As a strategic sourcing software company, it is typically assumed that the buying community is our only customer. However, we believe all the stakeholders in a negotiation need to be included in order to ensure a successful outcome.
At Scanmarket, we have the privilege of interacting with suppliers/bidders every day. Whether it is managing events, conducting market surveys, or conducting training, we get to speak with suppliers in every industry worldwide through our unique QuickCall support functionality. Through these conversations, we frequently hear that suppliers:
- Are keen to participate in eSourcing events
- Want to compete fairly
- Would prefer to cooperate rather than be adversarial
- Understand the buying organizations are looking for savings and/or best overall value
- Above all, they want to win business
One of the key tenets of negotiation theory is “know your counterpart." To that end, when designing and conducting your esourcing events, keep in mind these seven things that your suppliers/bidders want to know:
- Don't complicate the tendering process with complex systems. Suppliers want to spend their time impressing buyers by creating their best possible responses to your questions and submitting their most competitive bids to win your business. They do not want to waste time trying to figure out how to navigate complex eSourcing systems. Clunky software can ultimately reduce participation levels and erode the competition buyers are working so hard to increase. So be sure to invest in a user friendly system (like Scanmarket 😉), and communicate that to your suppliers.
- Don’t leave me hanging. Suppliers sometimes require technical support during the busy day. In the process of completing a tender response, a supplier should not spend time on hold, drafting emails, or awaiting responses. Technical support must be quick and readily available with as little disturbance as possible. Our customers suppliers love the QuickCall support service because they typically receive a call from our team within one minute.
- Let me know about the competition so I can highlight my strengths. Sharing information about the market can build goodwill even when the bidders already know what you're sharing. Depending on your negotiation strategy, you may choose to conduct an open conference call with all bidders to discuss specifications or company goals. It’s also possible to use the many system feedback settings (e.g. rank-based bidding) to communicate to bidders their position relative to the competition. This will not suit every situation, so weigh your options carefully and enlist an expert when needed. Better still let suppliers know that you are taking their strengths into consideration and build all price and none-price factors into the sourcing event, penalizing poor elements and rewarding strong elements of suppliers’ offerings. This way suppliers know that the best overall value offering will win the business, not just the lowest priced.
- Give me a very specific target to get a better bid. During the bidding process, the vast majority of interactions with suppliers are about specifications. Suppliers want to make sure they provide what you need at a margin that works for them. To be able to do this, they need to understand exactly what you want and need. While this requires more preparation prior to an event, it will be in your long term interest to build very clear specifications. Without a clear target, bidders have to build in padding to account for unforeseen requirements. This could result in inflated bids from suppliers and lower savings for you.
- Tell me how you will make your decision so I can focus my efforts. When it comes to communicating your decision criteria, there is a very fine line between disclosing too much and too little. Determining how much of your decision criteria to disclose is one of the most important choices you will make. Acknowledge when you will be using non-price evaluation factors and what those are, and provide the same information to all participants. Solicit alternative proposals when appropriate. Don't communicate a specific savings target or provide specific factor calculations for things like incumbency or quality. Also, don't accept alternative proposals when you’re looking for a specific quote.
- Let me know if you want creative solutions or just a quote. Not all categories or bids are created equal. Sometimes,you try to solve a complex business problem, and other times you’re simply looking to fulfill a need. Suppliers are usually happy to provide complex creative proposals. This gives suppliers an opportunity to deliver a differentiated bid that highlights their strengths relative to other bidders. However, if you are just looking for a quote, don’t waste their time. Be upfront with your bidders on what exactly you’re looking for. They will reward you by making your life easier when it comes to evaluation.
- Be honest with me, and I’ll be honest with you. Make no mistake, at the end of the day this is still a negotiation. Suppliers want to know that you are conducting an open and fair competition. Suppliers are often under the impression that sourcing events are just a fishing expeditions and that the buyer has no intention of switching suppliers. You set the rules, so you must ensure a level playing field. For eRFx or eAuction events, never invite a bidder you’re not willing to do business with. If you conduct too many events where you’re not willing to switch, suppliers will stop participating.
By understanding what your bidders want and need, you will build more successful events that will generate value for you and keep bidders coming back. For more information on these approaches or to learn more about how Scanmarket can help you achieve your business objectives, please visit us at www.scanmarket.com.