Inside Sales Telesales Tips Blog

Price Negotiation: 3 Ways to win with purchasing managers

There’s a reason that we show up first when you do a Google search on “price negotiation”. It’s a real area of expertise, and a large part of the success I’ve had in training people to better negotiate pricing issues is because I used to be a purchasing agent myself. Last week, a prospect from a large company called me to discuss our negotiation classes, and I brought up several areas from my training that resonated pretty strongly. So today I’m going to tell you a story from my past to underscore a point, and provide some valuable “street knowledge” tips on negotiating with purchasing folks.

I came into my job as a Buyer by accident. I was teaching for a small school district, part of a larger county school system, when our buyer abruptly left. It was one month before classes started and there was a small warehouse full of unopened boxes with school materials that had been sitting there all summer. There was a basket full of requisitions and purchase orders that had never been processed. Because I had a business background (I started my first retail company right out of high school) and I knew all the school personnel, I was asked to take on the job, and agreed to do it for a year.

I was warned that Clara, a senior buyer with the County, was going to be a problem. She had a reputation for being tough to deal with, and lots of my purchases were going to have to be made in conjunction with her. So my first day on the job, I called her to say hello, and offered to visit her to introduce myself. When I did, I told her that I knew her job was full of pressure, and I wanted to get some tips from her on how to best work with her to make her job easier. We had a great conversation, became good friends, and she became a valued ally all school year. Clara wasn’t a problem at all, it’s just that no one had taken a few minutes to get to know her.

Over the course of that year, she and I had lots of discussions on how to work over salespeople to get the best price. I brought lots to the party, because I’d been grinding salespeople down for several years running my old business. And she and I became great partners in the “good-guy bad-guy” approach to getting better prices.

One thing we both agreed on: if we liked the salesperson, we typically were a bit more amenable to not fighting as much over pricing. But if the salesperson was adversarial, we had a lot of fun grinding, grinding, and grinding. I could probably write a book on the nuances of negotiation, but I leave a lot of that for the inside sales classes I teach today.

For today, I’d like to leave you with three things I think are pretty important when you have to deal with financial buyers, whether they’re purchasing agents of managers. Consider these:

1) Negotiate with one person only. If you’re going to make price concessions, either do it with your technical buyer or your financial buyer (purchasing agent or manager). Fail to observe this rule, and you’ll be giving two discounts.

2) When negotiating with the financial buyer, take a little time to get to know that person. Purchasing is a high-pressure job, and lots of time it’s a high volume job, too. They’re real people, have real personalities, and they have a valuable job to do. Check out their profiles on LinkedIn so you know a little more about them, and can make references to things they like, or common people you know. It can’t hurt to ask about challenges they have concerning vendors in general, and be sure to ask how, in dealing with you, you can make his or her job easier. You’ll negotiate better with Purchasing if he or she likes you. If you come off as arrogant, he or she will move mountains to get you to drastically lower your price, and the time will drag on. If he or she likes you, you’ll gain a psychological edge. Financial buyers often pick their battles, and you don’t want to be the vendor that the buyer has the most fun beating up.

3) Build the value of your offering, and strive to position your product or solution as a sole-source, non-commoditized solution. Purchasing will always try to position your offering as a commodity, so they can grind your price down by comparing your offering with others in the same marketplace. You should have already done your work building your value as the only viable solution in your discussions with your technical buyer. You’ll have to do it all over again with the financial buyer, but you’ll probably have to put it in layperson’s terms. Again, don’t be arrogant.

I really think Purchasing people are a joy to work with, and I think if you keep those three tips in mind, you will too. These are keys to success in working with financial buyers. Add them to your Best Practices Playbook.