Like many key account relationships, our deal had taken significant effort, negotiation and time to secure. Having finally had our proposal accepted by our client, a signature on the contract seemed like a mere formality. That’s when we were stung by the email from the clients purchasing department; to secure the Purchase Order, they would be looking for a 20% reduction in price. Considering we had already met the clients’ budget constraints, this was a shock. We emailed the sponsor to see if there was a problem. Everything was fine, but of course securing the necessary purchase order was out of their hands….. process and all that.
You no doubt have a similar story of your own
What seems to drive these events is the corporate auto-negotiation mindset. Corporate buyers assume a supplier is quoting a top end price in anticipation of being negotiated back down to earth. Though it’s often not the case, the assumption leads to suppliers being viewed with caution, and who can blame them? It’s their job to negotiate hard.
Meanwhile, suppliers worry that they must capitulate to demands or risk losing the business that seemed all but secured a moment ago. Others fall into the trap of breaking down and justifying each individual aspect of their service, each part of which becomes vulnerable to being picked apart in a commodity-style negotiation.
Either way, suppliers become defensive and guarded over time. Many begin to overprice from the very start, thus proving the corporate negotiation assumption correct. That glowing business relationship cultivated during the initial engagement is nullified by suspicion and a battle of wits that serves to benefit neither party. A real lose-lose situation.
It’s easy to forget that at the end of the day, what is behind this interplay is simply a number of human beings trying to do the best for their respective company.
With this in mind, I wanted to change to playing field of our own client dilemma, before negativity had a chance to proliferate. So, I picked up the phone to purchasing and talked about ideal outcomes.
What transpired was a human conversation, devoid of cloaked language and positioning – just two parties acting in good faith in search of the best result for all involved. We both wanted the relationship to be success. It was in both of our interests to agree on a service that provided value for money and delivered on promises. Purchasing were not trying to cheat us, and we’re not in the business of robbing them either.
I cannot praise the Head of Purchasing enough for his refreshing eagerness to collaborate. Contrary to the original request, the price didn’t change much, but that wasn’t important. We conspired together to make life better for everyone. And that’s the whole point. All the client wanted was demonstrable value and a reliable service, not a rock bottom price.
We may have come to the same conclusion after a prolonged series of long-winded emails, but this way led to us wrapping up the deal quickly and with a newfound trust that will only aid in developing a long term relationship.
Such willingness to collaborate rather than negotiate seems like a no-brainer on the surface, but it’s all too easy to get sucked into the power plays so rife in the corporate B2B space. So, next time you catch yourself getting defensive, pause and try to have an honest conversation with the real human being on the other side of that email. You’ll be surprised at the results.