Should business stakeholders be present in negotiations?
This is a question which polarises procurement negotiators. Those who are against this are often vehemently against. The most obvious reason is that, as an organisation, the fewer people in direct contact with the supplier, the less opportunity the supplier has to manipulate the decision making in that organisation. As a negotiator, it is all about having control of negotiations.
Experienced negotiators will mutter under their breath that most business stakeholders have no clue about what to say and what not to say in negotiations. Although, telling them so is probably not the best way of building an effective working relationship between Procurement and the BU as you begin a negotiation.
Personally, I prefer to include one or two key players; usually the budget owner and the technical expert. In software negotiations, the complexities surrounding what the software must be able to do and how it will be used often require the presence of someone who knows the technical requirements. If the budget owner is involved, there is less chance that procurement can be blamed for a bad deal. But the inclusion of these people should depend on their negotiating ability.
Moreover, recent gaffe by an inexperienced member of my negotiating team is testing my convictions on this.
The supplier’s sales person spent the majority of a 30 minute call trying to understand what kind of price point we would accept. Despite having the agreement of the team prior to the call that we wanted to have the supplier’s offer before we would begin price discussions, our budget owner cracked under the interrogations of the salesman… in the closing minutes of the call he blurted out exactly what our budget was.
I could not believe my ears. Vigorous tapping on my keyboard to try to get the message across on our chat window… “SHUT UP”! Too late, the damage was done.
Could I have done more on our prep call to explain why we wanted the supplier’s offer before reacting to the price? Perhaps. I thought I had. Maybe he was multitasking and didn’t hear me. However, it is more likely that he simply succumbed to the incessant questioning.
Negotiating with software vendors day in and day out, jumping from one difficult phone conversation to the next, it is easy to forget how easy it can be for those with little negotiating experience to succumb to a supplier’s barrage of information seeking questions.
For the novice, it is uncomfortable to hear a sales person floundering around fishing for information to be able to price his offer. There is an urge to help, to frame things, to give some explanation and generally to fill the silence with talk. If you talk, you give control to the sales person. If there is one thing software salespeople are good at it is making people talk.
To the experienced negotiator the groping around for information in the early stages of a negotiation is just part of the game. Mostly we want to let the software vendor make an offer, and then can bracket it as we please, giving us greater control of the negotiations. This is especially important for software purchases where the price of the software is determined largely by how much the sales person thinks you will pay for it.
Don’t underrate the effectiveness of shutting up!
If you have questions about how to do this, or stories to share, post a comment on “control of negotiations” in the SoftwareSpend group on LinkedIn.
Image credit: “Quiet” by Paul Mison, Creative Commons, Flickr.com