Learning to #negotiate on the road
Negotiation skills are a key skill for any Procurement professional. And really most roles. Learning on the job and interactive negotiation trainings are great to get you there. But some useful (intercultural) negotiation skills and learnings can actually be picked up on the road while travelling! The oriental bazaar is the prime example of a high pressure negotiation environment, at least for those of us not familiar with the culture. But there are other good lessons from the road:
Different cultures have distinctly different ways they approach negotiations and pricing. The factual style and “the price is the price” in Germany to the relational “have a tea and then we talk about price” at the bazaar. Understand the style of your counterpart in a negotiation and come some of the way if not matching their preferred style and you’ll reach an agreement more easily.
English speakers or others just operating in their native language can be quite clueless and insensitive as to how hard it is to operate in a different language in business settings. Travel can open your eyes – when you have to negotiate with only few words available to you in the foreign language, it can be an anxiety inducing and frustrating experience. Think of that, when tempted to act superior or patronizing in your next negotiation with a non-native speaker.
Avoid being taken hostage
If you have ever been put in a situation where you had to buy transport in a remote location abroad for example, you know what it means to be taken hostage and having little choice but go for a bad deal. Make sure that at work you are prepared, have time and options to avoid the same scenario and achieve a better outcome. Monopolies and last minute requests still exist, but work to get out of there.
Know your benchmark
In lesser developed countries you can easily fall prey to buyer euphoria. Those ridiculously cheap sunglasses, you have to take advantage of that offer. That is until you notice you could get them for a third of the price down the road and that they fall apart before the holiday ends. Getting specific, locally relevant benchmarks is really important to drive a good deal. Comparing to a completely different price level and neglecting things like inflation and currency fluctuation won’t get the optimal deal.
Who you are is what you pay
In many countries there are different prices for different people. Friends and neighbours, nationals, foreigners and rich foreigners. The price that you are quoted depends on who you are. That is true to an extent for your business as well. If you are in a tightly regulated, difficult to deal with industry you may pay higher. If your company is seen as rich and ostentatious, you will likely not get the most competitive price in the market.
Different packages sell
Shampoo in single serves, mini washing powder boxes or wine in 5lt containers? When travelling we see that what is a normal packing size differs quite a bit, depending on family or household size and available cash of the consumer. The lesson for Procurement is that when negotiating deals across different markets, we need to understand internal “consumer” preference before sealing a deal which is not advantageous for them. Many “global” Procurement teams fail to deliver market appropriate solutions unfortunately.
Build relationships and get extras
Contrary to the “tough cowboy” negotiation paradigm, you notice that being nice to have around, open and sharing gets many returns in forms of invites, free cake from grandma and a drive around town. Building relationships and not just transactions pays off, same applies for the professional world and our suppliers.
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