As discussed in Common Negotiation Ploys, while your goal as a procurement and contract professional is to get the best deal you can, the sales people at each and every vendor that you deal with have the same goal. And while you’re splitting your time between determining internal customer requirements, writing RFXs, negotiating contracts, managing contracts, and educating and managing your internal customers, your sales counterparts get 100% of their time dedicated to sales — and they’re spending all of that time trying to figure out ways to get more money from you.

And if they can’t get it from an honest day’s hook, the vast majority have no problems getting it by a con man’s crook. Your average sales professional has a dozen ploys ready to go before they even contact their first customer, because they get weeks of training before they’re let out into the field while you get a 2-hour crash course in negotiations, if you’re lucky.

So what can you do? First, you can learn what the common ploys are (as discussed in Common Negotiation Ploys and Some Basic Counter Tactics) and how to spot them, then you implement basic counter-tactics, as described in Stephen Guth’s Contract Negotiation Handbook, and, finally, you take the offensive using some negotiation tactics of your own.

There are at least eight solid counter tactics that you can use to counter the sixteen plus ploys an average vendor will throw at you. This post will discuss three of my favorites.

Power of No

If the vendor won’t budge on price or terms at all, and you know there is considerable margin in the deal, just say “the deal is off” (and give reasons such as the internal customer changed their minds, budget was not approved, etc.) and wait. The vendor will then start e-mailing / calling everyone looking for a chink in the armour to exploit and revive the deal, but if everyone holds fast, and the deal is for a significant amount of money, the vendor will eventually make concessions to save the deal.

You may have to “burn” yourself with the vendor to make it work, where the customer becomes the primary negotiator and you work behind the scenes, but it almost always works, as long as everyone holds fast and provides a unified front of “no deal” because vendors panic when they think they have lost a (big) deal, especially if they thought it was “in the bag”.

Columbo

If you’re willing to become the slow-witted police detective that uses his shabby appearance and absent-minded persona to lull suspects into a false sense of security, and wait until the deal is done to try for “one more concession”, and the concession isn’t ridiculous, it’s often an easy way to get one more concession from the vendor.

Columbo was successful because he always started out by pestering suspects with seemingly trivial questions, which wore them down, and then he was able to pop his signature tactic of exiting the scene of a conversation but then stopping in a doorway or returning one moment later with a “just one more thing” on the unwitting suspect who then went berserk and confessed. It worked because the subject had already mentally closed the door on the conversation and dropped his or her guard.

In the same way, if you wait until the vendor thinks the deal is done and all that is left is getting the contract executed, and you ask for just “one more thing” that is reasonable, you can take advantage of the vendor’s strong desire to close the deal quickly to get the contract signed. For example, a few days of free training, an extra few months free before maintenance fees, better on-site service guarantees, which don’t cost the vendor much but cost you dearly because of their mark-ups, can often be acquired at the last minute with no negotiation effort on your part if your customer is willing to sign tomorrow.

Price Slice and Dice

This requires some mathematical and technical skill on your part, but if you’re willing to dive into the data, you can often reverse engineer the vendor’s pricing to determine how much you really should be paying. If you can get a variety of pricing scenarios from the data, not only can you attempt to interpolate or curve fit them to various models until you find one that works. However, if you get enough data, you also increase the chances the vendor will slip up and provide you with additional data that is favourable to you (such as formulas in spreadsheets, etc.) that maybe the vendor didn’t want you to see.

The great thing about this negotiation tactic is that it’s easy to get a variety of pricing scenarios from a vendor that wants your business. First of all, the vendor wants to seem helpful and will, thus, have no problem answering innocous requests for various pricing scenarios and, secondly, because the average sales person doesn’t have a lot of mathematical skills (and knows basic math skills are approaching an all time low in North America where less than 1 in 7 American adults are “proficient” at math), he will see no harm in providing different pricing scenarios.

For a deeper discussion of these tactics, and five others (good negotiatior / bad negotiator, silence is golden, signature limit lasso, endless BAFO, and school zone), I strongly recommend picking up a copy of Stephen Guth’s Contract Negotiation Handbook. In addition to a deep dive into common ploys, counter-tactics, and negotiation tactics of your own, it outlines five tactic-killers that your internal customers could unwittingly use to pull the rug out from under your feet and some tips that can make the difference between a great result and a good one.

In Common Negotiation Ploys, we discussed that while while your goal as a procurement and contract professional is to get the best deal you can, the sales people at each and every vendor that you deal with have the same goal. And while you’re splitting your time between determining internal customer requirements, writing RFXs, negotiating contracts, managing contracts, and educating and managing your internal customers, your sales counterparts get 100% of their time dedicated to sales — and they’re spending all of that time trying to figure out ways to get more money from you.

We also discussed how your average sales professional has a dozen ploys ready to go before they even contact their first customer, (because they get weeks of training before they’re let out into the field while you get a 2-hour crash course in negotiations, if you’re lucky) and defined 16 common ploys that a salesperson might use to take you for a ride.

Today we’re going to discuss three of these tactics, how you spot them, and some basic counter-tactics you can use to stop them dead in their tracks.

Surprise!

The vendor calls you up and says they’re in your neighbourhood and can meet now or just shows up at the reception desk. The goal is to catch you off-guard and unprepared so they can soften you up for another ploy down the road.

This ploy is easy to spot even in the early stages when the vendor makes a point of only calling at lunch or at the end of the day when you are most likely to be at your desk and not in a meeting or, even worse, just shows up at your office.

Countering is easy. Don’t take calls at lunch or at quitting time unless it is from a known number and its important that you take the call. If the vendor representative calls and says they’re in town, thank them for the offer but explain that you’re too busy to meet now, and if they show up unannounced, explain that you can’t meet today because of other commitments (and if reception escorts them to your office, have security escort them back to the door if need be).

Bracketing

The vendor tries to determine what you want to pay and what you’re willing to pay in an effort to work you to the top of the “acceptable” range.

This is a little harder to spot because a good salesperson will never come out and ask what you’re willing to pay, but, over time, and many conversations, will ask innacuous questions that will allow them to create a range. For example, they’ll say “I bet the competition doesn’t charge any less than ABC” and then at a later time say “I could provide a high quality service for XYZ“, ABC << XYZ and if you didn’t refute the ABC, they know they can charge at least that, and if you didn’t tell them to outright jump off a pier at XYZ, they have a starting range.

The counter-tactic is to respond in non-committal and uninformative ways. “I’m not sure what my customer is paying now.” Or “I don’t know what this other vendor charges or if I could release that information“. Or “I’d have to check into that“. Or respond with a question of your own by asking if they could meet a considerably lower price.

Misdirection

The vendor attempts to misdirect you, your line of questioning, or attention away from a shortcoming or issue so that you only hear what the vendor wants to say.

Unless the misdirection takes the form of silence in response to your question, this can be very hard to sport because it can take the form of misleading statements, incomplete facts, or a number of other tricks innocuously injected into the conversation to lead you away from a dirty little secret the vendor doesn’t want you to know.

Your only chance to identify this is to look for verbal cues such as “this is only our test environment“, “that’s going to be in our next version“, or “I’ll get back to you” and your only chance to counter it is to dive deep on critical topics with counter questions such as “what do these numbers mean“, “how many users can this type of environment support“, or “what’s the defect rate of this part in production” and ask again and again until you get a clear answer to the question you’re looking for. If you can’t, and your gut says the vendor can’t deliver, your gut is, in all likelihood, right.

These are just the tip of the iceberg. For a deeper discussion of these ploys and their counter-tactics, as well as thirteen other ploys that an unscrupulous vendor representative might try to use on you, I’d recommend picking up a copy of Stephen Guth’s Contract Negotiation Handbook — it’s an eye-opener!

I recently pointed my readers to Stephen Guth’s Contract Negotiation Handbook that exposes 16 of your dirty tricks which they hopefully won’t fall for again once they read the book and absorb its secrets. As a result, you’re going to have to make some concessions. But what ones should you make?

In order to show you that SI doesn’t play favourites (and is only interested in a fair and level playing field), I’m going to give you five examples where the buyer is right and where you should concede, inspired by this recent article over on MintLife that asks “is the customer always right?”.

1. When it Costs Nothing To Let The Buyer Have Her Way
   Maybe she wants her paper, free training materials, or faster delivery. If the T’s & C’s she wants have no negative impact on your revenue, if you have e-versions of the materials that can be downloaded from your FTP server, or the buyer is paying for delivery, who cares? Concede. And maybe when the buyer feels like she’s getting her share of compromises, she will back off of some issues that are a lot more costly to you.
2. When the Law is on the Buyer’s Side
   If you screwed up on a previous contract, and the buyer is asking for fair restitution (in the form of going forward discounts), and the law backs her up, you better concede this point quick before legal gets involved. Because any savings you negotiate then will be eaten up ten times over by legal fees.
3. When Your Delivery Team Has Been Negligent in the Past
   Even if its questionable as to whether the buyer would win in court, if your team didn’t deliver on past promises, own up and make it right. This will instill a great deal of respect for you in the buyer, remove hostility, and considerably ease negotiations.
4. When The Company Can’t Afford to Lose the Business
   If the customer is one of the company’s top customers, and accounts for a double digit percentage of revenues, even if the customer doesn’t know it, be prepared to make a few concessions. Losing a few profit points is much better than losing profitability as a business. However, this is one concession that should not be made too quickly.
5. If failing to concede would bring shame to you or your department if the buyer brings the complaint to the organization’s C-Suite
   Let’s say you got caught trying to pull the GSA or SOX ploy or, even worse, making a claim that no one pays less than X when another customer made it public they got a great deal from you and paid only 90% of X. You may have been following the internal negotiations playbook, but it doesn’t matter now, because shame on you or the department could be much worse than failing to reel in a big fish. (After all, there are plenty more fish in the sea.) Immediately concede the lie, and if it requires an immediate price drop to the lowest known price, concede that too (with appropriate volume or contract term conditions if the price was granted only because a volume threshold was reached).

While there’s a sucker born every minute, not every potential customer will employ the sucker. So while the followers might employ a sucker you can real in with one of your ploys, there are leaders (who read SI) who won’t fall for them, or stand for any less than what was promised. Remember this, and you’ll get a fair deal from the leaders (who understand that a fair level of profitability is key to sustainability) and survive in your job long enough to reel in the next follower (who employs a sucker) that comes your way.