Negotiating in Life February 28, 2013

How Sellers Benefit from Long Term Relationships Part Two

My advice to those who sell is to break into a new account, even if you have to suffer initial loss. The buyer will be reluctant to let you go if you do a reasonably good job and maintain warm rapport. Salespeople who go one step beyond by befriending the end-users of their product or service, such as the engineering or manufacturing people, will build an almost impregnable barrier against losing the account.

The idea of “buying-in” to gain a customer seems risky, but it usually isn’t. In my experience, buyers take good care of vendors who have been with them for a long time. They are willing to pay higher prices to suppliers who give them no trouble.

One more factor that works for the seller is that the specifications for most products or services change over time. These revisions always benefit the current supplier more than their competitors. Changes serve to increase the seller’s profit margin. A marketing executive I know used to say, “Changes are profits in escrow.” He understood that a losing job can quickly become a profitable one as the specification or scope of work changes.

What can buyers do to offset the seller’s advantages? The seven strategies which follow can help turn things around in favor of an alert buyer:

ONE: Don’t be lazy. Search for competition. Keep the sellers on their toes.

TWO: Don’t be passive about settling for a gradual reduction of services or performance. Be alert and assertive. Face the problem early or you will soon get less for your money.

THREE: Rotate buyers. There is nothing like a new buyer to stimulate a seller’s lagging interest in an old account.

FOUR: Dual-source your requirements whenever possible, even if you have to pay a premium to start with. Competition works wonders.

FIVE: Try to learn as much about the seller’s business as they know about yours. Find out what their costs are, how they make the product, and how badly they need your business.

SIX: Negotiate cost not price. Buyers do better when the basis of discussion is cost. Get breakdowns and negotiate each element of cost.

SEVEN: Work closely with the seller to find better arrangements for both parties. Creative changes for mutual benefit are sure to follow if you look for them.

Long-term relationships are a fact of business life. The main danger for the buyer is complacency. The buyer who learns to treat each negotiation with an old supplier as a new test of the market will keep the seller from exploiting the relationship. In the long run, this will make for a healthier, more durable association that benefits both buyer and seller.

THE PROGRAM WAS GREAT! MY SEMINAR LEADER AND THE STRUCTURE OF THE COURSE KEPT ME CONSTANTLY STIMULATED. I NOW AM BETTER PREPARED TO GO INTO AN IMPORTANT NEGOTIATION MEETING AND STAY IN CONTROL, WHILE FINISHING THE MEETING SATISFIED.

Deanna D.
CASE MANAGER at THE JACKSON LABORATORY

IF YOU HAVE THE TRAINING BUDGET AND TWO DAYS TO SPARE, YOU'LL STRUGGLE TO FIND A PROGRAM MORE FAR-REACHING, ON-POINT, AND INSTANTLY IMPLEMENTABLE.

Jeff G.
BUSINESS DEVELOPMENT MANAGER at THE M.K. MORSE COMPANY

EXCELLENT COURSE, BRINGS MORE CONFIDENCE IN MY ABILITY TO NEGOTIATE. I THINK THIS COURSE IS A MUST FOR ALL EMPLOYEES WHO DEAL WITH CUSTOMERS.

John S.
CHIEF ENGINEERING MANAGER at EXXONMOBIL

THIS WAS VERY EFFECTIVE WITH A STRONG FOCUS ON BOTH-WIN NEGOTIATING.

Kathleen L.
SENIOR ANALYST at BLUE CROSS/BLUE SHIELD OF MICHIGAN

THE KARRASS CLASS WAS THE SINGLE BEST TRAINING CLASS/SEMINAR I HAVE EVER ATTENDED. EVERY TIME WE DID AN EXERCISE IT TAUGHT YOU WHAT TO DO DIFFERENTLY NEXT TIME. THANKS.

Kim C.
PROCUREMENT at AMERICAN EXPRESS

THIS PROGRAM HAS GREATLY INCREASED MY CONFIDENCE AND ABILITY TO NEGOTIATE FOR MYSELF AS WELL AS MY COMPANY.

LaDonna E.
SENIOR STRATEGIC BUYER at HALLMARK

THE NEGOTIATING CLASS WAS VERY INFORMATIVE. THE INSTRUCTOR PROVIDED AN INSPIRATIONAL MESSAGE THAT CAN BE APPLIED TO EVERYDAY LIFE.

Mary S.
INTERNATIONAL SOURCING at FMC TECHNOLOGIES

WE NEGOTIATE EVERY DAY OF OUR LIVES, BOTH PERSONALLY AND PROFESSIONALLY. THIS COURSE DEFINES THE PROCESS AND PROVIDES TECHNIQUES TO ACHIEVE SUCCESSFUL RESULTS.

Phillip H.
VICE PRESIDENT at GE

PRIOR TO THIS CLASS I FELT AS THOUGH I WAS GETTING EATEN ALIVE BY INTERNAL NEGOTIATIONS WITH SALES REPS. NOW I FEEL PREPARED TO CHALLENGE WHAT THEY ARE SAYING AND BET TO THEIR REAL NEEDS.

Steve Q.
PLANNER at HONEYWELL

MANY PEOPLE FAIL TO ACHIEVE THEIR POTENTIAL BECAUSE THEY DON’T SEE THE OPPORTUNITIES TO NEGOTIATE A WIN/WIN AGREEMENT WITH THEIR COLLEAGUES. THIS CLASS IS AN EYE OPENER TO THIS DYNAMIC..

Stuart B.
CONTRACTS MANAGER at HEWLETT-PACKARD
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