Friday, April 8, 2011

Communication - Using The Right Words To Communicate

How you communicate is as important as the tactics that you use, as words show conviction. The way you communicate, what you say, the language you use and the way that you phrase it, can either enhance or take away from your power. Concessionary language reduces your power, as it doesn’t show your belief in your power or your conviction on the point. If the Supplier feels that you don’t strongly believe in what you are asking for, the likelihood is you won’t get it. 

Too many Buyers are conciliatory in their requests telling the Seller what they would “like” something or asking the Supplier “if” they can do something. To improve success in your negotiation, be more positive in communicating your demands. Negotiation works best when the approach is tailored to the circumstances and your words show strength in conviction.

Not recommended
Could you give us a quote by _____
We need your quote by _____ to submit our bid.
We would like a quote for various volumes
The customer estimate is _______ per year; I need your best price to win this business.
What is your lead-time?
There is major upside potential so I need your best lead-time.
What is the cost?
I have a target price of _____ so I need to have you beat that, as I know others will.
Can we have cancellation/ returns privileges?
As this is standard product we expect to be able to cancel or return product subject to normal restrictions.
Can you do any better than that?
If we are going to jointly win this business we need you to do better. If we don’t win, you don’t win.
I would like your best price.
We won’t make it past the 1st round with the customer if we don’t get the absolutely best price right from the beginning.
What is your warranty?
Our customers are requiring a ___ month warranty which is consistent with your MTBF reliability data
It would be nice if...
We need _____ to set us apart from other bidders to help us win the business
We will consider that
That wouldn’t be acceptable. (You can consider it an then always go back to what they offered) but saying that you will consider it is a form of concession.
We would like your most favorable terms
To win this business for us jointly we need your most favorable terms and what the customer is asking of us you need to improve.
Can you
We need you to
We would like to buy this from you
We have multiple approved Suppliers from the customers AVL, but would like to buy this from you if you can be more competitive.
We would like
We need
To Suppliers comments:
Recommended response
No (in all forms)
What if we ...  Look for the reason behind the no.
That’s against our policy
We have the same type of policy but have to make exceptions when needed to win the business and this is critical for the deal.
That’s against industry standards
Sellers and not Buyers create industry standards. Buyers would feel this reasonable and consistent with other industries.
We can’t give you that pricing at your volumes for anti-trust reasons.
The law allows you to make allowances for competitive reasons.
I’ll show you the pricing we are giving ____.  You are getting our best price.
Without being able to see their contract I’m not convinced that we are getting the best total cost.
The cost is ___ at this volume and ___ at that volume.
Neither impact your production costs. The price should not be based on an artificial price / discount volumes that bear no relationship to cost.

Suppliers are not mind readers. Be clear in what you want. Tell them what you need. Tell them why you need it. Tell them why it will be good for them. Keep them aware of your other alternatives (especially their competition). Show them why your position is fair and reasonable. You need to sell them that you have conviction. In doing so, never tell them anything that reduces your power like telling them that you need the item or you need to buy it from them. The more you let them assume about what you need, the greater the potential you will either not get what you need or they will give you more than you need and you will pay for it.  For example if there is a broad disparity between your estimate of the cost of the work and their price, ask them for all their assumptions. Many times they may have assumed something that may not be what you need and you can reduce the cost simply by clarifying it.

When possible use any legitimacy you have in your discussions to reduce their power. If you have a good argument why what they are asking for isn’t acceptable, make sure that you communicate that to them.  Show them how difficult it will be to accept their position. Show them how what you are asking for is “Fair and Reasonable” based on what others have agreed. Show them how experts would view it. Show them how the marketplace would view it. Hold them to the representations made in their marketing materials. Last, but not least, show them how it matches their competition both to reduce their power and to remind them of their competition.  All of these things are considered forms of tactics, but they are also part of communicating.

Meeting of the Minds
Make sure you both fully understand what was said and agreed. To do this you always need to periodically summarize what was agreed. If it isn’t clear that there was agreement, probe to ensure understanding or restate what was agreed in a different manner to ensure their understanding is correct. This is especially important when dealing with Suppliers from different countries where language and interpretation can be a barrier.

To be a good negotiator you need to be a good listener! No one ever learned anything by talking, you learn by listening. Listen to what they have to say. Take time to evaluate what it means. Whenever you’re unclear about something, always probe to get additional clarity. To ensure that you heard them correctly summarize what you thought you heard. Listen to them and acknowledge their concerns. Use questions to get more information so that you fully understand those concerns. Once you understand them, you can then speak to their needs, propose alternatives and explore alternative to meet both parties’ needs. If you understand their positions and motivations you can add more information of your own to sell them on your position. You can also agree with their position, but explain why it doesn’t apply in this situation or why it doesn’t apply because of what you need.

1 comment: