You have the customers or suppliers you deserve
It’s not what most people want to hear, but it’s true.
It’s amazing how often i’ve heard statements like ‘customer x is always like that – whenever we talk to them about a price increase they just reject it. They always beat us down from our opening position’. The truth is that companies do not treat all their suppliers in the same way. They know which ones they can be tougher with, and which ones will not let them get away with it.
The same is true for suppliers, of course. They know which customers will just ‘roll over’.
You may think this is determined by power (things like brand, size of organisation, circumstances, time pressures e.t.c.), but this is only part of the story.
What is far more influential is the ability to negotiate effectively. Do you truly understand their circumstances? What would happen if you said ‘no’? Would it mean the end of the business relationship? Or would it just lead to an uncomfortable negotiation? If it’s the latter then you are duty bound to engage in this type of negotiation (what would your shareholders say?). To do this, you need to truly understand their circumstances; their time pressures; your competitors’ activity.
If you always ‘open extreme’ in negotiations, with the intention of trading back so that they feel good about the process, then guess what’s going to happen next time you put a 7% price increase on the table. If you have the reputation for negotiating hard, but fair, then they may be less inclined to push back so hard. This is all part of the pre-conditioning which is essential to a successful negotiation.
Every negotiation (indeed, every interaction) you have with the other party leaves a legacy as to how you will behave next time.
You are training them how to interact with you. If you were to do an anonymous poll of how people find dealing with you (everyone you deal with), would the results disappoint you or please you? If not you personally, what about for your business?