I’m yet to come across one practice owner or manager that doesn’t want to keep their practice costs down. But, having the confidence to negotiate with your suppliers is something that many shy away from. With that in mind, ask yourself whether you think you’re getting value for money and the best deal possible from your suppliers? If not, how do you brush up on your negotiation skills?
Practices rely on their suppliers, just as much as suppliers are dependent upon their business, so it’s important that both come out feeling as though they’ve gained from the deal. It should be a win-win situation! Here’s just a few things to consider in the art of negotiating; the big seven principles to be precise:
1. Don’t underestimate the power of the relationship
The more you take the time to get to know your supplier the more you’ll understand their drivers and interests. By making an effort to build a rapport with your supplier, it’s quite likely you’ll reap the rewards with them providing better deals further down the line. If you’ve spent the time and effort to build a solid relationship, stick with just one supplier, your loyalty will soon reap its rewards.
2. What’s in it for the supplier?
You should be clear about what the other side’s interests are; however, this may take a bit of digging and probing to find out. Listen carefully to what they say or don’t say. For example, your sales rep’s objective may be to secure the sale within the month so they hit their full month targets, or alternatively, they may be flexible about when they receive payment providing you with the opportunity of negotiating your payment terms or even the chance of extended credit. On the other hand, to aid their cashflow, a supplier could be after a quick settlement therefore willing to offer you a lower price in return for an immediate payment.
3. Be clear about what you want!
Before you begin any negotiation, be clear about what it is you’re prepared to compromise on and also what you’re not; what factors are most important to you? Write them down as this will help you to establish your preferred outcome; what you’d really like and also your fall-back position, so what you’ll be happy to accept. But keep them realistic with both your preferred and fall-back positions or you may well find it impossible to identify a supplier who’s able to meet your requirements.
4. Understand your interests from your positions
Thinking in terms of ‘interests’ (why you want something) will reap far more reward rather than thinking of ‘positions’ (what you want or how you want it) – this way of thinking will keep you open-minded about the different available options. For example, your position might be, ’24-hour delivery on all ordered items is a must, or I’ll look for another supplier’ whereas your interest may be, ‘ensuring I have sufficient stock to be able to service my patients’ needs is essential’. Being aware of our ‘interests’ means we don’t get locked into our ‘positions,’ making it possible to see more options and achieve a better win:win for both parties.
5. Consider trade-offs
Don’t offer a concession without asking for one in return. It can’t be you give, give, giving – you need something in return. For example, ‘How about we pay for the hardware in full by the end of the month and you agree to providing another training session for the staff covering the nuances and benefits of the new system?’
6. Don’t give ultimatums
Think about how you present your demands; the last thing you want is to push them into a corner by giving them an uncompromising demand. It could make them feel that their only option is to say no. Instead, position your demand as an open-ended question, ‘What would our agreement need to include for you to feel happy about it?’ Then see if you can reach an agreement that works for both of you.
7. Test the water
Test for agreement as you go along. Finding and agreeing those areas where you do agree can help you reach a final agreement more quickly. Summarise on those areas where common agreement has been gained just to make sure you’re reading the other side correctly. This also has the advantage of helping to build rapport – which is where we started with principle number one.
As with most things in life, practice makes perfect and negotiation is no exception. There are many areas where we could negotiate, and for one reason or another, don’t. However, we would all like trusted and reliable suppliers who provide us with great service at a decent price, so why not see how much you can negotiate on your next purchase?
