In these tough economic times, negotiations often break down because one person is acting like a child or making unreasonable demands. The multi-unit brand buyer or restaurant owner-operator wags his finger across the desk and says to the food sales person, “We’ve done business with your company for 10 years, you know we can’t change our menu and you continue to raise prices."
The manufacturer responds by saying, “Our company policy is to pass along raw material increases. Besides, Barry, you forgot about the offer I made in September that would have locked-in your price for the year."
"Maybe I’ll find another supplier", says the buyer / owner,” I’m through." As he speaks, he involuntarily stamps his foot, and quickly exits his office.
In this example, everybody loses. The buyer may not find another supplier at the quality and price required, and the sales person doesn’t want to lose a customer. Because both parties approached the final negotiation without having a backup plan, they were unable to keep their emotions in check.
We have learned in our consulting practice that rigid positions and role-playing are simply not productive. Here are 5 rules for improving communications during negotiations.
"Maybe I’ll find another supplier", says the buyer / owner,” I’m through." As he speaks, he involuntarily stamps his foot, and quickly exits his office.
In this example, everybody loses. The buyer may not find another supplier at the quality and price required, and the sales person doesn’t want to lose a customer. Because both parties approached the final negotiation without having a backup plan, they were unable to keep their emotions in check.
We have learned in our consulting practice that rigid positions and role-playing are simply not productive. Here are 5 rules for improving communications during negotiations.
1. Don’t let your frustrations about food cost or sales profit margins show. Both sides gain by looking at the problem together.
2. If the buyer or sales person starts to play "the game”, or ignore your concerns, stay calm and keep your emotions under control. Acknowledge that your opponent has financial concerns too.
3. Buyers as well as the occasional sales person often make deliberate attempts to rattle you into closing the deal. Don’t take the bait.
4. A professional gets results, so watch how you say things and never close the door to future conversations. Advice to buyers: start sourcing alternative suppliers. Advice to sellers: never stop closing, but do make concessions.
5. Take a break if you are not making progress; arrange a time where the manufacturer’s executive management can review the situation. After all, the sales person may not want to give up margin to protect his commission.
Resume negotiations only when you have cooled down. Reevaluate your position and agree to an agenda for the next meeting. For example, review price history, changes in markets, evaluate comparable products, consider changes in product specifications or portion size, and work on both a short-term and long-term win-win strategy.
To Higher Profits!
Fred
Fred Favole is Founder & President of Strategic Purchasing Services, a consulting firm specializing purchasing outsourcing, interim staff management and distribution program audits (MDA). He can be reached at (912) 634-0030 or SPS@Gate.net. Follow Fred’s Blog at, https//purchasinginsights@blogspot.com
