CIPS presentation: Transforming Your Negotiating Success by Mike Inman, TableForce

Transforming Your Nego0a0ng Success!

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All too o&en buyers trap THEMSELVES into PRICE FOCUSED nego2a2ons, which actually end up being a FOOL’S ERRAND in maximizing value. Total cost nego2a2ons that produce a healthy short and long term win-‐win, both INTERNALLY and with the

SUPPLY CHAIN require a more sophis2cated mindset

– not necessarily more DIFFICULT, just more THOUGHTFUL…


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Mike Inman Partner with TableForce

Formerly a head of global procurement for MGM Resorts Interna2onal and IAC/InterAc2veCorp



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Before anything, please…

turn off the voice inside your head intuiEve counter


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45 minutes = 2 opportuni0es Clients

Cost vs. Price


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Clients Their “sheet of paper”


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Communicate Communicate Communicate 1.  Seek to understand their vision and goals -‐ and learn THEIR language

-‐ Lean 6-‐Sigma operator vs. “entrepreneurs” 2.  Translate YOUR vision and goals into THEIR language

-‐ Mimic 3.  Speak WITH them in their language regarding how the relevant points of your vision and goals relate to suppor2ng them in achieving theirs…

-‐ Different approaches: -‐ Finance = reduce COST … -‐ Marke2ng = get as much VALUE as possible from the FULL budget


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# of large hospitality customers in Las Vegas 1.0 1.0 1.0 5.0 5.0 3.0 3.0# of technicians certified on product in Las Vegas 2.0 2.0 4.0 4.0 8.0 4.0 8.0Local field service management team 3.0 3.0 9.0 3.0 9.0 2.0 6.0Local service inventory quality and availability 4.0 4.0 16.0 2.0 8.0 3.0 12.0After hours support structure 5.0 5.0 25.0 1.0 5.0 4.0 20.0Customer service support structure 1.0 1.0 1.0 5.0 5.0 2.0 2.0Price per port 2.0 2.0 4.0 4.0 8.0 3.0 6.0Price per technician 3.0 3.0 9.0 3.0 9.0 4.0 12.0Vendor training 4.0 4.0 16.0 2.0 8.0 2.0 8.0Vendor manufacturer support 5.0 5.0 25.0 1.0 5.0 3.0 15.0System alarming (NOC) services 1.0 1.0 1.0 5.0 5.0 4.0 4.0Core business hours 2.0 2.0 4.0 4.0 8.0 2.0 4.0Discount on product (hardware and software) 3.0 3.0 9.0 3.0 9.0 3.0 9.0Time and Material 3.0 3.0 9.0 4.0 12.0 4.0 12.0

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5

10

15

20

25

1. # of large hospitality customers in Las Vegas

2. # of technicians certified on product in Las Vegas

3. Local field service management team

4. Local service inventory quality and availability

5. After hours support structure

6. Customer service support structure10. Vendor manufacturer support

11. System alarming (NOC) services

12. Core business hours

13. Discount on product (hardware and software)

14. Time and Material

PBX Maintenance Options

A B


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Own the communica2on plan with suppliers 1.  CONTINUE to speak your internal customers language 2.  Take 80% of the “burden” off of your internal customer

-‐ be INTENTIONAL 3.  How and when we communicate is a cri2cal SIGNAL to suppliers

-‐ The suppliers “voice” says: “why are they talking to me”

Did I men0on communicate?


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Group hugs all around Give ALL the credit to your client

Men2on strategic “wins” and value FIRST Cost savings LAST -‐ IF AT ALL

From: Inman, Mike To: C-‐Team Subject: Re: Agency of Record results To respond to your ini2al request, before looking at the fees (and I assume you’re also looking for the associated reduc2on) I think we were able to: 1) get a fantas2c agency (supported by more objec2ve criteria than just “they’re very crea2ve” – aaached is the final evalua2on) 2) improve the service offering (adding strategic planning and web) 3) increase the amount of work we expect the agency to perform (both strategic and tac2cal) 4) reduce the risk contractually (as they are new and hungry, we were able to get very favorable terms to reduce our risk of going with them, something that would have been more difficulty with the incumbent agencies)

and lastly, reduce costs…


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Cost vs. Price Tradi0onal thinking Price = Cost + Profit


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Material

Labor

SG&A

Overhead

Waste Profit

Price


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Think about how LITTLE most sellers are truly allowed to nego2ate


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Price = Cost + Profit Change the equa0on! Price Cost Profit -‐ =


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Material

Labor

SG&A

Overhead

Waste Profit

Price Cost


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Start by understanding that you as the buyer drive cost: specifica2ons requirements demands designs


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Priced based example: Spend = £1M / year Profit = 5% (£50,000) Maximum nego2ated value?


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Cost based example: 10 delivery loca2ons, 7 days / week, 52 weeks / year Average truck wait 2me = 2.5 hours at each loca2on Driver cost = £25/hour, truck cost = £10/hour Total delivery cost = £875 / day or £319,375 / year


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WHAT IF… We moved the inspec2on point to the suppliers dock? Gave a “line pass” and reduced wait 2me to 10 min max? Changed delivery to 3x per week New delivery cost = £70 / day or £10,920 / year!


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Price based scenario: £50,000 max = 5%

an UNHAPPY supplier and client, EVENTUALLY …

Cost based scenario: £319,375 -‐ £10,920 = £308,455 = 30+%

a happy supplier, client, and FINANCE and BOSS


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Where do these ideas come from? Trusted suppliers

Teammates looking beyond price


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In closing TAKE RISKS

Be willing to TRY


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Thank you! Ques0ons?

[email protected]

Education

CIPS presentation: Transforming Your Negotiating Success by Mike Inman, TableForce