Buyer Analytics

A team of researchers have come up with interesting answers in a report published in Psychological Science. They conducted a series of experiments with150 MBA students who had just enrolled on a ten-week course on negotiations. Analysis showed that when the buyer in particular had a perspective-taking ability it could predict a successful outcome.

Perspective-taking is the ability to consider the world from someone else's point of view, whereas empathy is the ability to connect with them emotionally. What this indicates is that taking the other person's perspective can produce a better overall outcome for both sides.

You want to understand what the other side's interests are, but you do not want to sacrifice your own interests, says Dr Galinksy. A large amount of empathy can actually impair the ability of people to reach a creative deal.

How do you become a better negotiator through perspective? Try to understand what the supplier is thinking and what his interest and purpose was in selling. Don't try to understand what the seller was feeling and what emotions he might be experiencing.

So don't emphasize with your suppliers, get inside their head, you'll be a better negotiator.

From Joel on Software - how to buy servers from Dell... negotiate, negotiate, negotiate.

Whenever we buy servers from Dell, even though they eventually offer us a price that beats the competition, we still have to spend a week or two negotiating, gathering competitive bids, etc. By the time we place our order the price we pay is about 20% to 30% less than the price advertised on the web, and we're still not sure if we could have paid less.

• Procurement acts as a gate keeper.
• Procurement can play a value added "bad cop" role.   End users don't like to be confrontational.
• An orderly impartial bidding process is appreciated
• Use procurement to enforce contract consistency.
• Forecast and plan your business needs

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