How can I create value when my client is not at the negotiating table, and procurement insists only on lowering price?

Published July 9th, 2008 by Hal Movius

Representatives (“agents”) are sometimes rewarded on very narrow terms and objectives (most often price reductions, in the case of procurement).  Other times, they are new to the process and uninformed about the complex needs of stakeholders on their own side. In either case, it is productive to 1) try to elicit interests (both the client’s and the agent’s) either directly or indirectly; and 2) communicate with the agent’s stakeholders (or “back table”).  Such communication is sometimes effective in the form of a summary (you demanded X, we attempted to explore a range of other issues and options, you demanded X again, we provided multiple options that would give you X and you refused; where shall we go next?)  Often, when the back table learns of the poor form of their agent, the table can be “reset.”  Finally, it is always a good idea to try to provide multiple packages that include a lower price, with corresponding reductions in other areas (e.g. scope of work).  Giving choices to the other side makes them have to negotiate with one another about what they are prepared to sacrifice, rather than with you.