Do you have a minute? There’s something I’ve got to get off my chest. Can we keep it just between you and me? Yes? OK – here it is.
Buyers are liars.
There. I’ve said it. Buyers are liars. Maybe it’s the purchasing tactics that an organization uses to drive a bargain. Maybe it’s simply what an individual does to look good to the boss. Whatever the reason, purchasing at many businesses can push the boundaries of truth well past the level of absurdity.
You know you believe me. After all, how often have you heard one, more, or all of these lines?
“You guys are the highest priced player in the market.” Right. As if that one isn’t completely transparent. You’ve probably already got a pretty good idea what your competitors charge. If you’re the highest priced player, odds are it’s because you’re a premium product, or you’ve chosen that approach as part of your overall sales strategy. Remarkably, we’ve heard this line even when two companies control 80%-90% of the market, with little if any price differentiation.
“Switching costs nothing.” Your customer wants you to think you need them far more than they need you. But you buy products and services, too. You know full well that switching vendors always carries some level of cost, risk and pain. That’s the real reason behind the threat. It’s much easier to bluster than it is to actually make a change.
“You are 10% too high to get this deal.” It’s the purchasing equivalent of the auto salesman saying, “Tell me what you can afford, and I’ll see what I can do.” Give in, and you’ll never regain control over the sales process. Purchasers will go to absurd lengths to make this lie stick – right down to fake quotes from competitors, or even fake POs to competitors “accidentally” being sent to you instead.
“You are selling a commodity. It’s exactly the same as everybody else’s.” Outside of products traded on an electronic commodities exchange, every vendor should be bringing some degree of value add to the process. It might be the range of guarantee, freight and delivery expertise, brand recognition, technical know-how, or customer service. That’s what attracted the purchaser to you in the first place. It’s amazing how often someone thinks you’re special, only to insist you’re not, once there’s actual money on the table.
So, what’s an honest, hard working company to do, in the face of such perfidy? Over the last century, tens—if not hundreds—of books have been written about effective negotiation tactics. In the best-selling book Getting to Yes, Roger Fisher and William L. Ury offer five key propositions for a principled negotiation:
- Separate the people from the problem
- Focus on interests, not positions
- Invent options for mutual gain
- Insist on using objective criteria
- Know your BATNA (Best Alternative To Negotiated Agreement)
In addition to the tried and tested techniques offered by Fisher and Ury, and the always critical building of two-way trusted relationships with your buyers, we must step into buyer negotiations armed with the right information. In our experience, the following five techniques are quite effective at cutting through the baloney.
- Acknowledge the truth: buyers, do, indeed, lie from time to time. Even if they’re good people. Even if they’re your friends. It’s part of the process. It’s nothing personal.
- Use your information: With the right database tools and analytics systems, you can regain the initiative. When a customer claims that they should get a discount because “we always pay on time,” you’ll know immediately if that claim is true, or if they’re actually habitually 15 days past due.
- Call their bluff. A modest investment in Web-scraping and other tools can help your staff uncover publicly available information on competitive offerings and pricing. There’s not much room for argument when you’re clearly the better-informed party.
- Drive the conversation in the right direction. When a customer throws out something that sounds outrageous, ask the questions that force them to produce quality answers. It will rapidly become clear if they’re telling the truth.
- Always offer them value. Provide a valuable, differentiated offering with excellent service to back it up, and maniacally focus on maintaining or growing the gap between you and your competitors. With a sharp focus on staying ahead, It will be much easier to turn around buyer negotiations.
With thanks to the Kini Group fro publishing this helpful . T