Introduction:
Negotiating with procurement to secure client work can be a challenging task for agency leaders. Several factors can contribute to their failure in these negotiations. Here are five possible reasons:
1. Misalignment of objectives:
Agency leaders may fail in negotiations with procurement when their objectives and priorities are not aligned. Procurement teams often focus on cost savings and efficiency, while agency leaders may prioritise delivering high-quality creative work and maintaining profit margins. This misalignment can lead to conflicts and unsuccessful negotiations.
2. Lack of understanding of procurement processes: Agency leaders who are unfamiliar with procurement processes and terminology may struggle to navigate negotiations effectively. Procurement often follows strict protocols, and not understanding these can result in misunderstandings, delays, and ultimately, negotiation failures.
3. Inadequate preparation:
Preparation is key to successful negotiations. Agency leaders who do not thoroughly prepare by researching the client’s needs, understanding the competitive landscape, and anticipating objections may find themselves unprepared to address procurement concerns effectively. This lack of preparation can lead to missed opportunities and unsuccessful negotiations.
4. Failure to demonstrate value:
Agencies must demonstrate the value they bring to the client beyond just cost. Agency leaders may fail in negotiations if they cannot effectively communicate how their services will benefit the client, solve their problems, or contribute to their goals. Procurement teams may prioritise cost savings, but they also need to see the broader value proposition.
5. Inflexibility and becoming emotionally invested:
Agency leaders who are inflexible in their negotiations and become emotionally invested may struggle to secure client work through procurement. Negotiations often require compromise, and an unwillingness to adapt to the client’s needs or make concessions can lead to deadlock and lost opportunities. Flexibility and a willingness to find mutually beneficial solutions are crucial in these negotiations.
Successful negotiations with procurement often require a deep understanding of the client’s needs, effective communication skills, flexibility, and the ability to align agency objectives with procurement’s priorities. Failure to address these factors can result in unsuccessful negotiations and a loss of potential client work.
To address the failings in negotiations with procurement and improve the chances of securing client work, agency leaders can implement the following five solutions:
1. Develop a strong value proposition:
Craft a compelling value proposition that clearly demonstrates how your agency can benefit the client beyond cost considerations. Highlight your unique strengths, expertise, and track record in delivering results. Show how your services align with the client’s strategic goals and how they can help solve their specific challenges.
2. Educate and collaborate with procurement:
Take the time to educate procurement teams about the nuances of your industry and the value of creative services. Foster a collaborative relationship with procurement professionals by offering insights and information that can help them make informed decisions. Encourage open communication and a mutual understanding of each other’s objectives.
3. Customise your approach:
Tailor your negotiation approach to each client and their specific needs. Avoid using a one-size-fits-all strategy. Conduct thorough research on the client, their industry, and their competitors to understand their pain points and priorities. Use this information to customise your proposals and solutions to align with the client’s unique requirements.
4. Build relationships:
Invest in building strong relationships with key stakeholders, both within the client’s organisation and within procurement. Developing trust and rapport can make negotiations smoother and more productive. Engage in networking events, workshops, or industry conferences to establish connections that can positively influence the negotiation process. Pick up the ‘phone – it’s hard to build rapport via email alone!
5. Offer flexible solutions:
Be open to flexible pricing models, payment terms, and service delivery options that can accommodate the client’s and procurement’s preferences. Demonstrate a willingness to work within their constraints while still maintaining your agency’s profitability. Flexibility can be a significant asset in negotiations and can help overcome objections.
Conclusion
By implementing these solutions, agency leaders can enhance their negotiation skills, improve their relationships with procurement professionals, and increase their chances of successfully securing client work while addressing the previously mentioned failings.