Posts Tagged ‘collaboration’

Should Sales Negotiators Be In Long Term Relationships?

Tuesday, April 7th, 2009

Do Buyers Or Sellers Get More Out Of A Long-Term Relationship?

Do Buyers Or Sellers Get More Out Of A Long-Term Relationship?

Who wouldn’t want to be in a long term relationship? I mean we wanted our parents to be in one, we want to be in one, movies always end by having the hero walk off into the sunset and into a long term relationship, right? It turns out (as with so many things in life), when it comes to sales negotiations it depends on what side of the table that you’re sitting on as to if you should want to be in a long term relationship…

Let’s be straight here, getting ourselves into a long term relationship makes life sooo much easier. There are all sorts of benefits like reliability, friendship, and even peace of mind. However, it has been shown that over time these types of relationships start to favor one party over the other. Here’s what can happen:

  • You can lose your objectivity
  • You can become compliant
  • You can lose your company’s secrecy
  • You can become too dependent on the other side

If you are a seller, then getting into a long term relationship can be a very good thing. Generally speaking, long term relationships favor the seller over the buyer. Here’s why:

  • More often than not, product specifications change over time.
  • Changes in product specifications tend to increase the seller’s margin.
  • The seller can tailor standard offerings into special products and charge more for them.
  • The seller has fuller access to the buyer’s organization – the reverse is not true.

Sure seems like the seller has an unfair advantage doesn’t it? Buyers should take heart, there are actually a number of things that a buyer can do to even the score:

  • Change buyers every few years just to shake things up.
  • Expand the number of competitors vying to be your supplier.
  • Have another group evaluate each long term relationship every so often.

Long term relationships do have their advantages; however, just as with your love life, you need to step back every so often and make sure that this relationship is the right for you right now.

Are you currently in a (business) long term relationship? Are you the buyer or the seller? Do you think that this relationship is still a good one to be involved in? How can you double check this? Leave me a comment and let me know what you are thinking.

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10 Tips For Getting Satisfaction While Negotiating

Thursday, October 16th, 2008

You're In Trouble If The Other Side Can't Get No Satisfaction

Ok, so the title for this post is a bit screwy, but hopefully the point is clear: at the end of the day, negotiating is all about having both sides leave the negotiating table feeling satisfied. They may have had to give in on some things; however, in the end they both got what they really wanted. Now this all sounds fine and dandy, but just how does a negotiator go about making sure that everyone is going to become satisfied?

The first step is to realize that a negotiation is really just a specific type of relationship. Even as the world continues to change around us and new ways of doing business emerge such as outsourcing, strategic alliances, and partnerships one thing remains constant: negotiating is always needed. However, how we actually go about negotiating is also undergoing a transformation. As both sides of the table now often have many partners in common, it makes sense to ensure that everyone has a good working relationship because undoubtedly we’ll be doing business again in the future.

When we use the “R” word (relationship) this means that we are starting to talk about how satisfied each side of the table is with the deal that is being worked out. It goes without saying that depending on your actions you can either be building or diminishing the other side of the table’s satisfaction. It’s way too easy to dimish satisfaction so we’ll focus on building satisfaction up.

There are two quick ways to do this. The first, interestingly enough, is to tell the other side “No” one more time. Whereas this does not at first seem to make sense, if you think about it you’ll see that it really does. In order for the other side of the table to feel as though they “got a deal”, they also need to feel as though they worked for it. If they sat down, made a request, and you agreed to it, then they would leave the negotiating table feeling deeply dissatisfied. The reason for this is because you didn’t negotiate with them – they got something for nothing. Although you might think that this is the best possible outcome, it isn’t . They won’t be satisfied. However, if you say “No” then they’ll need to work to reach a deal. Once a deal is reached, they will feel as though they “earned” a good deal.

The other way to ensure that the other side of the table leaves with a feeling of satisfaction, you need to remember the A.I.R. rule. A.I.R. stands for “Ask for something In Return”. Never give up something for free. By asking for something in return, the other side of the table will feel that they “earned” what you gave to them.

In order to help you with the thinking about how best to ask for something in return, here is a list of things that you could ask for during most negotiations:

  1. Better payment terms
  2. A longer term contract
  3. Who is responsible for delivery?
  4. A freeze on prices
  5. Most favored nation price guarantee
  6. Have them buy additional products
  7. Delivery options
  8. Changes in staffing
  9. Changes in specifications
  10. Warranty

How did you feel the last time you left the negotiation table – were you satisfied? Why or why not? Do you ever take the time to think about how satisfied the other side must be? What have you done during a negotiation to ensure that the other side left the table feeling satisfied? Leave me a comment and let me know what you are thinking.

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Posted in satisfaction | 1 Comment »