A Systemic Approach to Purchasing Negotiations
Part Two
In the last edition we looked at the purchasing function from a systemic approach, and ended with a number of concepts to be understood before entering into any negotiations. Let us now put these theories into action with several tactics designed to produce positive results:
Tactics
The building of a database. What is it that you have to offer? There’s probably a long list. What do you need in return? That list will probably be long as well. What are the surrounding elements – your service types, the geographical area that you service, and your accreditation status? There are multiple data elements that might be present, and that’s why we compile comprehensive negotiation databases – so that we have all that stuff at our finger tips, easily retrievable.
Selling your strengths. Every organization has things that they are particularly good at, and these areas should be their focus during negotiations. Maybe you excel in clinical quality – point that out, because that has to be paid for. Maybe you have lower prices and that is where you excel. Whatever your areas of competition, focus the negotiations upon your strengths.
Avoiding your weaknesses. And of course, the other side of that coin is to deflect discussions away from the areas that you are not known to excel in. If your prices are higher than other providers in your market, talk about how great your quality is, and make sure and demonstrate that with quantifiable proof from your database.
The use of “appreciative moves” when negotiations stall. Invariably, there will be certain elements that you view as “gifts,” for lack of a better term, and yet are willing to provide. These belong on your negotiations database to be pulled out as good faith offerings when you hit rough waters. For instance, maybe there’s a county that you generally don’t service. When you get to that tough point in negotiations where it appears that no one will budge, you say “I’ll tell you what – you give us this, and we’ll agree to service your patients in this county.” That is known as an “appreciative move,” and these are used to nudge things forward when progress appears to be stalled.
Confronting confrontation phobia. Most people are nice, and because of that, they become uncomfortable when there are areas of disagreement. And yet, if you want terms that are favorable, ultimately you will need to stick to your guns at some point and refuse to concede something. So just accept that going in, and don’t be afraid to disagree if appropriate when the time comes.
Recognize common tactics. There are several that are employed, but perhaps the most common is known as the TPRA – Third Party Restrictive Agent. The car salesperson that has to run everything past the manager, who is never seen, is a great example. You end up negotiating with a ghost. Good cop / bad cop is another common tactic – one person is unpleasant and disagreeable while the other appears more reasonable and willing to concede certain points. Some people call these “dirty tricks.” I don’t think they’re dirty – they’re just tactics. Recognize them and employ your own countermeasures accordingly.