Building Power in a Negotiation Without Dominance
Dominant approaches to negotiation can sometimes stem from a level of insecurity. A negotiator with fewer resources or a greater stake in the deal may turn to forceful, high-pressure tactics in order to ensure they get the outcome they want. This approach can work, but it comes with serious risks of alienating your suppliers.
There are ways to demonstrate your value and increase the amount your counterparty is willing to offer without strong-arming or pressure. Two of the most valuable are asking the right questions during negotiation and presenting your own company's unique market potential.
The Right Questions
An open-ended question requires your counterparty to offer you a sort of concession. When they can't simply answer with a yes or no, they need to provide information in order to continue with the negotiation. Carefully considered questions can also reveal holes or inconsistencies in your vendor's position without you having to directly point these issues out.
Vendors may be reluctant to answer questions if they suspect that you are trying to manipulate them. For that reason, the other primary goal of your questions should be to understand their position. If you're concerned about pricing, it may help to ask them about the costs and challenges involved in production. This offers them a chance to explain their prices and gives you opportunities to offer support, concessions, or targeted incentives to lower the asking amount.
You can demonstrate your understanding of your vendor's position by including their top issues in the contract. Make sure the contract clearly reflects the items that are most important to your vendor. Format the document carefully - be sure to convert the file from PDF to Word to ensure there is no confusion. A great-looking contract that clearly outlines their key concerns will impress your vendor and increase your value.
Become a Gateway
Even if you have less overall power or experience than your supplier, chances are you have something they don't or they wouldn't be negotiating with you. Perhaps you operate in a country or area where they do not. Maybe your business appeals to a demographic they would like to serve or you have specific experience in marketing or tech which they have not mastered.
You can make these differences a selling point. If you can offer your supplier a new or unique market opportunity, you gain instant value in a negotiation. You can offer yourself not only as a chance to reach these new markets but as a valuable guide for how to find success in them. Vendors may be willing to lower their prices or offer other concessions in exchange for attractive market opportunities.
Present Yourself in the Best Light
Dominance is a short-term strategy that gets results, but it can make you seem less valuable to your supplier in the long run. Asking the right questions, reflecting their core concerns, and offering them support in finding new markets are some inexpensive, collaborative ways to boost your power and gain advantages in a negotiation.
For more negotiation resources and access to new markets and potential partners in your area, join your local chamber of commerce today.