By Alice Alessandri Some time ago we dedicated an article to win-win situations, currently a buzzword when talking about negotiations, whether in political or economic scenarios (industrial disputes, union agreements...) or in the routine situations we deal with every day (closing a sale with a client, choosing a holiday destination, etc.). Yet when we look…
We often talk about ethical buying to refer to choosing items that are sustainable and produced without harming the environment and communities. Actually, a customer’s choices can influence the market not only in terms of “sustainable production” but also in relationship styles, contributing to make negotiations more ethical. Many sellers argue that our ethics courses should also address customers because, they believe, it is the poor behaviour of customers that forces salespeople to act incorrectly as a matter of self-defence. We dedicate this article to “customers” to encourage them to promote ethical buying, as this has a considerable impact on relationships.
Suppliers and Partners
Poor customer behavior can be linked to the idea that purchasers have “the upper hand”. Let’s face it, if you are the one paying you can try to exploit your purchasing power. But are we really sure that it’s always worth pushing home this advantage? Even the most ruthless buyers, in fact, must strive to preserve a good relationship with their suppliers, especially if these are true partners who are party to creating the differential value of an offer.
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Just as companies rank customers not only on the basis of how much they buy, but also on the basis of their purchasing potential, so those buying should classify their suppliers according to the degree to which they participate in value-building.
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It may be useful to dedicate yourself to customer profiling, using specific purchasing indicators: the possibility and advisability of replacing the supplier, the level to which this supplier is an integral part of your production chain, their ability to express added value for you and for your customers, as well as the existence of possible purchasing alternatives and so on.
Marketing Mix of Purchases
We all know the Marketing Mix: product, price, place and promotion. To build an effective market strategy you need to look at all of these elements, but what should you consider to render your negotiations with suppliers more profitable? The ingredients of the Ethical Buying Mix can be extracted from the theory of Fisher, Ury and Patton (creators of the Harvard Negotiation Program): people, interests, options and standards (objective criteria). Let’s briefly analyze this:
- People: It is necessary to value our interlocutors as human beings. The goals that we have when bargaining may diverge from those of the other party and this could lead to a certain level of tension in the negotiation, but remember to separate people from problems
- Interests: these are the objectives that each party has during the bargaining. They have to be carefully analyzed and ranked according to importance; additionally, we need to define what goal is hidden behind a certain position. Sometimes the means are confused with the solutions. For example, some buyers may ask the supplier for an exaggerated discount to show off to the boss, forgetting that by doing so they risk losing a reliable supplier and so harming their organization
- Options: these are the alternative solutions that we will find if we use our creativity and maintain our focus on the shared objectives in the negotiation. Do not hold out for a unique solution, rather be flexible about how to reach an agreement.
- Standards (objective criteria): When defending a choice, use an objective criterion. Many negotiations are wrecked because they are based on opinions, not data. For example, take the case of those customers who insist “I think you could do more for me” instead of quantifying what they expect and thus trigger a negative reaction from the supplier. Use numbers, statistics, and anything that can help you to make your requests concrete and objective.
Positional or Principled Negotiation
There is a fundamental difference between a positional negotiation in which the two interlocutors defend opposing views to the end, and a principled negotiation based on the search for a common objective, an approach in line with ethical buying. The first case is an example of the so-called “zero-sum game” where one party wins and one party loses: the only way to make an exchange is to seek a compromise. As we discussed in the article on Win-Win situations, a compromise does not produce a result that will last over time. But how does one pursue an ethical buying strategy? The basic rules are summarized below.
1. Consider the interlocutor as part of the solution; without the other party there would be no agreement
2. Include ‘maintaining your relationship over time’ as one of your objectives in the negotiation
3. Use the law of reciprocity by being the first to offer trust and openness, in the certainty of receiving them in return
4. Do not attack the people but the problems
5. Try to recognize the objectives behind the positions, explain in detail the motivations that support your stated needs
6. Be creative and invent as many alternative solutions as possible
7. Basis your request on objective criteria
8. Leave bias and pride out of the negotiation and accept diversity as a value
9. Analyze the strategic value of the supplier before starting the negotiation
10. Be flexible about solutions but focus on the results
Whether you have decided to adopt a style of ethical buying or not, remember that your suppliers are part of a system of shared value building of which you are part. The benefits of maintaining a good relationship with them will also reflect on your relationship with your customers.
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With ethical buying you will increase the efficiency and satisfaction level of your business with hugely positive effects on the results.
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