The Buyer’s Perspective 21 Key Areas- Part 1 by Bill Levell

At ISM Dubai, a course we often run in-house and cover during our selling skills course, is looking at a sale or negotiation from the buying perspective. This holistic approach needs to be understood by sales people to help drive their own success. In this three part blog Bill Levell will cover buyer views comprehensively.

From the buyer’s perspective engaging with a potential supplier calls for detailed information gathering through whatever means are appropriate.

There are several key areas to explore in depth through desk research, asking questions and holding discussions to assess suppliers and their proposals in all relevant areas.
Here are some examples of these areas, not all are always essential, and there will be others which I have not listed which are industry/technology specific.

1. Capability

Does the supplier’s staff have the skills and experience, including specialised technical knowledge that they will need to meet the requirement?

2. Experience and track record

Past experience should be examined in sufficient detail to give confidence that the supplier has the right ability. This may include visits to customers of the supplier or to the supplier’s premises. The principal objective is to assess how much of the supplier’s experience is relevant to the buyer’s requirements and how they can back up their responses with evidence that they have provided similar solutions before. Questions like:

1. Has the supplier fulfilled requirements of a similar type, scale and/or complexity before? If they have, was their performance satisfactory?
2. What problems arose, and how will they be avoided on this contract?
3. How well does the supplier’s experience and track record back up their proposal?
4. What evidence is there of the supplier adding value by adopting proactive approaches, making improvements, building strong working relationships and so on?
5. Can the supplier demonstrate a spirit of co-operation in their past or present customer relationships?
6. What is the supplier’s track record on team-working, relationship management and/or partnering? What evidence can be sought supporting their proposals on working together?

3. Capacity

It is important to validate the totality of the declared resource skills against overall supplier resources.
If the supplier has high reliance on one major customer, this may present a risk to the project. This does not necessarily mean that the supplier must be rejected out of hand, but the risk should be analysed, considered and managed like other project risks. Questions like:

1. Does the supplier have adequate capacity and resource for the requirement, both now and in the future?
2. How many experienced staff does the supplier have working in relevant areas?
3. What other contracts does the supplier currently have running that could affect capacity?
4. What other contracts is the supplier bidding for? If they won them, would this affect capacity available for this requirement?
5. Does the supplier give sufficient consideration to ensure that there is sufficient flexibility to adapt to changing business needs?
6. Can the supplier demonstrate that it has the necessary resource forecasting experience and perhaps models for capacity planning purposes?
7. Is there evidence that SLA requirements are used to define availability plans and targets?
8. Does the supplier monitor actual performance against availability targets?
9. Does the supplier have adequate methods and procedures for monitoring service capacity and tuning systems performance?

 

The next two parts to this comprehensive look at the Buyer’s perspective will be published in the next fortnight and if you have any thoughts on what else should be included please let us know.

 

 

There is an increasing amount of discussion about recession returning. All the media are gloomy about the continuing impact of recession on businesses.

This has an effect on businesses and their people, not only in terms of generating negative thoughts but believing them. These negative thoughts affect the way in which businesses see their prospects of future survival. It is vital, if you want to succeed in these conditions in any market to ensure that a positive outlook is maintained , essential marketing, sales and negotiation skills are energised and activities increased. In times of recession it is tempting to cut sales activities which can only lead to further limitation of sales results.

During such times customers place increasing importance on finding suppliers on whom they can rely and who provide them with valuable support.

When the going gets tough it’s not the time to withdraw but rather to become more proactive – increase marketing efforts, strengthen sales activities and sharpen negotiation skills. Even if the business potential is limited, it is essential to be even more active and more focused to ensure of being well placed to capitalise on the opportunities that will exist when recession is finally over.

Customers will be looking for ways to improve their profitability through negotiating better prices and value. They will be spending more time in analysing the differences between competing offers, however, this will not be limited to price alone. They will also be making comparisons of:-

• Performance
• Cost reductions
• Delivery
• Quality
• Support
• People and relationships
• Financial stability

Customers/buyers are not committed to buying at the lowest price – they know that the lowest priced supplier does not have 100% of the market and they recognise that there is always price differentiation. It is rare that the lowest priced offer secures the business.

What is more important, is for the customer to achieve the lowest cost of ownership of the product or service. Attempting to negotiate a single variable such as price will almost certainly lead to suppliers having to concede part of their profit to the buyer.

Effective negotiation requires suppliers to thoroughly understand the value proposition of the competition compared to their own. The implications are that it is essential to assess all of the variables on their values not just price. Think about the factors that influence the customer’s evaluation e.g.

• What are the costs and risk involved in changing supplier?
• What is the long-term impact of building strategic relationships and support?
• What will be the impact of the products and services on the the customer’s products and organisation?

When negotiating, it is in the interests of both parties to establish measurable, additional value by trading multiple variables simultaneously. It is much more effective to avoid reacting to price reduction demands and to focus on demonstrating how to help the customer achieve their internal objectives whilst getting valuable concessions from them in return.

Market recession provides great opportunities to increase credibility and customer acceptance through demonstrating a thorough understanding of their value requirements and trading all variables effectively.

The ISM Training Dubai courses “ROI Selling Skills “and “Advanced Negotiation” provide high skill building which will contribute significantly to maintaining profitably and securing competitive advantage during recessionary times.

Negotiation is a dynamic, complex skill and one that is difficult to master. During a successful negotiation both parties whilst inherently in conflict with each other must reach a mutually beneficial agreement and be broadly satisfied with the outcome (Win-Win). Both sides should feel that a fair conclusion was reached, the agreement will be delivered as negotiated and importantly want to work with each other again. The adversarial element must be tempered if you are to reach a reasonable, successful outcome and a number of variables may have been traded. The variables (must haves, ideals, loss leaders) are at the heart of the negotiation and their importance to each party will be on a sliding scale, it is up to you to determine their priority through sound groundwork and optimize the trading. Be aware that minimizing a trade may not work in the Middle East. Indeed the first step,’ preparation ‘should have guided you towards any cultural context of discussions. If you are negotiating in an international setting your cultural intelligence, knowledge and cross-cultural skills will need to be developed. There are several stages in negotiation which need to be followed in order for it to be successful, it is a process.

Planning for negotiation will pave the way for smoother communication, you will be able to predict most if not all outcomes and you will have a good knowledge of all parties’ needs .Negotiation cannot be rushed , you need to first establish a rapport and be able to effectively and clearly communicate without being too jargonistic. You need to build trust with shared values, views, attitudes, experiences, and interests.

Your communication should have the right balance of empathy and yet be able to project your own ideas. Your persuasive communication skills should focus on listening more than questioning, with no perception of their position you cannot be persuasive. Make sure it is focused on helping them reach a decision; they need to explore your ideas and come to a net benefit for them. The persuasion process should mimic the stages they go through in their decision making process e.g. in exploring their concerns you should be ready to handle objections. Ultimately you need to have a commitment to act but this cannot be achieved without first exploring the stages involved in decision making. Only once agreement is reached can you move onto the final negotiation. There are many useful tactics to consider during negotiation but ultimately you should concentrate on building agreement, listening to and interpreting their language and maintain a open professional outlook that acceptably drives the negotiation to a win- win conclusion. Concessions should not be given up without extolling their benefits. Remember cost may not be the key variable you think it is after you have successfully established the true value /potential of your business partnership and ability of your product to meet their needs.