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The Art of Vendor Negotiations

The Art of Vendor Negotiations. Bob Fishbein, AVP Business Operations Berkeley College Track: Management. Agenda. Negotiating Mindsets (Buy/Sell Sides) Positions of Power Negotiation Tactics Deadlock Strategies Cultural Differences Basic Do’s and Don’ts Useful Websites Q&A.

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The Art of Vendor Negotiations

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  1. The Art of Vendor Negotiations Bob Fishbein, AVP Business Operations Berkeley College Track: Management Annual Meeting April 7 - 10, 2013 Orlando, Florida

  2. Agenda • Negotiating Mindsets (Buy/Sell Sides) • Positions of Power • Negotiation Tactics • Deadlock Strategies • Cultural Differences • Basic Do’s and Don’ts • Useful Websites • Q&A Annual Meeting April 7 - 10, 2013 Orlando, Florida

  3. Bob Fishbein: Professional Background • 20+ Years Multi-Unit Business Operations • Higher Education • Berkeley College • AVP of Business & Auxiliary Operations • Columbia University • Executive Director of Operations • Corporate Operations • BJ’s Wholesale Clubs • AVP Regional Operations • CompUSA • Regional Director of Sales Annual Meeting April 7 - 10, 2013 Orlando, Florida

  4. Berkeley College • 7 Campus locations within NY and NJ • Approximately 8,500 Students • The School of Professional Studies • The School of Liberal Arts • The Larry L. Luing School of Business • Berkeley College Online Annual Meeting April 7 - 10, 2013 Orlando, Florida

  5. Negotiating Mindsets (Buy/Sell Sides) • What are the “pressure points” of the other side? • Sales Quotas • End of Life Merchandise • Rebate Dollars • Margin Dollars • Deadline Dates • Service Levels • Market Share • Vendor Competition Annual Meeting April 7 - 10, 2013 Orlando, Florida

  6. 4 Main Pressure Points • Time(biggest leverage point in negotiations) • Vendor Options (real or perceived) • Controlling Emotions (able to walk away) • Information(ask focused questions) Annual Meeting April 7 - 10, 2013 Orlando, Florida

  7. Negotiating Mindsets (Buy/Sell Sides) • Ask focused questions • Was vendor ‘XXX’ in the news recently? • When does the proposal price expire? • Is the expiration date negotiable? • What is the “cost breakdown” of the service or product? • Do you work on commission? • Are you meeting your quota? • Must Have / Would Like to Have (wants or needs) • No predetermined assumptions Annual Meeting April 7 - 10, 2013 Orlando, Florida

  8. Positions of Power • Power as a mindset (perception is reality) • Plaintiff (first position) • Defendant (second position) • Assumptions create anchors (good and bad) • Create anchors in the right place (high or low) • Create “needs” for the other side (the iPad marketing) Annual Meeting April 7 - 10, 2013 Orlando, Florida

  9. Positions of Power • Legitimate Power (job description) • Knowledge Power (subject matter expert) • Negotiating Skill Power (training and experience) • Assumed Power (mindset) Annual Meeting April 7 - 10, 2013 Orlando, Florida

  10. Negotiation Tactics • Reference Karrass Effective Negotiating • The Bogey (“I love the proposal but only have $xxx dollars”) • The Crunch (“You’ve got to do better than that!”) • The Nibble (“What tie are you giving me with this suit?”) • Garbage on the Lawn (Listing all the past service issues) • The Flinch (Showing shock on price and waiting for response) • Tying a String (Added concession for agreement) Annual Meeting April 7 - 10, 2013 Orlando, Florida

  11. Deadlock Strategies • Change Meeting Location • Introduce New or Updated Information • Change Negotiating Team Members • Change the Shape and/or Time of Money • Take a Break or Time Out • Talk off the Record Annual Meeting April 7 - 10, 2013 Orlando, Florida

  12. Body Language • Perceived Energy Level • Pause Before Responding • Hand Gestures • Sitting Defensively • Feet Direction • Mirrored Behavior (smile) Annual Meeting April 7 - 10, 2013 Orlando, Florida

  13. Body Language • Reference Darcy Brooker Animation Study • Up-Left Remembering • Up-Right Creating • Down-Left Searching • Down-Right Feelings • Quick-Close False Annual Meeting April 7 - 10, 2013 Orlando, Florida

  14. Cultural Differences • Richard D. Lewis, Founder of Berlitz School of Language • “When Cultures Collide,” (1996) Annual Meeting April 7 - 10, 2013 Orlando, Florida

  15. Basic Do’s and Don’ts Annual Meeting April 7 - 10, 2013 Orlando, Florida

  16. Useful Websites • www.karrass.com • http://www.amanet.org/ • http://www.negotiationskills.com/ Annual Meeting April 7 - 10, 2013 Orlando, Florida

  17. Q&A • What negotiation strategies will you start doing when you return to your campus? • What negotiation strategies will you stop doing when you return to your campus? Annual Meeting April 7 - 10, 2013 Orlando, Florida

  18. NAEP Professional Development • Tier II - Procurement Academy • February 2014 • Nancy Brooks, MPA, Iowa State University • Christopher Johnson, C.P.M., University of Idaho • Burr Millsap, CPA, M.B.A., University of Oklahoma • Robert Haverkamp, Esq., The Ohio State University (retired) Annual Meeting April 7 - 10, 2013 Orlando, Florida

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