December 19th, 2017

Deciding which feedback is valuable in the course of negotiations



Considering Feedback During Negotiations

Today’s post is by Dave Wenig, Vice President of Sales and Services at SafeSourcing.

Regular readers of the SafeSourcing Blog know that we have covered the topic of vendor feedback and its role in the overall negotiation before. The blog “The Negotiation Began Long Before the Quote. Or, Make a Plan and Stick with It” is one great example and is worth a quick read through.

That said, it is still worth covering again and is as relevant as ever. In the past week alone, I’ve encountered at least three instances of how supplier feedback has had an impact on the negotiation process and has, possibly, affected the results of the e-Procurement events one way or another. I wanted to share these examples in an effort to provide some guidance about what type of feedback you might receive.

The first example is related to specifications where an incumbent supplier contacts the company hosting the e-Procurement event and points out that there are some details that they don’t think are properly represented. When the feedback reached our organization, the client asked whether or not these details were, in fact relevant and whether anything needed to be done. This is a great example of exactly how this type of supplier feedback should be treated.

Another example relates to pricing. It’s a very common practice to assign Max Quotes to each item in an RFQ. The Max Quote is the highest price that can be entered into the RFQ for that line item. Often, we will get feedback from vendors directly that the Max Quote is too low and that we need to increase it to allow for their quotes. Depending on how the Max Quote was determined and other factors affecting pricing, this might be valid feedback. On the other hand, I can point to two separate instances where this feedback was not accurate. In fact, in both cases, the results of the RFQs indicated that the Max Quotes were set at a reasonable amount. The evidence was the double digit savings in both RFQs.

The last example of vendor feedback that I’ll share here is a little more difficult to spot and is not something that I would consider to be common. This is feedback that is given to create fear, uncertainty, and doubt (FUD). FUD might be caused by a vendor before, during, or after an e-Procurement event. FUD might be caused by a laundry list of questions or concerns. This might be done to imply that the results of the e-Procurement event are suspect, or that this vendor is the only one who is truly qualified for the opportunity. Again, this can be tricky to identify, but is most often identified by a vendor who is alone in their concerns or who asks unique questions, sometimes circumventing the outlined communication policies to do so.

What is common among each of these examples is that all feedback should be considered. Some of it will be actionable. Some feedback will be determined to be of a lesser value. Another commonality is that your e-Procurement provider has probably seen all of this and has the experience to help you decide which is which.

For more information, please contact SafeSourcing.  We look forward to your comments.



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