Engaging Vendor & Supplier Partners: Key Negotiation Principles
To create more value, drive savings and gain additional investments from your vendor or supplier partners, use collaborative negotiation principles as you engage. Here are several we recently employed with a Fortune 500 retailer with a new growth strategy that was seeking to lower costs, drive innovation and attract marketing investments from its vendors:
1. Mindset: Enter discussions viewing your vendor or supplier as a real partner (not just in name) in helping you solve your business challenges – not the “enemy” from whom you must extract more. Your mindset will drive (consciously or subconsciously) behaviors that will either open them up or shut them down.
2. Vision: Continuously paint a compelling vision of the vendor/supplier’s potential as a partner to get them excited about investing with you. Share more information about your strategy and plans so they can find opportunities to help you.
3. Ask Questions: In any negotiation, information is power. The more you know, the more you can craft solutions that satisfy both your needs and theirs.
· Ask about their strategy and plans to understand what is important to them.
· Ask about their most important priority for the coming year.
· Ask what pain points they are feeling. (How can you solve for them in a way that gets you more as well?)
· Ask what they need in the relationship.
· Ask whether another customer of theirs gets something better. Ask how you can get that too.
For them to give you more, you will need to help solve for their most important priority/need. Take what you learn to craft your messages back in language that resonates with them.
4. Listen: The easiest “give” in any negotiation is the gift of listening. Vendors & suppliers love to be heard and this costs you nothing. They will simply give more when they feel they have been genuinely heard. Listen to what they need from you – what is important to them. “Listen” to their body language and perhaps what is not being said.
5. Solutions: Propose solutions based on what you are hearing, but ask for their input and partnership. Look for solutions that meet your most important needs and theirs. Remember there is no single way to solve a challenge. Be open to ideas that may come from the vendor or supplier.
Don’t be afraid to ask for what you need – You don’t get what you don’t ask for.
Daniel Duty is a founder and CEO of Conlego Consulting, the premier global retail and CPG negotiations and partnerships firm. He can be reached at email@example.com.