Procurement Template – Ultimate 3 Step Negotiation Script

The negotiation script

Looking for a procurement template? Have you been wondering what the perfect negotiation looks like?

Stop searching!

• This template includes useful tips on how to prepare for your negotiation.
• I will also discuss actionable strategies which will help any procurement professional to get better deals.

Every negotiation-process starts with preparation, followed by conducting a sharp strategy, and last but least: the negotiation itself. This article will guide you through all three steps!

First:what is the definition of a negotiation?

Before we explain the three steps that will help you achieve better deals, we start with some context regarding the definition of negotiations. Ultimately, any negotiation is simply about the exchange of variables (in proposals), where it is often the case that the variables do not have exactly the same value for the parties at the table.

What are the key stepsin any negotiation preparation?

The most important thing in preparing for a negotiation is to gather as much information as possible for yourself in order to be able to estimate the interdependence as well as possible (1) to make a good overview of the deal variables (2) and their importance for both parties (3), and then to think about what (4) and especially how you want to achieve your goal (5).

Step 1:Which questions are important to get answered? [Preparation]

Below I’ll take you through the steps above from my perspective, hopefully, it helps you.

1. Who are you at the table negotiating with: are these just implementers, or can they really make decisions in the conversation about whether – let’s name it – the price can also become 10% lower? 
2. The decision-making authority at the table has no influence on your conversation, but it does on the negotiation. When the other side of the table can’t decide, engage in the conversation and put your demand on the table, but don’t have the illusion that it’s already going to be a negotiation. 
3. Do you know other people or companies that procure the same product or service? What do they pay? The more information the better, because with this you can put facts on the table without having to convince (I will come back to this later)
4. How long have you been paying the current prices? Until when does your current contract run, or do you renegotiate every year? If it is an ongoing contract (to say it in football terms): just change the rules of the game while the match is in progress – is of course legally impossible.
5. Power relationship: the fact that you outperform other branches is a negotiating advantage: it is easier to negotiate when the interdependence – for whatever reason – is high. Nice bridge to the next one:
6. Replaceability: How easily can you replace your supplier and vice versa? This also says something about your position. The harder it is for them to replace you, the stronger your position and vice versa.
7. Open every negotiation and start discussing all variables: what are the things that you have actually wanted to include in the contract for a long time, but that were never possible? Remember: which things are important to you? Which variable less? Which are important to them? Give that away ‘easily’.
8. Risk: which party is exposed to more risk in this contract with a % of the sale? The writer or the publisher?
9. Breakpoint: which deal are you satisfied with? Determine this in advance. So: what is your actual wanted outcome of the negotiation, are you satisfied when you improve, or also when you keep compensation equal to current?
10. Always try to move in the head of your negotiating partner on the other side of the table: when is he/she satisfied? What is his / her breaking point?

Focus before every meeting on what is most important for the person’s company I am negotiating with? Make a long list of variables that are important for both you and the company you are negotiating with. The more variables on your list, the better. Rank them before you start negotiation in importance for you and your counterpart. Best deals are created when you exchange the variables with a low value to you and high for the other versus the ones with a high value to you and low for the other one.