PurchTips - Edition # 173
How To Influence A Negotiation Early, Part I
By Charles Dominick, SPSM, SPSM2, SPSM3
When Does Negotiation Influence Begin?
Waiting for a negotiation to start to begin exerting your influence may be waiting too long. There are three methods of influencing negotiation outcomes early.
Method A - Prevent Backdoor Selling
A timeless negotiation principle is that the less certainty of earning your business that a supplier has, the more leverage you'll have. So, it is important that for large purchases, you maximize your leverage by ensuring that suppliers - no matter how hard they probe - do not get clues that their proposals are acceptable. While purchasing professionals are usually adept at maintaining uncertainty, internal customers are not.
Method B - Get Involved In Product Design
One of the toughest negotiation scenarios is a sole source situation, where there is only one supplier who can provide a product/service. Sadly, most sole source situations are self-inflicted by buying organizations who engage suppliers in their product design process without purchasing department involvement. Those suppliers creatively lock themselves into long-term business characterized by large annual price increases.
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