increase margins with more effective negotiation
One of the most frequent questions we receive
from our clients when facilitating Miller Heiman programs is how
to handle requests for a lower price from the purchasing
department. The sales executives with whom we work agree that
increasing margins through more effective negotiation is
critical to developing long-term, win-win relationships with
clients.
Obviously it is no surprise that purchasing is focused on
getting the lowest price for their organization because that is
how their performance is measured!
This situation becomes difficult when we find ourselves caught
in this “single-item negotiation”. The solution to this
challenge doesn’t present itself at the end of the sales cycle
when we are most frequently meeting with Purchasing. It occurs
at the beginning of the sales cycle. Here are a couple of
suggestions:
1. Meet with all the buyers who influence the sales. Spend time
to truly understand what they need to accomplish. Ask them to
quantify the value and help you to understand the cost of doing
nothing.
2. Ask your coach to assist you to make sure that you have all
of the necessary information and that you have covered all the
bases.
3. Communicate the results that your solution provides. Use
language appropriate to the role of the buyer. For example,
communicate how your solution helps the Final Approver to take
costs out of the system or how implementation of your solution
will be seamless and foolproof for the users of your products or
services.
4. Ensure that when the time has come to meet with Purchasing
that you have spent time with all of the key buying influences
exploring ways to “Expand the Pie” by finding items of joint
value.
These strategies will enable you to present a strong case in
support of the fact that price should not be the singular focus
of the negotiation.
|
