Vendor negotiation is a crucial skill for any business that relies on external suppliers, contractors, or service providers. However, before you can negotiate effectively, you need to communicate clearly what you need from your vendors. Here are some tips to help you ensure your vendors know exactly what you need.
The first step is to define your goals and expectations for the project or service you are hiring your vendor for. What are the deliverables, deadlines, quality standards, and performance indicators that you expect? How will you measure and evaluate the vendor's work? How often and through what channels will you communicate with them? Write down these details and share them with your vendor before you sign any contract or agreement.
Briefly introduce the purpose of the procurement goals and expectations communication. Establish a collaborative tone, emphasizing the importance of clear communication for successful procurement. 2. Overall Procurement Objectives: Clearly outline the overarching objectives of the procurement process. Align these objectives with the client's broader organizational goals and strategic vision. Highlight key benefits the client can expect from successful procurement. 3. Specific Procurement Goals: Break down the overarching objectives into specific, measurable, achievable, relevant, and time-bound (SMART) goals. Provide a detailed list of the expected outcomes, such as cost savings, quality improvements, or enhanced supplier relationships.
The second step is to use clear and specific language when you communicate with your vendor. Avoid vague or ambiguous terms that could lead to misunderstandings or confusion. For example, instead of saying "I need this done as soon as possible", say "I need this done by Friday, 5 pm". Instead of saying "I want a high-quality product", say "I want a product that meets these specifications and criteria". Use examples, diagrams, or visuals to illustrate your points if necessary.
Clarity is the key, and if you can provide people with a scope of work, or a criteria, then everyone knows where they stand and people can be accountable as well. For example in my line of work, "I need a gardner" means that I'm looking for a gardener who just does 'gardening' - lawns and trees etc. But what I really need is a gardener who is also a handy man, that can top up sand, mulch and look after the gardens and take rubbish away. You have to be specific.
This is the most important criteria for a beneficial relationship with a vendor. Keep your requirements simple. If ask is a complex one, break it down to smaller chunks of measurable value. Simplified requirements will hell with negotiation also.
The third step is to provide feedback and updates to your vendor throughout the project or service. Don't wait until the end to tell them what you like or don't like about their work. Give them constructive and timely feedback that helps them improve and adjust their work according to your needs. Also, keep them informed of any changes or issues that may affect the project or service. For example, if your budget, timeline, or scope changes, let them know as soon as possible and negotiate a new agreement if needed.
Have continuous communication with vendor. This must be a two-way conversation as many times vendor delivery quality is impacted due to delays or ambiguity from customer end. Prompt vendors to have value based reporting rather than just status reporting.
The fourth step is to build trust and rapport with your vendor. Treat them as a partner, not an adversary. Show them respect, appreciation, and recognition for their work. Listen to their ideas, suggestions, and concerns. Be honest, transparent, and fair with them. Avoid micromanaging, blaming, or criticizing them unnecessarily. By building a positive and collaborative relationship with your vendor, you can increase their motivation, loyalty, and commitment to meet your needs.
You have engaged vendor because you do not have the skill set or strategy to work internally. This means vendor has the knowledge and customer must listen and accept vendor recommendations as long as it meets value and cost requirements.
The fifth step is to review and evaluate the vendor's work at the end of the project or service. Compare the results with the goals and expectations you set at the beginning. Identify what went well and what could be improved. Share your feedback and insights with your vendor. Thank them for their work and celebrate the achievements. If you are satisfied with their work, you can also provide them with a testimonial, referral, or repeat business.
The final step is to learn and improve from your vendor negotiation experience. Reflect on what you did well and what you could do better next time. What did you learn about your vendor, your needs, and your negotiation skills? How can you apply these lessons to future vendor negotiations? Keep a record of your vendor negotiation outcomes and use them as a reference or a benchmark for future projects or services.
A vendor is in a relationship with customer to do business and make profits. If customer show the intend to stick with the same vendor for long term or show opportunities for further business, it is always seen that response from vendor is better and quality of their delivery improves a lot because they will deploy their best resources to deliver your work in expectation of further income opportunities.