How do you, as a buyer, negotiate to get the best prices on goods and services? There are plenty of sources that list negotiation tactics for sales, and chances are your supplier uses at least one of them. So how do you turn these strategies on their head and use them to your own advantage?
In that spirit, we offer six purchasing negotiation strategies you can use to come out on top in your next meeting.
Dealing with the Good Guy/Bad Guy
Salespeople often use the good guy/bad guy selling strategy. One person is on “your side” while the other plays hardball. You’ve probably seen the most classic example in television crime shows when officials interrogate a suspect. Knowing how to recognize and counter this strategy is a great tool to have in your arsenal.
So how do you spin this sales tactic to your advantage? After you’ve discussed a price with the “good guy,” they’ll typically go to speak with the bad guy about the negotiated price. It’s all part of the plan. To intervene, ask to be present for their conversation. Tell them you want to see how they are going to get the price you want. Typically, the good guy will tell you that is not feasible, but you need to insist on it. Now you’ve thrown them off their rhythm. You not only take away the tactic’s leverage, but you also throw off any rehearsed strategy the salesperson may have.
Knowing When to Walk Away
Knowing when to walk away from a negotiation is critical to your success and a common negotiation tactic. The supplier wants you to buy their merchandise. Maybe they’ve said they’ve offered you their lowest price point, but you want it lower. If you aren’t getting anywhere with negotiations and you’ve already reached your predetermined limits, it’s not a bad thing to back out.
Walking away from a negotiation at the right time can not only establish your authority, but it can also swing the pricing in your favor. It is essential not to use this as a bluffing tactic. Otherwise, you may end up walking away without an alternative. Instead, come to the negotiation with a firm limit in your head of what it will take for you to walk away, and a BATNA (best alternative to a negotiated agreement) plan in place so that you can fill the gap if you choose not to do business with this supplier.
Steering Clear of Ranges
You’ll quickly find that a lot of sellers will avoid giving you an exact price. Instead they’ll offer a range of prices for their product, of which your final negotiated price could be on the low or high end (but most likely the high). The low end of the price range will reel you into the discussion when in reality, they intend on starting negotiation on the high end. That way, you will meet in the middle rather than get the low offer you thought you could get based on their original range. Be cautious about price ranges, especially if a salesperson repeatedly quotes the lower end of the range just to get you in the door.
Remembering It’s Not a Two Round Fight
Just because someone offered the first price point and you countered doesn’t mean the negotiation is over. Some sellers might push for a quick decision and immediately say that they’ve gone as low as they can go on price. Continue trying to drive the price down as much as you can, or focus on adding extra benefits like faster delivery or priority access to the deal. The negotiation isn’t over until you sign a contract.
Separating Facts from Emotions
Any good salesperson will know how to manipulate emotions in a negotiation – it’s what makes them great at their job. When they try to use tactics to relate to you on an emotional or personal level, remember to keep the facts of the discussion at the forefront. The facts will help you discover the value of their product, whereas emotions will not tell you how their product will benefit your business.
None of this is to say that you can’t sacrifice some price factors for other elements of the deal, even if they don’t drive a clear bottom-line benefit. After all, negotiation has a human element. Some things aren’t as easily measured but can be just as valuable. However, you shouldn’t make concessions in a deal based purely on emotion.
Presenting Alternatives and Provide Evidence to Show you are Willing to Compromise
Equally, any good salesperson knows that there needs to be compromise in order to make a deal. You’re not going to settle for their first offer. For you, that is just a starting point. Although having alternatives and evidence is useful for their negotiation strategy, you should also prepare your own options. Make the salesperson compromise for the betterment of your business. After all, isn’t that why you’re buying their product in the first place?
Negotiation is a Matter of Practice
Negotiation is a two-way street and you don’t have to settle for the first offer. Salespeople use these tactics to get the results they want, but your results matter just as much. Always remember to get the most value you can for your business, because it’s their product you’re buying and you’re the one who’s in control. As you get better at finding common ground, you’ll notice a steady increase in the quality of your supplier relationships.