In the last week I have had several procurement people (I can’t say they are professionals as referred to by their Institute) try and negotiate fees using the 3 most common lies in their industry.
Don’t get me wrong, I am a champion of negotiation. I just don’t rely on little white lies.
All three are from large multinational companies and all three spun their lie like they believed it. Which is sad and not very professional.
Here they are:
1. I / we don’t have the money / budget.
I’m sorry, does the CEO and CFO of your company know you have no money? Do the shareholders know that this big multinational company who reported a pre-tax profit of many billions of dollars now has no money? It is ridiculous to say this, so don’t.
Sure, you may not have allocated a budget for this unseen cost, but that happens all the time in business and what you do is reallocate from another budget to cover it.
We are not talking about millions of dollars here. In most cases you are lying for a difference of thousands of dollars. Is your integrity really so cheap?
What you are really saying is that you don’t want to pay for fixing this problem and therefore you would rather a much smaller company, who’s total turnover is a thousand times less than your annual profit, subsidise your work for you. Right?
2. Think of it as investing in the relationship.
And what type of relationship is that? One where every time we do business you try to screw a lower fee? Or threaten to go to a competitor? I wonder if they manage their personal relationships the same way?
“Yes, would love to go out to dinner, but only if you pay and only if a better offer does not present itself between now and then”.
I had to bite my tongue when they said this on Thursday because I knew that in the past 3 years we had “invested” many times in this relationship and as yet have got no return as they are still dating our competitors. So I am sorry Procurement, I am not into a non-performaning investment or a polygamous relationship.
3. I have a lower quote I need you to match if you want the work.
This is the classic negotiating position. Not a good one, but a classic one.
The problem is that it is hard to justify when there has been no formal tender process and you are not comparing like-for-like and you are clearly just fishing around for leverage to get a lower price.
I am happy to give a little here and there, but when this becomes the Procurement person’s standard line it really just shows they have no concept of value.
On the basis of “pay peanuts, you get monkeys”, it means these procurement people are happy to work with monkeys. Well so be it.
I am, and more than happy to, leave them working in the zoo they have created.