I've spent much of my career in the procurement field and I've heard a heck of a lot of bunkum about the power aspect of the location for negotiations. I hear it again and again from buyers that ‘home is best’, with the 'other side' supposedly feeling more intimidated when they have to negotiate on the buyer’s home turf. As a buyer, and then procurement leader, I almost always preferred negotiations to take place at the supplier's location. Of course, it wasn’t always comfortable, but it did give my colleagues and I a few key advantages:
- It signalled to the supplier we were confident and would not be intimidated by any price threats.
- We controlled the time. How many suppliers would tell a customer to leave?
- When we probed for the supplier’s interests and/or detailed information, the supplier wasn't able to say: "I'll have to get back to you because we don't have the information with us." We could say: "Go find it, please. Take your time. We'll wait."
- Just the experience of being at the supplier's location gave us fresh insight and learning about the supplier's capabilities and their business as well as the knowledge to use there and then or bank for later.
What we were doing is mining the supplier’s territory for information on the supplier’s own interests and priorities. We could test any supplier assertions by viewing the data immediately. We were always more successful getting the facts when at the supplier's place, much to our advantage. I can't say this approach worked perfectly every time, but I would say in nine cases out of 10 it was the other party that felt the most intimidated, pressurised and obliged to come-up with an agreement.
- David Atkinson is founder and managing director of Four Pillars.