FEATURE | COMMITTEE NEGOTIATING
TAKING THEM
I
STEVE HOYLE considers the challenge of selling to buyers who have joined forces to get a better deal
was recently asked to help prepare for a major negotiation involving a committee of customers. Although I’ve been involved in a number of these throughout my career, I have never formulated a clear set of strategies, and some quick research reveals that, while there is a huge amount of advice available for negotiating generally, very little thought has been put into the differences required in negotiating with a committee. The observations that follow come from several long conversations with successful salespeople who have experience in dealing with this situation. First a definition: what do we mean by committee negotiating? The original request from my client is typical in that a group of independent customers had banded together in order to get a better deal. Sometimes the customers may be truly independent but willing to cooperate as a buying club; probably more often they are autonomous units within a larger organisation, where they can all make their own decisions, but there are some organisation-wide groups that can make cooperating much easier. A typical committee negotiation comes about following a sales campaign that has normally been conducted with each separate organisation, which
deal agreed upfront, there were still at least some further individual discussions with some parties who wanted changes to suit their own particular circumstances. It also became very evident that in many ways the secrets of success for sellers in a committee negotiation closely matched those for a more normal one-to-one negotiation. Any sales professional going into a group negotiation would do well to remind themselves of the basics, as follows. THE FOUR STRANDS OF NEGOTIATING Strand 1: Deal set up Before getting to the end game, expectations have been set,
“Any sales professional going into a group negotiation would do well to remind themselves of the basics”
FEDERAT ED O RGANIS AT IO NS l Federated organisations present a particularly difficult negotiation challenge, as they typically involve central/group/head office participants, which can be functional (eg. group IT or group HR), as well as group procurement, together with seemingly independent operating companies, which might in turn have their own business, functional and procurement specialists.
l Achieving a deal in these situations is almost then come together with the different bodies all impossible and discussions will invariably lead to more or less inclined to do business with a further localised negotiations taking place. The best particular vendor. They then want to join forces outcome is often not to strive for too detailed a for the “end game”, to reach the best possible deal result, but rather to establish more of a frameworkfor everyone. type agreement, which allows for further flexibility. The first thing that became apparent when l The most successful salespeople reported looking at where committee negotiation that in practice they used the principles of has taken place is that in probably committee negotiation, but always found about half the cases the process was it difficult with complex federated not really a committee negotiation, organisations. The challenges included gaining clarity about the interests and but more often trying to get some THE AVERAGE NUMBER positions of the different players, concessions from suppliers before OF PEOPLE INVOLVED IN figuring out who actually held the individual negotiations followed. In MOST BUYING DECISIONS power (“follow the money” is often a fact, in the vast majority of cases, (FIRMS WITH 100-500 useful starting point) and establishing EMPLOYEES) even where there was an overall
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Source: Gartner Group
24 WINNING EDGE
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the boundaries of the negotiation.
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19/01/2016 16:21
