10 Basic Tips For Negotiating More Effectively

Blog Post Published on Kent Business TV (May 2011)

Last week’s third episode of The Apprentice (UK) left me amazed at how poor the candidates were at negotiating. Apart from one candidate called Jim (who actually looks a possible winner) – the others did not appear to understand the basic principles of how to get a better deal when negotiating.

This short blog aims to provide a number of practical tips on how to get a better deal when negotiating and draws upon my own experience of working across a number of challenging market sectors: retail, fmcg, electronics, distribution, market research and media.

Know what you want…

Identify exactly what it is you want to buy/source and find out where you can get it. There are many supplier directories now available online and your industry media partner’s magazine or website will help point you in the right direction. Don’t forget to use WOM (word of mouth) – ask your personal business contacts who they are using and get some background on their experiences in dealing with certain suppliers.

Know your budget…
This is common sense, but it is perhaps the most important variable – there is no point wasting your time trying to source suppliers and items which are clearly too expensive. It is critical that you keep in mind the budget that you have available and try to use your negotiational skills to maximise it. If you are quoted a price, never leave it on the table without a challenge – you have to work hard to get a good price, so be prepared to put the effort in.

Do your homework…
Establish the market cost structures for the service/products that you wish to source. A good marketer will always have an excellent knowledge of how much it will cost for advertising, event sponsorship, promotional items, printing collateral, design labour costs etc – using their previous experiences to help provide them with clear market benchmarks for negotiating. The price you pay for anything will always be dictated by the market value (what people are prepared to pay for it). It is important to get at least 3 competitive quotes from different suppliers as this will give you an idea of the price differences.

Know the market conditions…
The current economic climate means that buyers are in a very powerful position to negotiate and suppliers are under more pressure than ever to get that order. The rise of social media marketing is clearly putting pressure on industry media partners as brands’ can now implement PR and marketing campaigns without any cost to their business – this means that marketers are in a strong position to get a good bargain when negotiating advertising, events, webinars, advertorial and contact lists to name but a few (this should be used to your advantage).

Look at the bigger picture…
When looking for a special deal, always remember that building a long-term relationship with your supplier will enable you to secure a better price – make sure you emphasize this when negotiating. Suppliers will want to work with you on a price if they believe there is going to be a long-term relationship at stake. Even if this is not the immediate case, you can still sell the idea that you are working towards the selection of a number of partners for the future.

Ask for what you want…

Too many people skirt around the issues when trying to haggle over a price, make sure you ask exactly for what you want and make it clear up-front what you are prepared to pay for.

Timing is everything…
If the supplier thinks that you will be able to do a deal quickly, they will try harder to get the right price for you. Everyone is trying to get an order on the books and if they can see that something will be agreed today/tomorrow – you might just get that great price!

Use charm with integrity…
Use your personality, enthusiasm and charm to give you an advantage when negotiating. Getting a fantastic price on something really can be influenced by the emotional/rapport factors in play – being polite, friendly, genuine and direct can work, but do it with integrity.

Stay in touch…
A good marketer will stay in touch with all his/her existing/potential suppliers as part of the relationship building exercise. This will serve 2 basic purposes: it allows you to stay up-to-date with all commercial market opportunities/pricing points and it will always help you develop a better long-term relationship (which helps every negotiation for the future). It is also worth catching-up with your contacts near the end of the month to see if there are any last-minute opportunities as most sales professionals will have a monthly target to achieve (your chances of getting a better price will be improved if they need a quick sale to help them out).

Draw upon experience…

Demonstrating that you are a good buyer will help promote your credibility within the negotiation process i.e. if you have spent £xx in the past 12-months sponsoring a number of events, then you will be in a stronger position to negotiate on that next event.

I hope you have enjoyed reading this blog entry and remember this post is just a basic outline of the key variables which I believe to be important – there will be others! Feel free to add your own comments and suggestions.

If you found this blog interesting – please feel free to share it!

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