the research and development be used by competitors to your disadvantage if you don' t own the IP? How can you prevent competitors to use the same IP?
Risks: The best way to manage risks is to include the elements in a written contract. Cultural consideration is very important. In Asian countries the goal of negotiation is not a signed contract. In China, unforeseen events are resolved through the relationship.
Analysing the above factors are crucial in preparing Concession Strategies that will assist you to leverage maximum value from trades and in planning meetings optimally.
Include This Tip In Your Negotiation Skills Training To Ensure These Three Things Never Occur
If you are getting ready for a non-competitive negotiation, deploy some effective negotiation skills and make every effort not to make any of the most common mistakes during your dealings with your counterparts.
Applying Effective Negotiation Skills To Help You Bargain A Lower Rate
If your business is in a position where they either need to pay less or charge more for their products or services, the easiest way to do this is to renegotiate existing client contracts. There are 3 ingredients in getting a better price.
Better Your Negotiation Skills By Using This Advice On Dealing With The Vice Tactic In Your Commercial Deals
You will inevitably have to negotiate with counterparts who use tactics against your organisation. It is very important to be able to recognise negotiation tactics and have the confidence and negotiation skills to counter them successfully.
Improve Your Sales Negotiation Skills By Deploying And Countering Power In Negotiation
By developing options in your negotiation, you are deploying the single most effective way to developing authority for yourself in negotiations.
Becoming A Consumer In Melaleuca Not Only Saves You Money, But Adds To Your Long Lasting Health!
Melaleuca is a home based business focused on customer satisfaction and loyalty! Melaleuca actually SAVES people money (25%-60% ) replacing store bought products with theirs, eliminates toxic chemicals from your home & body, and they work better!
Your Underdeveloped Business Negotiation Skills Capability Could Cause Critical Negotiations To Fail Due To Insufficient Preparation
The main reason to a profitable business negotiation result is the quality of your planning. If you don't plan, prepare to fail and expect to not reach your goals.
Sales Training Tip: Obtaining What You Want From Your Sales Meetings By Deploying Effective Negotiation Skills
Sales training tip explaining how you can readily increase the likeliness of getting what you want from sales and business negotiations.
|
More Articles
Blogroll
|
