cips presentation: transforming your negotiating success by mike inman, tableforce
TRANSCRIPT
Transforming Your Nego0a0ng Success!
In associa0on with:
© TableForce 2012
By:
All too o&en buyers trap THEMSELVES into PRICE FOCUSED nego2a2ons, which actually end up being a FOOL’S ERRAND in maximizing value. Total cost nego2a2ons that produce a healthy short and long term win-‐win, both INTERNALLY and with the
SUPPLY CHAIN require a more sophis2cated mindset
– not necessarily more DIFFICULT, just more THOUGHTFUL…
Transforming Your Nego0a0ng Success!
In associa0on with:
© TableForce 2012
By:
© TableForce 2012
Mike Inman Partner with TableForce
Formerly a head of global procurement for MGM Resorts Interna2onal and IAC/InterAc2veCorp
Transforming Your Nego0a0ng Success!
Transforming Your Nego0a0ng Success!
In associa0on with:
© TableForce 2012
By:
Before anything, please…
turn off the voice inside your head intuiEve counter
Transforming Your Nego0a0ng Success!
In associa0on with:
© TableForce 2012
By:
45 minutes = 2 opportuni0es Clients
Cost vs. Price
Transforming Your Nego0a0ng Success!
In associa0on with:
© TableForce 2012
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Clients Their “sheet of paper”
Transforming Your Nego0a0ng Success!
In associa0on with:
© TableForce 2012
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Communicate Communicate Communicate 1. Seek to understand their vision and goals -‐ and learn THEIR language
-‐ Lean 6-‐Sigma operator vs. “entrepreneurs” 2. Translate YOUR vision and goals into THEIR language
-‐ Mimic 3. Speak WITH them in their language regarding how the relevant points of your vision and goals relate to suppor2ng them in achieving theirs…
-‐ Different approaches: -‐ Finance = reduce COST … -‐ Marke2ng = get as much VALUE as possible from the FULL budget
Transforming Your Nego0a0ng Success!
In associa0on with:
© TableForce 2012
By:
# of large hospitality customers in Las Vegas 1.0 1.0 1.0 5.0 5.0 3.0 3.0# of technicians certified on product in Las Vegas 2.0 2.0 4.0 4.0 8.0 4.0 8.0Local field service management team 3.0 3.0 9.0 3.0 9.0 2.0 6.0Local service inventory quality and availability 4.0 4.0 16.0 2.0 8.0 3.0 12.0After hours support structure 5.0 5.0 25.0 1.0 5.0 4.0 20.0Customer service support structure 1.0 1.0 1.0 5.0 5.0 2.0 2.0Price per port 2.0 2.0 4.0 4.0 8.0 3.0 6.0Price per technician 3.0 3.0 9.0 3.0 9.0 4.0 12.0Vendor training 4.0 4.0 16.0 2.0 8.0 2.0 8.0Vendor manufacturer support 5.0 5.0 25.0 1.0 5.0 3.0 15.0System alarming (NOC) services 1.0 1.0 1.0 5.0 5.0 4.0 4.0Core business hours 2.0 2.0 4.0 4.0 8.0 2.0 4.0Discount on product (hardware and software) 3.0 3.0 9.0 3.0 9.0 3.0 9.0Time and Material 3.0 3.0 9.0 4.0 12.0 4.0 12.0
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1. # of large hospitality customers in Las Vegas
2. # of technicians certified on product in Las Vegas
3. Local field service management team
4. Local service inventory quality and availability
5. After hours support structure
6. Customer service support structure10. Vendor manufacturer support
11. System alarming (NOC) services
12. Core business hours
13. Discount on product (hardware and software)
14. Time and Material
PBX Maintenance Options
A B
Transforming Your Nego0a0ng Success!
In associa0on with:
© TableForce 2012
By:
Transforming Your Nego0a0ng Success!
In associa0on with:
© TableForce 2012
By:
Own the communica2on plan with suppliers 1. CONTINUE to speak your internal customers language 2. Take 80% of the “burden” off of your internal customer
-‐ be INTENTIONAL 3. How and when we communicate is a cri2cal SIGNAL to suppliers
-‐ The suppliers “voice” says: “why are they talking to me”
Did I men0on communicate?
Transforming Your Nego0a0ng Success!
In associa0on with:
© TableForce 2012
By:
Group hugs all around Give ALL the credit to your client
Men2on strategic “wins” and value FIRST Cost savings LAST -‐ IF AT ALL
From: Inman, Mike To: C-‐Team Subject: Re: Agency of Record results To respond to your ini2al request, before looking at the fees (and I assume you’re also looking for the associated reduc2on) I think we were able to: 1) get a fantas2c agency (supported by more objec2ve criteria than just “they’re very crea2ve” – aaached is the final evalua2on) 2) improve the service offering (adding strategic planning and web) 3) increase the amount of work we expect the agency to perform (both strategic and tac2cal) 4) reduce the risk contractually (as they are new and hungry, we were able to get very favorable terms to reduce our risk of going with them, something that would have been more difficulty with the incumbent agencies)
and lastly, reduce costs…
Transforming Your Nego0a0ng Success!
In associa0on with:
© TableForce 2012
By:
Cost vs. Price Tradi0onal thinking Price = Cost + Profit
Transforming Your Nego0a0ng Success!
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© TableForce 2012
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Material
Labor
SG&A
Overhead
Waste Profit
Price
Transforming Your Nego0a0ng Success!
In associa0on with:
© TableForce 2012
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Think about how LITTLE most sellers are truly allowed to nego2ate
Transforming Your Nego0a0ng Success!
In associa0on with:
© TableForce 2012
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Price = Cost + Profit Change the equa0on! Price Cost Profit -‐ =
Transforming Your Nego0a0ng Success!
In associa0on with:
© TableForce 2012
By:
Material
Labor
SG&A
Overhead
Waste Profit
Price Cost
Transforming Your Nego0a0ng Success!
In associa0on with:
© TableForce 2012
By:
Start by understanding that you as the buyer drive cost: specifica2ons requirements demands designs
Transforming Your Nego0a0ng Success!
In associa0on with:
© TableForce 2012
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Priced based example: Spend = £1M / year Profit = 5% (£50,000) Maximum nego2ated value?
Transforming Your Nego0a0ng Success!
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© TableForce 2012
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Cost based example: 10 delivery loca2ons, 7 days / week, 52 weeks / year Average truck wait 2me = 2.5 hours at each loca2on Driver cost = £25/hour, truck cost = £10/hour Total delivery cost = £875 / day or £319,375 / year
Transforming Your Nego0a0ng Success!
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© TableForce 2012
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WHAT IF… We moved the inspec2on point to the suppliers dock? Gave a “line pass” and reduced wait 2me to 10 min max? Changed delivery to 3x per week New delivery cost = £70 / day or £10,920 / year!
Transforming Your Nego0a0ng Success!
In associa0on with:
© TableForce 2012
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Price based scenario: £50,000 max = 5%
an UNHAPPY supplier and client, EVENTUALLY …
Cost based scenario: £319,375 -‐ £10,920 = £308,455 = 30+%
a happy supplier, client, and FINANCE and BOSS
Transforming Your Nego0a0ng Success!
In associa0on with:
© TableForce 2012
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Where do these ideas come from? Trusted suppliers
Teammates looking beyond price
Transforming Your Nego0a0ng Success!
In associa0on with:
© TableForce 2012
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In closing TAKE RISKS
Be willing to TRY
Transforming Your Nego0a0ng Success!
In associa0on with:
© TableForce 2012
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Thank you! Ques0ons?