11 expert tips for successful negotiations

From preparation to conclusion: a compact guide to well thought-out negotiation strategies

Author: Thomas Wandler, Managing Director at Kloepfel Consulting Austria

In the world of business and purchasing, the ability to negotiate is of great importance. In this article, we present eleven negotiating tips that will prepare you for the challenges of negotiations:

1st tip: Aim for win-win situations

In negotiations, it is crucial not only to focus on the price, but also to strive for a win-win situation. This means that in addition to financial aspects, service quality and good cooperation with the supplier should also be considered, for example. The idea behind “win-win” is that both parties’ benefit from the agreement and can build long-term relationships. Ideally, there should be open communication in a supplier relationship in order to be able to react promptly to market changes such as rising prices or supply chain disruptions. It is important to make it clear to the supplier that you are satisfied with performance, quantity and quality, but that you are not prepared to pay more than the standard market conditions. The buyer has the opportunity to purchase at reasonable conditions and the supplier can build long-term customer loyalty.

2nd tip: Create a negotiation script

When it comes to successful negotiations, applying the Harvard principle is an effective strategy. Understanding the interests of the negotiating partner is central to this. The focus should not only be on the best price, but also on building long-term relationships and possible joint developments. The Harvard concept emphasizes fact-based negotiation and advises moving away from the emotional level. However, human, honest communication is just as important as consistent insistence on the facts. Preparation plays a decisive role, and this is where the negotiation script comes into play. This involves trying to understand the other party’s interests in advance and prepare the negotiation accordingly. It includes not only the argumentation, but also the timing of certain points or planned breaks.

3rd tip: Bring suppliers up to the same level of knowledge

Supplier events (e.g. a supplier convention or supplier day) are not only used for product presentations, but also to bring all suppliers up to the same level of knowledge. This is done by reviewing specifications and studying documents simultaneously in order to create a solid basis for comparing the products presented.

4th tip: Standardize your own specifications

Purchasing and technology often limit all the raw materials to be procured with manufacturer names, article designations and many other characteristics. This means that there are few or no alternatives and the purchasing department loses its competitiveness. It can therefore be advisable to standardize your own specifications in tenders to ensure that alternative suppliers can also participate and monopoly situations are avoided. This not only promotes fair competition among suppliers, but also enables competitive prices and the appropriate consideration of technical changes in the market. Twenty years ago, we had much more flexibility in the supply chain than we do today. I don’t want to pay homage to the old days, because purchasing has developed massively and become much more important. But back then, technicians talked to their suppliers more about functionalities than about specific products. And this is precisely the solution to supply bottlenecks, price explosions and competitive supply chains.

5th tip: Conduct negotiation training

At Kloepfel Consulting, the preparation is done collaboratively with the client, where we provide valuable tips, such as involving a decision-maker on the supplier’s side, such as a sales manager or managing director. We often simulate negotiations two days in advance so that the customer can apply the knowledge they have learned in practice. This practical preparation not only strengthens the team’s self-confidence, but also contributes significantly to successful negotiation results. The presence of a consultant also opens the opportunity to explore new strategies. In general, structured preparations, including the definition of the negotiation process and the allocation of roles, are essential for success.

6th tip: Thorough research

To prepare for the negotiations, it is advisable to thoroughly research the background information on the suppliers. This includes not only financial data, but also an assessment of the market position, performance in relevant areas and relationship dynamics. Also use digital tools and AI to gain comprehensive insights. By gaining a deep understanding of the negotiating partner, a targeted strategy can be developed and a win-win situation can be sought that goes beyond just the price.

7th tip: Present demands skillfully

In the preparation and warm-up phase, the presentation of the demands should be well thought out and effectively visualized using PowerPoint slides or flipcharts, for example. When selecting the demands, you should also consider including one or two points that you can do without in order to give your negotiating partner the feeling that you are also successful. Although negotiations are based on facts, the interpersonal level also plays an important role, so it is advisable to show understanding for the other party’s objectives. Preparation for different scenarios, especially in emotional negotiation situations, flexibility and appropriate reactions to unexpected turns are crucial in order to be able to assert your demands.

8th tip: Clear communication about the content of negotiations

The decision as to whether and which demands should be communicated in advance should be made strategically. This can be relevant in specific situations such as in the area of capex or when technical details have already been clarified. Early communication provides clarity for the negotiation and prevents unprepared abortions on the part of the supplier. In the case of strategically important negotiations or the presence of a decision-maker, it is advisable to clarify this information in the invitation and set a clear agenda. The supplier should also understand the importance of the negotiating partners, especially external stakeholders. This minimizes potential disruptions and enables the negotiation to run smoothly. Clarity, transparency and openness can help to master even difficult negotiation situations constructively.

9th tip: Keep calm in conflict situations

In negotiation situations, especially when unexpected events occur or targets are suddenly changed by the supplier, it is crucial to react flexibly. Conflicts can arise, whether due to overreactions on the part of the supplier or demands on the part of the customer. In such moments, it is important to remain calm and maintain clear, stringent communication. If the atmosphere becomes charged with conflict, the conversation should be paused and resumed later. This allows for a break and clarification of unresolved issues. If demands are rejected and a disagreement arises, it is important to prepare for this. If necessary, you can refer to benchmarking data and make it clear that comparable offers exist on the market. It is advisable to remain flexible, especially in complex negotiation situations with major financial implications.

10th tip: prompt writing down of the agreed points

Follow-up aims to ensure that the results achieved are effective and implemented in practice. The agreed points should be recorded in writing, also to ensure that they are implemented consistently. The minutes and agreements should then be sent out promptly. A few days later, you should follow up with the supplier to ensure that everything has been understood. Regular communication on the status of implementation, both internally and externally with the supplier, helps to ensure that everyone keeps to their agreements. After a negotiation, relationships with suppliers should be maintained on an ongoing basis.

11th tip: Learning from negotiations

In regular feedback loops, we help our customers to evaluate their negotiation performance. Keep a regular argumentation book to document the demands, arguments and reactions of your counterpart. This enables you to continuously improve your negotiation strategy and deal with recurring patterns in a targeted manner.

Conclusion

The art of negotiation covers various strategic aspects, from preparation to follow-up. Taken together, the above eleven tips not only contribute to successful negotiation outcomes, but also promote sustainable, mutually beneficial collaboration between buyers and suppliers. In the complex world of market conditions and negotiations, it is often helpful to draw on the specialist knowledge of experts. As “temporary colleagues and coaches”, companies such as Kloepfel Consulting offer experience from numerous projects, large networks and extensive market knowledge to enable fact-based negotiations.

Would you like to take your negotiation skills to the next level and close better deals? Do you lack the resources? We have the solution for you! Get in touch with us now and become a negotiation expert: www.kloepfel-consulting.com

Author:

Contact:

Kloepfel Group
Christopher Willson
Tel.: 0211 941 984 33 | Mail: rendite@kloepfel-consulting.com