Negotiating Skills: A Webinar Preview

Suppliers and their customers have one of three types of relationships with one another: vendor, preferred supplier, or trusted advisor (strategic business partner). Each type of relationship is partially defined by the way buyers and sellers within the relationship communicate and negotiate with one another. At the vendor level, tactics and counter-tactics are used to influence perceptions and behavior. As the relationship evolves from vendor to preferred supplier, communication evolves from predominantly tactics and counter-tactics to demands and concessions (tradeoffs). Tactics and counter-tactics are used to a lesser degree because both buyer and seller are more motivated to negotiate “win-win” outcomes.  

When the relationship evolves to strategic business partners, the mode of communication evolves to creative collaboration. While tactics and counter-tactics are used on occasion and demands and concessions are made to keep both the deal and the relationship in balance, the focus transitions from “win-win” to an environment wherein the two primary goals are to: (1) create long-term, mutually beneficial outcomes; and (2) provide quantifiable value to all involved.

Tactics and Counter-Tactics
A tactic is something that one party says or does to affect: (1) the perceptions and expectations of the person or people with whom they are negotiating; and (2) behavior – get the other party to do something they would not typically do. Tactics and counter-tactics are used in all three types of business relationship, but are the basis for communication at the vendor level where the final negotiation leads to a win-lose outcome. When the relationship is at the preferred supplier or strategic business partner level, fewer (and less severe) tactics and counter-tactics are used.  

Tradeoffs – Responding to Customer Demands
Most negotiations in a preferred supplier relationship are about the exchange of perceived value. At this level, the focus is balancing of the various demands and concessions that will be made by both parties. There is give and take, and the motivation for these tradeoffs is to create a win-win situation that is both fair and reasonable for both parties for the duration of the agreement. Balance is the key word for negotiations at this level – in fact, balance is the key for successful negotiation regardless of the relationship or mode of communication.  

Creative collaboration begins when strategic business partners “negotiate” and both parties collaborate to identify all viable options and then select the one that creates the most value for all involved. At this level, because the goals, values, and needs of both parties are in sync, the motivation is to find the best possible long-term solution. That’s not to say that negotiations at this level are devoid of tactics, counter-tactics, demands, or concessions but rather that both parties are committed to each other’s long-term growth and success.

At this level, the seller represents the customer’s best interest within the selling organization and the customer represents the seller’s best interest to the other members of the buying team. Both parties want to resolve issues in a way that creates quantifiable value for all involved. When both parties seek resolution and to create value for all involved, the negotiation will be relatively painless and the relationship will profit and benefit both organizations on a long-term basis.