Get them to walk away…then bring them back
Wouldn’t it give us great comfort, and negotiation strength, if we went into every negotiation with an alternative supply option in our back pockets?
This kind of BATNA (best alternative to a negotiated outcome) is one of the best there is: you can negotiate assertively and confidently, knowing that if you don’t achieve your objectives, you can simply invoke your BATNA and switch supply to your capable and qualified alternative supplier (taking any switching costs into account too, obvs).
But, and it’s a big but, in some circumstances whether it’s due to a difficult supply market, or due to the product specifications that you require, you don’t have the luxury of an alternative source.
I’ve come across this situation throughout my career, and it can be a really uncomfortable feeling for a buyer.
In these situations, while you may hold the advantage in balance of power factors such as time, market pricing and your relationship, for example, the fact that you’re dependent on the other party can outweigh the other factors.
Importantly, what can you do to protect or create value in a negotiation with such a supplier?
I’ll cover the creation of value in a future newsletter (if I remember: I’m great with delegate’s names, rubbish with a growing list of other stuff).
In the worst case though, we need to be able to protect value. What I mean by this is to not simply concede value by agreeing to every demand of the supplier on whom you’re dependent.
Ultimately, should your negotiation counterpart deem it appropriate, they could just dictate the terms on which your new agreement will be based.
If you’re negotiating with a long-term supplier, it’s unlikely that they’ll behave like this, as it’ll likely breed resentment, harming the relationship, driving you the buyer, to head for the exit to find an alternative source. This is obviously assumes that the supplier views you as a customer that they actually want to retain!
But the challenge is, how you can make sure that you DO try to exploit every negotiation and persuasive angle that you can, so you’re not just rolling-over in submission, like a Bream that’s been caught a thousand times (that’s my first fishing reference ever, right there – did it land?)😕 After all, your seniors will want to know that you didn’t give up without a fight, right?
I’d like to introduce you to 2 related concepts that might help.
Image: Patrick Hendry at Unsplash
The first is from a guru and colleague, Angus Mcintosh – former CPO, while the second is from negotiation meister, Matthias Schranner.
Schranner’s advice is to actively push the other party to their walk away point, but in a very respectful manner so that you don’t burn any bridges and can get them back to the negotiation table.
When the other party walks away, you at least know in your own mind (and can communicate this to your seniors) that you’ve taken things as far as you can.
Then, by using the “I-time-information” framework, you get the other party back to the table for a final attempt at protecting value.
The point here is that each one of these variables can and does change, giving you the logic to bring your counterpart back.
In practice, the framework may translate into a comment such as, “based on the information I received from you on Thursday, I was unable to agree to your terms. However, I’ve spoken to a colleague / have received new information today, that I think can help us agree to a deal. All you have to do is [insert something that’s going to help you protect value]”
Macintosh’s recommendation is to take the negotiation to a cliff edge, again very respectfully, and conclude with agreeing a “process contract” with your counterpart.
The process contract is a verbal agreement of what each party will do next by way of trying to get to an agreement.
The phrasing might go something like this, “we’ve both negotiated in good faith today, and made great progress on several issues, but we’re still far apart on a couple of points, so I’m unable to agree. What I suggest is that you go back to your team and seek improvements to your position on the open points, and I’ll do the same with my team. We’ll then reconvene next week to see if we can reach agreement”.
With a high level of openness and trust with your negotiation counterpart, there’s a good chance that they’ll fight your corner with their team to bring you an improved offer.
These aren’t magic solutions that will get you everything you want from your negotiation, but I think they’re strong options for you to consider, making sure that you’re actually negotiating, rather than simply conceding value to the stronger party.
