Insights from a Thought-Leader on How Purchasing People Negotiate
Insights from a Thought-Leader on How Purchasing People Negotiate:from Dave Stein's Blog for Sales Training Buyers and Providers
Ron D’Andrea knows a lot about how procurement professionals approach their negotiations with sales people. If you want your sales team to improve its success rate working with purchasing managers you’ll want to hear what Ron—and his firm—have to say.
Ron is President of BayGroup International, where he leads one of the few organizations covered by ES Research that trains both sales and purchasing professionals. That’s why it made so much sense for his firm to sponsor our most recent research study, The State of Sales and Purchasing, which explored the opinions of 637 sellers and buyers from 159 companies about the current negotiating landscape, where things are heading, and what works in today’s competitive business environment.
Ron participated in our 2011 thought leader panel Selling To and Negotiating With Today’s Tougher, Strategic Procurers/Buyers/Sourcers, and I’ve wanted to interview him one-on-one ever since. Here’s the interview:
Dave Stein: You’re one of the few companies ESR covers that work with both sales and purchasing organizations. How did BayGroup International build its expertise on both sides of the buy-sell negotiation?
Ron D’Andrea: Our initial expertise emerged in a partnership with the Stanford University Graduate School of Business. It focused on effective negotiation across the corporation, so our work naturally evolved into engagements with both sales and purchasing organizations, mostly with large global corporations. As a result we’re now uniquely positioned to bring insights to both sides of the buyer-seller negotiation during our client engagements, sharing what we’ve learned from the “folks on the other side of the table.”
DS: Our recently published research showed that although today’s negotiations between buyers and sellers are seen as competitive, both buyers and sellers agree strongly that the environment will become increasingly collaborative in the next three years. What do you think accounts for this?
RD: As the research data illustrated, everyone agrees that recent developments like e-Auctions, structured RFP processes, and committee decision making have given buyers the upper hand in negotiations. At the same time, it’s clear that things are changing for buyers, that cost reduction alone is insufficient for them to achieve their goals, and that their corporate leaders are demanding more innovation, partnership, and creativity from their suppliers. So although the competition between buyers and sellers isn’t going away, there are new pressures on both sides to work together, innovate, and come up with solutions that offer more than just what appears to be a low-priced solution.
DS: What do you think it means for the kind of training sales people need to get?
RD: The key—and something we focus on a lot in our work—is to manage the natural tension in the negotiation process to allow more creativity and innovation to emerge. Not to give in too quickly, to work hard to inject new and unconsidered needs into the sales dialogue, and to manage the negotiation process in a way that maximizes the opportunity to build a value-based rather than price-based relationship. This doesn’t come naturally to most sales people…in fact we believe the right approach is often very counterintuitive.
DS: What other conclusions did you draw from the buyer-seller research?
RD: We weren’t surprised to find that both buyers and sellers believe the “negotiation support systems” in their organizations are weak. The research showed that negotiators on both sides of the table felt that although their negotiation training might be adequate, the management coaching, sharing of best practices, and technology in their company doesn’t do a good enough job of helping them succeed. Many of our clients are asking us to provide this kind of negotiation coaching and technology support to ensure their investments in negotiation training pay off.
Disclosure: BayGroup International subscribes to ESR’s products and services for sales training providers.
Ron D’Andrea is a recognized thought leader and practitioner in sales negotiation and sales execution. He is President of BayGroup International, a leading firm that works with corporate executives to help them reach sales profitability, cost containment, and team effectiveness goals quickly, and with high impact. You can view a recording of an ES Research webinar in which we co-presented the findings of the “State of Sales and Purchasing” research here (registration required).
BayGroup International recently sponsored ES Research’s “State of Sales and Purchasing” survey (you can view the on demand webinar recording here).
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