How to negotiate with a supplier. How to negotiate with a distribution network for deliveries

Negotiations are an essential part of any business partnership. Further work with a client or supplier largely depends on the quality of the negotiations, and it is at this stage that the main conditions for cooperation are determined.

From a psychological point of view, each of us is a unique individual. We have our own life position, views and preferences. The same applies to a person as a counterparty in the transaction process. The director, manager, financier and other officials represent a specific firm that needs specific conditions. A private client, in turn, is interested in a certain product, in a certain quantity. The people with whom you will negotiate need specifics - this is important. But along with it, there are standard methods of negotiating. They can be considered as a template, in the good sense of the word. These rules are formed on the basis of factors such as business ethics and psychoanalysis, so their effectiveness is hardly worth questioning.

So, the rules for successful negotiations include the following points:

1. Training. You must clearly understand the purpose of the negotiations even before they begin directly. Ideally, break this goal into three points: the planned result, acceptable and undesirable. For each of them, it is necessary to have their own strategy of behavior, which is launched even before the result is achieved. Let's say you see that the conversation is going in the wrong direction, and you cannot come to a common denominator with the interlocutor. Use the techniques that will give you the opportunity to get out of the situation.
2. Performance. At the beginning of the conversation, let the partner clearly understand who you are, what company you are acting for, and for what purpose you invited him to this conversation. This will help avoid many questions in the future. An informal digression makes sense if you really know how to communicate on abstract topics. If the conversation “about the weather” is done in so far as, insincerely, it will only be harmful, because. will be a waste of time. Which many business people simply do not have enough. Better to get straight to the point.
3. Understanding. Of course, in the process of negotiations, you must defend, first of all, your interests. But it will not be superfluous to look at the conversation from the side of the interlocutor. This will help you better understand what advantages of your proposal you can highlight for him. Know how to listen and hear someone else's position.
4. Entourage and appearance (for "live" negotiations). Make sure that the negotiations take place in a suitable place, where no one will disturb you. If this is an office, its furnishings should be business friendly. Close the door (but don't lock it) and make sure no one disturbs you. If this is a cafe, try to find a cozy place. Do not invite persons whose presence is not required to participate in negotiations. Control the time of negotiations, do not drag them out, but also do not look at your watch every 5 minutes, this is a sign of bad taste and your lack of interest in the deal. As for the appearance - it should be accurate. You are holding a business meeting and you need to look the part.

In fairness, it is worth noting that on this point everything is purely individual. Often, when promoting their product or service, people create such an appearance for themselves that their interlocutor at first cannot understand who he is talking to at all. This makes it possible to play first fiddle in terms of business communication, while the other side takes the time to study you as a person. But here on thin. It is important not to overdo it, because. excessive expressiveness in style can also give a completely opposite result - a person will not initially see you as a serious partner.

1. positive nature of the conversation. Both you and your interlocutor are interested in mutually beneficial cooperation. It's good, isn't it? Show your positive attitude. But not with the help of a “duty” smile or sycophancy, but in such a way that the emotions are sincere. Talk about the prospects for cooperation with feeling, with a gleam in your eyes. If you do not pretend, it will be very easy to maintain such a tone. But at the same time, keep your distance. Perhaps in the future you and the interlocutor will become best friends, but at the moment you are representatives of different business parties, each of which defends its own interests.
2. Unambiguity. If we are talking about a financial partnership, the terms of payment for goods, etc. moments, it is necessary that all of them be clearly specified, and then spelled out in the contract and not subject to double interpretation. Signing a document, of course, is not worth it right away. Why - see the note above this paragraph.
3. The main thing is the details. Didn’t understand what this or that phrase from the lips of a partner meant? Feel free to ask him a clarifying question. Doubts, uncertainty, etc. Feelings must either be confirmed or dispelled. Clarifying questions in this case are the best way.
4. Keep a balance. Between the good and the bad cop. Another important factor is how to negotiate cooperation. Here, as in battle, it is not the one who attacks who is strong, but the one who holds the blow. It is necessary to defend your positions not at the expense of refusals, disputes and other negative things. It is important to demonstrate professionalism. And then the partner will be more loyal to the conditions you offer.
5. Keep your word. Since we are checking a partner for honesty and decency, we can be sure that he will do the same. Promise only what you can guarantee. Keep promises. More precisely, not even promises, but obligations under a future contract. Otherwise, not only moral, but also administrative (and sometimes criminal) liability will await you. Plus, it's your reputation. Don't let her get hurt.
6. A good end to a conversation. After negotiations, the parties must come to a joint conclusion. This may be a compromise, a preliminary agreement, sometimes a categorical disagreement of the parties with each other. But the negotiations cannot be left unfinished. Even if they were just one of the stages, after which you will have other meetings, conversations or correspondence. Treat them like you read a chapter from which you need to draw a conclusion. And, of course, keep basic courtesy. Shake a man's hand (if it's a man), smile at the lady, wish a good day. Do this regardless of the outcome of the conversation.

IMPORTANT! The result of the negotiations does not mean the decision made. The verdict on cooperation should be accepted only after thinking it over in a calm atmosphere, having discussed with your colleagues everything that you talked about during the negotiations. Especially if the interlocutor offered you options for cooperation that you had not thought about before. You need to carefully analyze this proposal, to understand whether the sounded conditions suit you. Might be worth looking for pitfalls. To make it easier to understand, keep notes during the negotiations. If you agree to a deal during the conversation itself, you can become a victim of a person with a strong charisma, due to which you will be confused.

How to negotiate with a client?

The above recommendations applied to negotiations in general. Now let's look at a few points about what line to take when communicating with the person you want to sell something to. It does not matter if it is a wholesale buyer or a retail client. For us, he is first and foremost a customer.

1. Find out what the client needs. What product, in what volume, for what purposes (remember the specifics). After receiving this information, let the person know that you can implement their requests.
2. Describe the benefits of the product. Preferably with numbers. How many components are richer in its composition, how many times this tool will save money, etc. This will allow you to justify the price you want to receive for the product.

IMPORTANT! You must understand all the benefits, first of all, yourself. Only then can you justify them and convey them to the buyer.

1. If the price does not suit the client, do not complain that such cost is due to the costs of production, logistics and other items of expenditure. The buyer is not interested. It is better to emphasize once again what benefits he receives from the acquisition. Preferably financial. If there really are any, the person will gladly pay you a one-time fee in order to save money in the future. In some cases, you can offer discounts and special conditions. Which ones - calculate in advance, as well as the size of the discounts.

Benefits may include:

• free shipping when buying a certain amount;
• the possibility of purchasing goods in installments;
• additional bonuses (3 products for the price of 2, etc.).

There are a lot of options, the main thing is that they are economically viable for you. If a buyer asks for an unrealistic discount, don't be afraid to say no. At the same time, justify your refusal, say that such conditions are simply unprofitable for you. And offer an alternative.

ADVICE: Examples of successful negotiations demonstrate the relevance of comparisons when voicing prices. “This book costs as much as 10 cups of coffee”, “A monthly payment for a car is equal to three dinners at a restaurant”, etc.

The main thing - do not start the conversation with the cost. First, introduce the buyer to the product (or general assortment), list its advantages, and then politely but confidently announce the price. Confidence is an important point. If a client sees that you are hesitating, he will definitely start haggling. Say the number as confidently as you say your name. When bargaining, if it still takes place, use what is said at the beginning of this paragraph. But do not rush to make the discount itself if the client says "how expensive it is." Perhaps he is just waiting for you to list him again why the product costs exactly as much as you want for it.

1. Do not despair if the person canceled the purchase. Perhaps he just needs to wait until the salary or find out the conditions and prices of your competitors (especially true for wholesale customers). Leave your contacts and politely say that in which case you will always be happy to cooperate.

Difficult client - who is he?

Yes, there is such a separate category of buyers. Many do not like them, but these people help sellers understand the weaknesses of their business. They represent a challenge to be accepted and an obstacle to be overcome. At the same time, these clients themselves are divided into:

• rude people;

When dealing with such people, the main thing is not to succumb to provocations. Remain calm and confident. Rudeness means the absence of other arguments, and when a person realizes that shouting and accusations cannot penetrate you, he will back off himself. And all his negativity will remain with him. Or maybe it's just emotions that need not be prevented from splashing out. If a person is dissatisfied with the price, appearance product - agree with it, using speech turns like "Yes, you are certainly right, but let me clarify ...". And then, despite the emotions, try to help him.

• shy and indecisive people;

Such a person, as a rule, is not confident in himself and in his choice. He is haunted by doubts that you need to level. Maintain it, expand it, or vice versa, narrow down the list of options for purchase. Here it is doubly important to emphasize all the advantages of the product. If a person wants to consult with his wife or superiors, offer your help in this matter.

• "wise men"

The client wants to demonstrate that he knows your product better than you do. Well, in this case, you can play his game. Show how you admire his competence, do not use harsh objections if he criticizes the product, but only offer alternative arguments. The main thing here is to find a compromise. A healthy discussion always benefits both sides.

How to negotiate over the phone?

To begin with, let's clarify - any serious transaction requires a personal meeting. Successful telephone conversations are just one of the stages of cooperation. But this stage is also very important. Let's talk about him.

Customer calls first

This already means that he has an issue that needs to be resolved. The person found your contacts, dialed the number, waited for an answer. Here your task is to politely greet him, introduce yourself, learn about the problem. This will give a charge of a certain trust when the client understands that a real person is also sitting on the other end of the wire, and a robot manager. Do not deceive his expectations. But at the same time, give the opportunity to be convinced of your professionalism, since the caller is far from always an expert in the field of goods or services for which, in fact, he called you. When you learn about his preferences, state them clearly and concisely in your own words and give the client the opportunity to agree with you. And then make an offer and arrange a meeting.

You call first

In this case, the first priority is to find out if the person has time to talk. If not, ask when you can call back, because at the moment a busy interlocutor, if not hanging up, is unlikely to pay enough attention to your proposal.

The rest of the client communication script looks standard:

• Introduce yourself;
• Learn about the needs of the interlocutor, clarify them if necessary;
• You make an offer;
• Make an appointment for a meeting.

Separate nuances are already selected for each specific area.

If your product or service is intended for business representatives, and not corporate clients, ask the interlocutor who in the company is authorized to respond to proposals like yours and contact this person. And then proceed according to the knurled scheme: defining the problem - your version of its solution - price issues - confirmation of interest. And use the necessary marketing moves - give information about discounts and other favorable conditions.

In practice, such telephone conversations look like this (example):

- Good afternoon, my name is ..., I am a representative of the company ..., we are selling stationery. Do you have time to talk?
Yes, I'm listening to you.
- Tell me, do you use forms for printing tax documents?
- Yes, we use it.
– That is, the purchase of such documents is relevant for you?
- Yes, that's right, what do you want to offer?
- Our company will be interested in cooperation in the supply of such forms for you. We are ready to discuss individual pricing policy and terms of cooperation.

Then the conversation will go on by itself if the person is really interested in your offer. In case of refusal, try to find out its reason and offer an alternative option for cooperation. Do not hesitate to ask questions and have the interlocutor to feedback. This is the only way you can build a constructive dialogue.

Retail chains very often use such techniques in negotiations, mentioning that they are opening new stores, thanks to which suppliers will increase sales and expand distribution. And the phrase “sales volume” is such a universal key to any seller, including a mechanism for arousing need. "Sales volume" - and that's it, the reaction went.

The next method by which negotiation is manipulated and based on need is "an image of a terrible future." This is not an antonym, but a logical continuation of the previous technique. The opponent is vividly drawn a picture of the suffering that awaits him in the event that he does not accept the additional terms of the contract.

When a person is already mentally immersed in that "Happiness" which awaits him under the condition of the conclusion of the contract, he is painted a picture of his nightmarish existence, awaiting the condition of not signing the document, with resistance to the "normal" terms of the agreement. From the lips of buyers, it sounds something like this: "Companies that are not represented in the networks will leave the scene in 2-3 years or will drag out a miserable existence, being raw material processors." The purpose of this technique is to show the slow-witted enemy how bad it will be for him, that is, to increase his need, but this time not at the expense of the promise of benefits, but vice versa. The effect of this technique is enhanced by the fact that people are very reluctant to think about the problems that may await them ahead. It is much more pleasant for a person to talk about a bright future, and he strives in every way to leave the “unpleasant” field. All insurance sellers know this. And there are two ways to leave the “irritation zone”: either accept the conditions of the enemy, or hold positions, defending the interests of your company. The first option is more often accepted, it is both safer and much less painful, especially if the negotiator is risking money other than his own.

At the heart of both of these techniques is the need that pushes the retail manager to go to his management and beat out additional discounts for customers. The desire to satisfy the need as soon as possible forces us to sign contracts on unfavorable, ridiculous conditions in advance. It is the need, correctly raised in the supplier, that is the factor that determines the work with the network; and good buyers, good negotiators skillfully use this.

How to deal with it? Details about negotiation techniques are discussed in my first book, “Techniques and Techniques for Effective Sales”, where a whole block is devoted to negotiations, methods of dealing with objections and manipulations. As part of this book, we will talk about conceptual things that determine the possibility of applying techniques that often predetermine the outcome of negotiations that have not yet begun.

How to deal with the influence of need on your negotiations?

First of all, you must get rid of it. It is not so difficult. The simplest thing you can do is to remove the word “need”, “necessary”, “strategically necessary” from the lexicon of all salespeople in your company. These are words that convey emotion and do not carry additional meaning.

When I start my seminars, I ask the audience: “Tell me, who needs networking strategically?” 95% of participants raise their hands. At the end of the seminar, when I ask the same question, no one raises their hands.

The words "necessary", "necessary" should be replaced with other words. Instead of the word "need" - "want", instead of "strategically necessary" - "such clients are important to us." These expressions retain the meaning of your statement, but change its very essence and emotional coloring. Feel the difference in the answer to the question of your opponents: “Do you need clients like us?” If you answer: “Yes, of course, they are needed,” you immediately fall into the trap and you will definitely feel it. With such an answer, you immediately convince your client - the trading network that you cannot do without it, you already show your need for their positive response.

But if you answer the same question something like this: “Yes, of course, such clients are important to us, but the interests of the company are much more important,” then the very atmosphere of negotiations will be completely different. You will change the role position from "weak - strong" to "equal - equal". When you change roles in the process of negotiating the terms of cooperation, change the words "need" and "need" to the words "important" and "want" or "not very interesting", you begin to change the very structure of negotiations. Many opportunities for manipulation disappear immediately, you move into another plane of interaction, into the space of partnership or, in other words, equal relations.

At the seminars “Effective work with chain stores”, I and the participants analyze many examples and situations that occur during negotiations between suppliers and chains. At the same time, we learn to select synonyms for the above words expressing need. After the seminars, many letters come in in which the listeners express their gratitude to me and their surprise at how much easier it has become for them to conduct a dialogue with network clients. They are amazed that a simple change of words helps them to significantly change their position in negotiations, to achieve much greater success in their conduct.

But need- this is not only the lot of the supplier, the need is inherent in all people, and people work in all organizations, including retail chains, which means that not only suppliers, but also their opponents - buyers can fall into these tricks and manipulations.

Your task as a seller is to overcome the need for yourself, to get rid of the complex of the needy. You must remember one simple truth: you do not have an urgent need to work with networks, you are just interested and would like to work with this network too.

Your next task is more difficult - arouse a need in your client. On the other side, people like you work, and you must structure your speech and negotiations in such a way that they begin to need the services of your company. And if you succeed, there will be much fewer problems in working with any client, and more pleasant moments.

I am very often told that this is impossible, networks do not need anything, and if they need anything, then competitors will quickly give it to them. I agree, it is impossible for someone who has already decided so. If a person has convinced himself that he will not succeed, then even with a surprisingly successful set of circumstances for him, he will fail the case. And the problem here is not in the clients, it is in the head.

HUMAN your strongest opponent, and the struggle with yourself is the most difficult of all. There is even a special term for this - self-sabotage. It has been described in detail in the literature. Some companies, when selecting their sellers, try to protect themselves from people with similar sentiments. They hold a special competition. It is simple: a representative comes out to the applicants and says, showing a large bill, that this banknote will become the property of the one who takes it first. Out of ten candidates, no more than three rush to the banknote. And the rest remain to sit, each of them then explains his behavior in different ways: from the words “that I’m like a fool ...” to “they would have cheated anyway.” In other words, a person forbids himself to achieve success in this or that enterprise.

The mechanism of self-restraint works constantly, people forbid themselves a lot, only because of one fear of failure. For clarity, I can give an example. One of the sources of information about the client may be your competitors: have you tried to talk about the client with them or are you afraid that you will be rejected? I ask this question at every conference where I speak, and there is always a person, most often one from the audience, who has tried, and so - he was always answered. Therefore, as soon as the voice inside says that you cannot impose the need for yourself on the buyer, do not believe it. Better try!

So how do you arouse the need for your services from the purchaser, or better immediately from the entire network as a whole?

Of course, first of all, a unique selling proposition, one that will meet all the fundamental interests of your customers. But this is not a matter of one hour and not one employee. If your company has not yet created a unique commercial offer that arouses great interest among your potential customers, then in one week or even a month you will not have time to seriously change something, so in this case you already need to think about technologies in negotiations.

Such preparation begins as usual with studying your client, with a decision matrix in the network you are interested in, with the needs of this network, the needs of departments and employees personally. As part of this study, you will learn how everything works, who is ultimately responsible for the decision, how and for what people with whom you communicate are paid money. If you do this all the time, then you will not have any problems, if you are not already doing it, it's time to start. All sales are based on understanding your customers and their needs at different levels.

I had the opportunity to somehow conduct a training on this topic with employees of one of the supplier companies. To my suggestion to arouse the need for clients, they answered: “Well, it’s impossible, at least for the networks, because the networks are megagiants, they can easily refuse us. It may be possible to arouse the need for small clients, but not for networks, especially large ones.

A few months after the training, the head of one of the departments of this company called me: “I would like to meet you. I have something to tell you." Here is what he told me. After training in his department, he began to establish a system for collecting and analyzing customer information. With the help of various tools, including the study of the behavior of buyers, he calculated the system of motivation for the buyer of one of the largest Russian federal chains. He realized that her buyer was getting a bonus for meeting their quarterly marketing budget collections from suppliers. Having learned this, he entered it into the client's card and continued to work.

And at the beginning of June, and this is the last month of the second quarter, this same buyer calls him and says: “Your company has a happy opportunity to get two positions into our matrix for only 40 thousand dollars.” The amount for the supplier company was acceptable, but all the same, even if the price was normal, it was a pity to give money just like that without a fight. My interlocutor agreed with the management of the company to allocate the specified amount so that it could be sent to the account of the network at any time, and the buyer gave the following answer: “Yes, of course, we are interested in this. We'll think about it and let you know our decision in a couple of days." Some time later, he sent a letter confirming his interest in the offer, but at the same time he noticed that the issue of money in the company was resolved, most likely, positively, but it would take some time to agree. Having permission from his superiors and reserved funds, he stopped all contacts with the buyer for two weeks. After that, the bell rang, the buyer showed up himself, of course, in order to clarify the date of payment. The head of the department told him that he was currently on vacation and would deal with the issue of money on the 22nd, after returning to work. Naturally, the baer was indignant: “Are you out of your mind? You are a bureaucratic office, you will do the documents for at least a week!” But he couldn't do anything. In the next 8 days until the end of the month, telephone negotiations took place every two days, both the buyer called, because the fate of his bonus depended on the supplier, and the supplier himself, in order to maintain the buyer's interest at the right degree. In recent days, contacts have taken place literally several times a day, because the buyer was already in need, he understood that these forty thousand were very important to him, and he would not have time to agree with other suppliers in a few days.

As a result, additional agreements were signed at the final negotiations, which significantly improved the company's position in the network: the necessary promotion schedule, additional display and other bonuses that were pleasant for the supplier were prescribed; and this is all within those 40 thousand dollars. Thanks to his talent, the manager of the supplier company has achieved unique conditions in the retail structure, which I have never heard of in relation to other suppliers in this network. For these 40 thousand, he received everything that was possible from the network. Yes, he paid money, yes, he entered only two positions. But the package that accompanied these two positions was much more than that, not to mention there was one at all. If this manager had not managed to hide his need for the network, if he had not been able to arouse the need of his opponent, he would have had to shell out an additional twenty thousand dollars for all the bonuses that now did not cost him a penny of additional funds.

The task of the seller is to find out the need of his partner and sell it to him so that he needs to conclude a contract more than the seller.

One more example. Today, the DIY market is rapidly developing. It is formed mainly by large international networks such as Leroy Merlin, OBI, IKEA, Castorama, and the supplier market in many sectors of this sector has not yet been formed. In general, the situation is now at the level of the late 1990s in the FMCG sector. For many vendors, barcode labeling is a major benefit of networking. In this market, there are many examples of how sellers arouse the need of network customers.

Take sales of wood materials or cement. These markets are partly scarce, and therefore the networks need suppliers who are ready to make additional concessions. Often they enter into agreements on production volumes, even with an advance payment, in order to receive their goods with a guarantee, because otherwise in the summer, at the height of the season, they may be left with empty shelves.

Draw your own conclusions, it is not easy, not at all easy to form a need and sell it to your opponent, but if it works out, then the work from the dues will turn into a normal profitable business for your company and the negotiations will take on a slightly different, more pleasant coloring.

Summing up all the above, I want to emphasize: do not need, desire, but do not need. Get rid of the needy complex! Retail chains can't live without suppliers, and vendors without chains can do it for now, don't give up too soon.

Rules for a retail chain buyer negotiating with a supplier

Later in this chapter, I want to draw your attention to the techniques used by buyers in negotiations with suppliers. Often, most of them are used at the initial stage of interaction, when the background of the entire negotiation process is created. During this period, a positional struggle takes place, dominance is established and the person who asks is determined, in other words, it is decided who will receive how much and who will pay for all this.

What is negotiations with a retail network? Today's market is a consumer market, not a seller's market, it is saturated with offers, and the buyer can already choose from a variety that he no longer needs. If we transfer this to relations with the network, then we see the same thing: there are much more contenders for one meter of a shelf than it can physically accommodate. Therefore, the position of the buyer is initially stronger than the position of the supplier, he is the buyer - the ion chooses. If we compare negotiations with chess, the supplier always plays with black in the absence of several pieces, the buyer with white, as a rule, with a handicap of 2-3 moves. The task of the latter in the negotiations is at the first stage to confuse the enemy, to force him to follow the track laid by the network, and immediately accept the imposed tactics of behavior. Bayer will do everything possible for this, use all the tricks that he owns. In negotiations, as in martial arts, surprise and the force of the first blow provide half the victory. Therefore, I suggest that you consider the conduct of the negotiation process from the point of view of the buyer, in order to understand the alternation of his methods, to see their meaning and possible consequences. At one time I was lucky, and I got a complete understanding of the concepts of negotiations and the system of training buyers.

Thanks to this, I had the opportunity to analyze how they negotiate, what methods they use and why.

Next, I want to focus your attention on the concept of negotiation purchaser with the supplier, at the same time, note that it does not belong to any one network, this is a combined “hodgepodge”, the general line of behavior of the buyer of the distribution network during negotiations with suppliers. In short, the concept is: by offering as little as possible, demand the impossible. However, there are a number of rules that clearly explain certain techniques and ways of influencing suppliers.

Rule number 1.Never be enthusiastic about a supplier. Never show any emotion, only skepticism. Don't make decisions.

Often, when you come to the network, a person is sitting in front of you with an impartial face that does not express any emotions. Carnegie also taught us to smile and show maximum attention to the person to whom we want to sell something. And you see a buyer who does not smile at you, is unfriendly, cold and even frankly shows his disdain. At the same time, he treats any of your proposals with coolness and constantly “dynamite”, saying something like this: “I need to think ... I don’t know if we need this ...”, etc.

At this point, you begin to realize that the situation is not in your favor. You try to somehow defuse the situation and make more and more mistakes that your opponent fixes and tries to lead you to the decisions he needs. At the same time, the more efforts the supplier makes, trying to defuse the situation, the lower and lower he lowers his status and the more mistakes he makes. This technique is simple, and its goal is also simple: to unbalance the opponent, make him fuss, make mistakes, and eventually lose.

The countermeasure to this technique is the mere knowledge of it. It is enough to understand that this coldness is not directed against you personally, but at your company within its framework. official duties. If you experience this kind of behavior, you don't have to make an effort to defuse the situation, you are not a hired clown. Try not to perceive the emotional background, react to it neutrally, it will work like in aikido: your opponent, starting negotiations with such a move, has already planned aggression against you, she is already in it, you just need not prevent her from leaving, but you don’t need to help either. Let him cope, your task, given his behavior, is to achieve your goals.

Rule number 2.Always react negatively to the first sentence. Express your refusal out loud. Be surprised: “Are you laughing?” Express as many negative emotions as possible. Never accept the first offer, even if it's excellent.

The task of the buyer is to make you doubt, to get out of balance. He can achieve this by very negatively expressing his protest against your first, and maybe your second proposal. This is easily explained - accepting the first offer will disappoint both parties. The buyer feels that he could have demanded more, the seller regrets that he did not offer less. The task of the buyer in this case is to make the supplier doubt his offer, to feel uncomfortable that it turned out to be so “bad”. The buyer is working to destroy the position of the seller and his homework, he seeks to negotiate according to his scenario, in which the opponent is assigned a far from heroic role. In a situation where home-made commercial proposals have been destroyed, the supplier has to come up with new conditions on the go. Any improvisation is good only when it is well prepared, in any other case it leads to additional errors.

Opposition to this technique is still the same emotional restraint, careful working out of pre-prepared options, which we talked about at the beginning of this chapter. It is important not to succumb to emotions, but to work with specifics, to find out what exactly does not suit you, what you would like to see in the proposal.

If you have prepared several scenarios, well studied the needs of the client and the capabilities of competitors, then this technique will not take you by surprise.

Rule number 3.Always ask for the impossible. This gives room for further maneuvers. It is possible that your sky-high request will coincide with what the supplier is willing to give. Insist on a very large margin, and it will be enough for you to reduce it a little so that the opponent agrees, confident that he is a skillful negotiator.

In my practice, I often meet companies that say, “Wow! We made them! When you start reading the contract, you understand that the situation that has arisen can be described as follows: “We traded - we had fun, we calculated - we shed tears.” I repeat: the buyer's task is always to demand the impossible. The more he demands, the easier it will be for him to negotiate in the future.

Here the so-called one out of six rule: if the buyer wants to receive a discount of one ruble, he must demand a discount of six rubles; and, perhaps, that they will agree with the seller on three rubles. For three! Despite the fact that initially he wanted only a ruble. In negotiations with such clients, I divide all their conditions into six, no less.

In my practice, there was such a case: together with the customer - the general director of the company, I analyzed the work of the network department. During the discussion, the director postponed the contract with one large German retail chain with the words: "Everything is fine here, I controlled it myself, we wringed out our conditions there." I nevertheless began to study the document with great interest and asked to describe the dialogue process itself. When we went through the third round of negotiations in our memories, the director, closing the contract, sadly said: “I realized where we made a mistake!”

Everything was as per the scenario: 110 thousand USD were requested from his company. e. for the contract, as a result of three-month negotiations, they managed to bring down the price to 95 thousand, but as it turned out later, the planned amount for their company in the retail network was 70 thousand c.u. e. Supplier negotiators were afraid that the network would not continue cooperation, and the company was caught between two fires: network pressure was reinforced by pressure from company employees who, under the influence of need, were afraid to defend their interests in negotiations.

When unrealistic conditions are demanded of you, you can accept them, or you can refuse, asking to promote such large sums, and if you defend your interests, then you are more likely to keep them.

Rule number 4.Tell the supplier to think about his offer. Let him leave and return with better conditions.

What is the purpose of this approach? Again, like the previous one, it is designed to unsettle the seller. After the buyer refuses to conduct further negotiations, after his urgent request to think over his commercial offer again, the supplier returns to his company and begins to revise his offer again, which he already did taking into account the market and the well-known requirements of retail chains. What does he think about in this case? About the price, about the terms of the contract: about the delay, about bonuses, additional services. At this moment, he enters into battle with his most terrible opponent, which is almost impossible to defeat - with himself. He acts as a buyer for himself, he "cuts" himself.

And if later he tries to analyze who pushed him to such unfavorable conditions, he will come to a disappointing conclusion: he did it himself. No purchaser, no one else could “squeeze” him like that. Because if the supplier "fell for" rule number 4, he enters into a struggle with the inner "I", starts the battle of one hemisphere of the brain with the other.

Have you ever tried to play chess with yourself for money? Try it. I sometimes do this - I last no more than ten moves, then there is a threat of a split personality. Take the risk yourself and you will understand what happens to the supplier if he forgot about this buyer's rule.

How to deal with this technique? What can be opposed to him? Firstly, you should not immediately rush to remake your proposal, this turn of events should have been taken into account when preparing and developing negotiation scenarios.

Secondly, it is desirable to clarify what specifically does not suit the buyer in your proposal. Feel free to ask questions, if there are no answers to them, then there is nothing to discuss. For example, in such cases we acted in this way: we sent our proposal by mail, having previously written it on paper with watermarks, or painted it in a pattern, added decorations to the text already seen by the buyer. Our managers were asked: “What kind of circus is this?” To which they answered: “You didn’t have any specific claims to our commercial offer, to the conditions proposed in it. We decided that you were not satisfied with the design of the document, so we changed it.” Naturally, in most cases, further negotiations went on in a normal way, since both sides understood that this method of pressure did not work and a new one had to be tried.

If you are not specifically told what and why you do not like in your commercial offer, you do not need to change your own conditions. Do not play against yourself, because under such conditions you will always lose.

Rule number 5.Feel free to use illogical arguments. This is a very strong technique, it confuses the enemy.

Illogical argumentation is a very interesting and sometimes fascinating device. Imagine the situation: you are negotiating with a person, selling him, for example, vodka. And they say to you: “You know, this year is the richest coffee harvest, prices on the world market have simply collapsed, and you don’t want to give us a discount on vodka! The coffee companies give us a 45% discount, and you don't want to give us 4%." When completely different things are trying to connect in this way, it is very difficult to understand who is in front of you: a person who is trying to “hack” your brain, or just a little strange gentleman.

COMMUNICATION when using rule number 5, it is very reminiscent of a joke:

“A girl is driving a car that has run a red light. The traffic police inspector stops her and says:

Girl, you ran a red light!

– Young man, look what color is my car?

- Red.

- What color is my dress?

- Red.

What color is my bag?

- Red.

“And how am I in all this and green?!”

If you come across such an argument in the process of negotiating with your buyer, perhaps the most effective thing is to accept his terms of the game and find the same absurd answer to his illogical argument.

As they say, they knock out a wedge with a wedge, and for a manipulator it will be, at least, unexpected. To his remark about the coffee company's price drop, one can respond: "But Coca-Cola does not give even a two percent discount." Further, the conversation will be like a conversation between two crazy people, when one says one thing, and the other answers him completely differently, poorly connecting the parts of the conversation with each other.

Paying the buyer in his own coin, you begin to waste his time budget. As a rule, he is not ready for this, and he most likely does not have the necessary resources for this, his role position does not imply your use of exactly the same technique.

No matter how this tactic changes in relation to you, you must remember and understand that this is just a trick, the purpose of which is to confuse you. And any trick is effective only when it is unexpected, this is taught in all martial arts. When I was doing Greco-Roman wrestling, back in school, we had a guy in the group, Yuri, who was great at throwing over the hip and spinning. And at the competitions, he won the first two fights, but then he managed to do it more and more difficult, and the judges gave him warnings for passive combat, implying that he would use the same techniques. His opponents already knew his style and built their defense in such a way as to avoid his strong moves. Gradually, Yuri stopped winning fights only due to his favorite tricks: he did not make them worse, just the opponents were already ready for them. Therefore, when preparing for a negotiation, it is often enough to brush up on the most common dialogue techniques, such repetition makes you less vulnerable to their effects. Read this chapter of the book before you go to any network office and you will feel better.

We all have a bad habit of forgetting knowledge, so I strongly recommend that you put all the negotiation techniques in one notebook and be sure to repeat them before each business meeting. Remember: forewarned is forearmed. On the reception that you have noticed and about which you know, it is almost impossible to catch you.

Rule number 6.The broken record rule.

The next technique is the so-called broken record. During its use, the buyer repeats the same objection as if he was stuck: “You have high prices! Your prices are high! Your prices are high! - well, or something like that. This technique is especially effective in combination with illogical argumentation. Each of us got acquainted with this technique in childhood, when someone asked to buy an elephant. Remember?

Buy me an elephant!

- Get off!

- Everyone says “Leave me alone!”, And you buy an elephant!

And so on ad infinitum. Almost the only way out was to shut up and ignore the "elephant worshiper" or go on an "endurance marathon" in the hope that he would get bored sooner.

Almost the same is true in business, in negotiations. And although we think that now each of us is much more solid and smarter, but try to get away from the child who will specially catch you on this old joke with an elephant. Despite the age difference, it will not be so easy.

If you see that this technique is being used on you, you can either use the “broken record” as a counter-technique, or ignore the monotonous claims, trying to present them as a ridiculous oversight of your opponent.

Silence is also quite effective. A pause is generally a very powerful tool, much more powerful than many others in a negotiator's arsenal. The person who knows how to pause, and for a long time, almost always wins. You can read more about this in my book "Effective Selling Techniques". In response to a “broken record”, you can not only say something or let it go past your ears, as if you didn’t hear it, but, on the contrary, make a significant pause, putting such an emphasis on a repetitive claim that your opponent did not expect, and then work with this “stupid objection” as if it were a real one, diligently driving the buyer into a logical trap invented by him.

Rule number 6 hits first of all the opponent's confidence, his time budget and all preliminary logical constructions.

When a supplier goes to negotiate, he expects to be engaged in a dialogue with him in the same way as he would conduct it himself. But there is a small but significant omission here. He imagines how he would negotiate about HIS business, that is, assuming that he and his product are needed by the client, and this is often not true. Therefore, when you are preparing for a business meeting, try to think like a person who is paid a premium for collecting extra money from people like you, and possible negotiation scenarios will sparkle with new colors.

Rule number 7.Be wise, pretend to be stupid.

Ask the supplier to explain the offer, say you just don't understand.

The good old trick, about which we know so much from literature and always laugh at those simpletons who fall for it. In movies and books, this technique is often used by beautiful girls who pretend to be stupid; and also Commissioner Colombo, who, although he does not look like a beautiful girl, masterfully masters it in his investigations.

The essence of the rule is to clearly and immediately give the opponent an advantage, to show that he is the smartest here, to make him feel special, chosen, like Harry Potter. As soon as a person, within himself, considered the interlocutor weaker or less intelligent, he had already taken the first step towards his defeat. You can not underestimate the enemy, in fact, as well as overestimate.

How does this approach manifest itself in negotiations? You may be asked to tell us more about the production of your product, about the specifics of the technology, about the details of your commercial offer. At the same time, often asking again about the simplest things that are obvious even to a child, each time asking to explain this “incomprehensible place” to “stupid me”. In such a situation, the supplier may feel superior, begin to reveal his offer further, coming up with new and new ways to convey information to his “less smart opponent”. Pretending to be an idiot, you can test your opponent's patience for a long time. The supplier, repeating the same thing several times, falls into a set trap and gives much more information than he originally planned. This primarily allows the buyer to use the seller's resources against him. Having received additional information, he already has greater freedom of maneuver and the ability to put pressure on conditions from new, previously inaccessible positions.

How to deal with this technique? No need to talk too much! Do not think that the meeting room is the place where you can spread the peacock tail and sing spring songs. This is a high risk area for your budget. You must understand that it is not a weak-minded or just a stupid employee sitting opposite you, no one will put such a person in a responsible position, too much is at stake. Each buyer knows the techniques of negotiating, and his task is to get you the most favorable terms of the contract. And how he does it depends on his preparation, plan and how much you will help him with this.

Don't feel sorry for your opponent when you "feel like he's slowing down", respect him, remembering at the same time that he, like you, is a professional. And that is why you need to exercise maximum caution.

Rule number 8.Always be ready to interrupt the discussion.

Try to put pressure on the opposite side, because the supplier always faces a dilemma: make concessions to you or lose all business with you. Despite the fact that you led the negotiations to a conflict, the other side also feels responsible for this.

How is this to be understood? It's easy: if the buyer leads to a conflict, then most likely he will enter into it, and along with him, of course, you. At first glance, you have very little choice, because if you were dragged into such a situation, then you are to blame, and if you did not respond to the attacks, then you lost or admitted your guilt, which is basically the same thing.

And there are few options for a peaceful outcome of the case, you join - you lose, you do not join - you also lose. There are several ways to avoid rule number 8.

Option 1. If you see that things are heading towards a conflict, you can safely enter into it first. You will still be made guilty, otherwise you will really be the initiator, and maybe, if you play skillfully, even make the purchaser feel guilty in front of you, even a little. By being the first to confront, you will demonstrate that you do not need this client, that working with him is not as valuable to you as your dignity. If you continue to try to negotiate further, evading the conflict, try to extinguish it, find out conditions acceptable to your opponent, make concessions to him, then by doing so you will increase the visibility of your need. If you see that the confrontation was formed by chance, then, of course, you can try to extinguish it. If the situation was created on purpose, intentionally, as a manipulation technique, then all attempts to smooth it out will only aggravate your situation.

Option 2. Don't help the buyer. Both sides always participate in the conflict, each of which needs the reaction of the enemy, especially the aggressor needs it. He needs the “victim” to begin to evade, resist or show his weakness. If we consider this from the point of view of the internal energy of a person, then the attacking side needs to be fed by the weakness of the “victim” or its resistance. But since in most cases the rebuff is extremely sluggish, more like weakness, it is precisely this position of the defender that increases the pressure on him. So, without replenishment from the second side, the aggressor fizzles out.

You have probably seen or even participated in scandals and conflicts, both at work and at home. This is especially true for the latter: in shops, transport, on roads and other public places. Some person who either has little communication in life, or just a lot of anger at the world around him, starts a scandal, and if he is ignored, he retreats quickly enough, but if they begin to answer, then the real Waterloo unfolds.

How to avoid escalating conflict? Of course, the best option would be to simply silence them by force, but in the case of a network, it is rare that a provider has such a resource. Each person, and even more so the negotiator, decides for himself what style of dialogue to follow, but in order to smooth out the conflict, if necessary, it is better, in my opinion, to be guided by the same rule as when extinguishing a fire - to eliminate the raw material base. In the case of fire, the raw material base is either a combustible substance or oxygen. Conflict is about human emotions and reactions. As soon as they are eliminated, the flame of conflict fades away.

This is both difficult and easy to do at the same time.

The difficulty lies in the fact that you need to abstract from the emotional component and not give your opponent a chance to use your emotions and actions to escalate the conflict.

No need to make excuses, no need to reassure, nothing personal - just business. In a conflict, the principles of "mental aikido" are fully revealed - use the strength and energy of the enemy against him, do not prevent him from getting bogged down.

And the simplicity is, "don't do what you don't like." If you don't like to swear, don't swear, don't argue - smile and be open to the world. More or less like this.

There is another option, which is to try to translate the conversation into numbers, facts, discussing only reality, not emotions.

In life, of course, all the possibilities are used in various combinations, because, fortunately, there are no unambiguously correct methods and styles of behavior, there are an infinite number of them, and it depends on each individual.

Summarizing all of the above, I want to say the following: if you find yourself in a situation of conflict, then you need to choose a course of action only according to your inner feelings and negotiating style. See for yourself what to do and what to use: the distant smile of a Chinese merchant or retaliatory aggression.

Rule number 9.For negotiations, always seek to meet with the top management of the supplier.

Many retail chains invite the heads of the supplier's departments, and not just his managers, to the first negotiations.

What exactly are buyers looking for? Why do they do this and what does it lead to?

This requirement has one simple purpose - to put the supplier company in a more vulnerable position. Get access to the decision maker to have serious leverage on the sales manager and the company as a whole. You need to remember that a buyer is a line employee, he does not reach the rank of a commercial or general director of a company, he does not even stand on a par with them. So if negotiations are considered from the point of view of hierarchy, then a commercial or general director should not go to a simple purchasing manager. When this happens, when the buyer has direct contact with the top management of the supplier, he has the opportunity to work through the head of the seller, leveling all his attempts and efforts.

I often encountered similar situations when the sales manager is very tough in defending the positions of his company and the buyer is trying to invite the management of the supplier company to negotiations. At the same time, the manager is told something like this: “What kind of manager did you send us? He doesn't seem to want to work with us. You will first figure out in your company whether you want to work with us or not, and then come to the negotiations.” This often leads to the fact that the director reprimands his own employee and concludes an agreement on the terms of the network. This technique allows the buyer to get additional conditions, more favorable, because, regrettably, the weakest link in the negotiations is always the leadership.

Moreover, the higher the position, the more disastrous are the negotiations, except for those cases when "playing bosses" participate in them. This happens because any leadership has several disadvantages inherent in its position and capabilities.

First minus- managers rarely negotiate, because this is not their main activity, their task is to conduct business within the company, rebuilding its work, and in their structure, in any conflicts and discussions, they always have a stronger position than most employees. The lack of daily negotiation skills leads to the fact that people lose the so-called crust on the nerves, which allows them to defend themselves against tricks and negative blows to their ego.

Second minus They are accustomed to command and make decisions in their firm. It's good in running a company, but it's bad in negotiations. It is easy to put them in a situation of choice: either we make a decision now, or we don’t make a decision at all. In this case, it is better to postpone the decisive meeting, which is usually done by a person experienced in the art of negotiation, but not a leader who does not have such experience, and often also driven by additional ambitions.

Third minus- they have more backlash in terms of resources and capabilities. If a sales manager has a discount corridor from 3 to 10%, then for any director it is 10–20% and, accordingly, 10% for him is only half of what is possible, while for a sales manager 5% is already more than half. That is why the buyer always seeks to establish contact with the supplier's management, this allows him to receive the most favorable conditions for his company.

How to deal with it? You just need to prevent the buyer from having a direct dialogue with the top managers of your company, but if this happens, it is advisable for the management to follow a few rules.

¦ Never visit clients without a manager serving them, except for checks.

¦ Do not put your seller at a disadvantage, do not delete all his agreements in one fell swoop.

¦ In the event of a conflict between a manager and a client, consider the conflict from different angles, investigate its real causes, and only then make decisions.

¦ Look at the actions of the client in terms of his business and his interests.

If followed, these simple rules can greatly facilitate the life of your company. They are simple, but often, like everything simple, they are difficult to perform. It is they who will help you protect yourself from this last rule in this chapter.

So, we have reviewed with you the main points of negotiating with the network and some of the most common options for pressure on the supplier in the negotiations.

It should be noted that such a complex topic as negotiations with retail chains cannot be exhausted within the framework of this chapter, the dayine tried to do this. I tried to reflect my view on this topic, to show those techniques and those basic principles that must be applied in negotiations with such complex clients as retail chains. I hope I succeeded. There are a number of books on negotiating with difficult clients that you can always use. You can also read more about conducting a business dialogue, dealing with objections, identifying needs and price bargaining in my book. "Techniques and methods of effective sales", which is quite actively sold today in the bookstores of the country.

I hope that after studying this publication, many managers will look differently at the negotiations that they had a chance to conduct, and will take a different approach to those that are yet to come, and thereby increase not only the profits of their companies, but also, naturally, improve their personal well-being.

Summing up the fourth chapter, I would like to say the following: do not need, but desire. And each time carefully prepare for negotiations, even if it seems to you that you will win them anyway.

Fight for the result to the end, try all the ways, because we are talking about your money, do not give in until perseverance begins to cost more than retreat. It is important to remember that 80% of good offers are made at the last stage, when both parties have already used all their tricks. Hold on and don't need it!

Organization of work with retail networks. What you need to increase your profitability

Negotiation, conclusion of an agreement with a retail network, introduction of the necessary assortment - all this is not the end of the story. It's too early to wipe the sweat off your forehead and shoot each other with champagne corks "with a feeling of deep satisfaction". The conclusion of the contract is not the end, but only the beginning of the most difficult work that exists in cooperation with networks. Now you are faced with the issues of meeting the supply ratio, finding the required amount of goods, timely delivery, providing after-sales service and many others, the main one of which remains pulsating like a sore tooth - "ensuring the rate of return when working with a retail network."

Pricing policy when working with networks

Even at the stage of concluding a contract, many companies unnecessarily recklessly declare: we need to enter the network at any cost. As we already know, this is a manifestation of the need factor, to the development of which the networks themselves put a lot of effort. Many suppliers, in order to bring their products into the network matrix, are ready to make many concessions. Therefore, they agree to most of the conditions of the buyers, and tired of long negotiations, but happy because they are in the matrix, they are even proud of it.

A couple of months or even quarters pass, the euphoria goes away, and the question arises: “Is it so good that they “entered”, what is happening with our bank account now?” And after small financial calculations, the eyes begin to water, and the hands tremble when reporting to the management or owners of the company about the financial results of the breakthrough for which the award was once received.

Often there is a situation when the prices of goods supplied to the network are directly unprofitable for the company, that is, the more sales in this network, the more losses they bring. And, unfortunately, these are not isolated cases. I know a lot of examples when, in the Auchan or METRO chain, for some alcohol suppliers, each bottle sold brought from 1.5 to 15 rubles of loss, and this fact had a negative effect on the mood of the owners and managers who worked with these networks.

This is how the paradox turns out: the company wants to enter at any cost, enters, and then asks itself: “What have we done, how can we get out of all this now.” The fact is that "at any cost - it is always expensive." After all, what happens is that when concluding an agreement with any large network, it requires discounts, luring the number of stores and the estimated sales volume. At the same time, buyers put pressure on the supplier with all available means, and besides, almost every business publication talks about the dominance of retail chains, about the dictatorship of networks and about the lack of shelf space for all manufacturers. As a result, merchants often subscribe to network terms that are not in their financial interests.

Let's imagine a certain manufacturing company enters the market and strategically necessary considers the presence of its products in all networks of the region. Let's assume that the first chain contracted with (and often trained on "rabbits") is quite small, and it simply requires a discount and a marketing budget in the form of a modest admission ticket and a small list of promotions in which our supplier will have to participate. And it’s good if during the negotiations it is possible to keep the discount within reasonable limits, because there are many examples of when the base price was 20% or more lower. Let's go back to our manufacturer, we have an agreement with a large number of stores at once, albeit with an additional discount, but still this is a quite profitable project.

Inspired by success, sellers go to the next network, which is already larger. Negotiations are being held with this retailer: it already has higher sales volumes and more stores, and as a result, it, of course, is more interesting. Yes, that's bad luck, in his contract there is a now fashionable clause on prices not higher than those of competitors, otherwise problems in the form of non-childish fines cannot be avoided. And everything would be fine, but he also has a retrobonus of 8-12%. And this is where the trouble comes in: you give him the price the same as the previous networks, and on top of that, also a rebate, and additional costs in the form of delivery to each store, which, as we have already mentioned, he has a lot.

Our company is in a bad situation - profitability is declining, and much declining. And then there is already a chain reaction, marketing departments function well in the networks, they closely monitor prices, and every negotiation is a struggle for a discount. Accordingly, if a company enters the network from smallest to largest, then, most likely, it will be “squeezed out” in price more and more. The larger the client, the worse the conditions will be for her.

But this is only part of the problem, if the company also operates in the regions, additional difficulties arise with the regional expansion of networks. It's no secret that, for example, the Auchan hypermarket chain today has low prices for most goods, and this chain plans to develop rapidly throughout Russia, and their prices in all stores will be the same. How then to be with regional partners? For many companies, the expansion of Auchan to the regions will become a significant problem, and they will have to make a choice. Since it is extremely difficult to raise prices in this network. The situation is the same for other large retail conglomerates - METRO, Perekrestok, etc., and the choice will have to be made, as the chains require constant price reduction, as well as their unity throughout the country. Many make the decision to stop working with networks that are out of the price range. Other companies try to solve this problem differently, someone simply reduces the quality of products in an effort to reduce costs, someone reduces the size or capacity of the product, someone works to minimize costs, increase process efficiency. Which of them will be right, time will tell, but, in my opinion, it is already obvious. Some companies, struggling with costs, reduce the staff serving this network, reduce merchandising costs, but all these ways are not effective, as they lead to a narrowing of the distribution channel or even to loss of sales due to a decrease in quality and loss of product reputation.

Where did the price problem come from? Why is it so painful for many companies and why do suppliers enter into contracts on unfavorable terms for themselves in advance?

The answer to these questions lies in the depths of centuries, in the history of post-Soviet retail trade. For a very long time, the main tool for marketing promotion and the fight against competitors was a discount. The bigger the concession, the more competitive you are. And this was caused not so much by the demand of the market as by the lack of the ability of most companies to sell differently, using other, more advanced technologies. Back then, there were no hundreds of thousands of dollars of marketing budgets and retro bonuses that, when discounted, put a heavy burden on the sales economy.

If you remember how proposals were made before, then much becomes clear. Price lists were sent with prices depending on the selected volume. And when the networks became serious players, most companies, without going into the details of the contract, gave them prices on the same principle, large volume - a big discount, like a wholesaler. But a retail network is not a wholesaler who exports, promotes and sells himself, asking nothing for his work, except for a discount; the retail network tries to sell all its activities as a service, to shift all its internal costs, from the delivery and display of products to the maintenance of information bases, to its suppliers. Substantiating their position, large retail chains indicate that their activity is a complex technology for the sale of goods, which is an integral logistics and marketing complex for the movement of goods from the manufacturer of goods to the basket of the final buyer. All this significantly changes the economy and the final profitability of operations with this client. That is why the prices offered by retail chains should be significantly higher than wholesale prices, they should take into account all the additional costs that the supplier will have to pay.

Companies that have managed to understand this no longer suffer from price traps that others have set for themselves, they build a policy based not on the interests of networks, but on the interests of their end consumers and their strategic goals on the territory of the entire market at once, in which they plan work, be it Russia or the CIS.

Now it is very important to build a pricing strategy for a product, this is a criterion for the survival of a brand and even the entire company, without a well-thought-out cost policy, it is very difficult for a company to maintain not only its profitability, but also its image. When forming a price offer for retail chains, it is necessary to take into account in the cost of the product how much money will be needed for its promotion and development, what expenses will be needed for its after-sales service, and only taking into account all these data, calculate the final figure. As for the price itself, as in most cases, it is important that it is within the corridor determined by the market, but it is up to you to decide at the bottom or at the top of it, depending on what you are selling - the benefits of working with you or cheapness. No need to flaunt low cost, low price is a poor competitive advantage if it is not backed by highly efficient technologies.

Remember, when you offer discounts during negotiations, you simply reduce your profit. In the dilemma of “what to do” - to give a discount or a large marketing budget - real money always wins.

THAT MEANS what you give in the form of a discount, no one will consider as the cost of promoting the product; even if you offer the lowest possible price, then with sluggish marketing activity, your rating in the eyes of buyers will be low! They need real money, they need sales volume, and it's better to do it all together.

I often ask buyers I know about the criteria by which they select their suppliers, and in most cases the price is in third or fourth place in importance, provided that it is within the corridor. Price competition, price wars - this is a bad way for the supplier, the network will always demand a low price, much lower than it is realistically possible, so you don't need to help it "rob" you. In this, as they say, a bazaar is a bazaar, one wants to buy cheaper, the other wants to sell more expensive, and they will agree in any case. That is why today the price must be defended to the end, and the most competent solution for all network customers would be give one price– the price for retail sales in this region, winning back the status of the client with marketing budgets and rebates. A single price for all removes the issues of equality of the cost of a product for customers, and also levels out discounts, since if a company presents one price for everyone, then this tool becomes unnecessary. In this case, you will have the resources to strengthen the position of your brand, you will be able to fill the advertising budgets of your customers by promoting your products, your sales will grow and you will always be a desirable supplier! It is also important that by showing marketing activity you strengthen your brand, and this, in turn, gives additional trump cards in negotiations for the next year: the stronger the brand, the more accommodating customers are and the shorter the negotiation cycle.

I repeat, in principle, for the buyer today, the price is not the main parameter, its value is significant. The importance of cost is shown only if there is a possibility of comparison, and uniform prices practically remove this possibility.

The company must focus on developing and enhancing the value of its product and offer both for the end consumer and for its business partners. And in this case, you can quite easily get away from long and tedious price negotiations, because the value is not calculated according to the formula “Cost + Markup”, this is a more complex multi-level concept. The value of the product is increased by strengthening the brand through marketing activities, through an advertising campaign and PR. Therefore, the money that can be given in the form of a discount is better spent on promotion.

It must be remembered that after you put your goods on the shelves of the store, the work is not over. The product needs to be promoted further, this requires funds, and with large discounts there will be nowhere to take them. Take this into account when developing a pricing policy, especially when interacting with large chains.

How to deal with fines in networks

One of the most common questions that I am asked as a consultant and author of the seminar "Effective work with chain stores" is: how to reduce fines when working with chains? As complicated as this question is, so simple is the answer. But let's try to figure out what it means.

How to get rid of penalties from your business partner? The answer is simple: in order not to pay a penalty - do not violate the terms of the contract. As the saying goes: “If you don’t give a word, be strong, but if you give it, hold on!” There are two options here: either you do not sign a contract with onerous conditions and fight to the last, sometimes at the cost of cooperation with this client, or, having already concluded a deal, fulfill the conditions in such a way as not to give a reason to apply penalties to you.

“How can you follow it! many will say. “There are such conditions that punishments are immediately imposed for any offense, often not commensurate with the violation.”

For example, while analyzing the contract of a well-known retail chain with my alcohol supplier, I came across penalties for underdelivery. Under the terms of this agreement, if 1-2 bottles were broken during transportation and, as a result, there was an underdelivery, then a fine amounting to hundreds of thousands of rubles was imposed. There were many such "cute" items listed there. Such "phenomenal" treaties are the result of needs, and a very great need, on the part of the supplier.

But before proceeding to the main topic of this section, let's try to understand more deeply what penalties are in network contracts. To do this, it is worth delving a little into the history of retail in Russia.

When chain stores first appeared, they were still weak and many wholesalers and manufacturing companies did not want to work with them. This was partly justified - a small number of outlets, small sales volumes and, at the same time, complex contracts, which even then prescribed entrance tickets, albeit small at first, and fines for violations of supplies, then also still insignificant. The payment of penalties for failure to comply with the terms of the contract, especially the attempt to collect them, were something surprising for the market of the late 1990s and early 2000s. At that time, few people thought about such “little things”, many worked on an advance payment or upon delivery, because the return of money for the goods sold was sometimes no less difficult than the sale of this product itself. Most of the suppliers did not bother to take care of their customers and comply with the terms of the contracts, especially since almost all the documents were drawn up by the suppliers' lawyers. Naturally, since it is not necessary to strictly fulfill your obligations, you can not fulfill them at all. The history of the retail business knows many cases when seasonal goods were sold by wholesalers, ignoring retail. A vivid example is champagne, if some visiting client with a bag of money wanted to buy a car for cash, it was shipped to him without thinking about what was under New Year all retail customers will be left without the traditional drink. Then there was no need to think about retail chains, the era of the distributor reigned on the market.

The chains, on the other hand, proposed a new approach to cooperation, they announced a new era of retail dictatorship and began to prepare everyone for it, demanding the signing of their contracts and the imposition of sanctions for non-fulfillment of obligations. If you remember, at that time it was precisely “accustoming”, there were many non-working fines in the contracts that were not used, but the suppliers gradually got used to them, resigned themselves to the fact that they could still be.

Some companies have started working with networks and have faced both fines and lower profitability in this market sector. These factors have begun to force suppliers to improve their processes and improve their business. But while the networks were small and their sales volumes were also small, some companies did not think about such trifles, noting that networks are not income, but an image. And today, many more companies are rushing to the shelves of chain stores, because, in their opinion, it increases the rating of their product.

Over time, retail chains have become more and more profitable and become an increasingly important distribution channel. And as their importance grew, they began to actively fight for the sustainability of their business, requiring suppliers to fulfill contractual obligations, the basis of which to this day is the stability of supplies and price equality from producers in their region. And if it is still possible to work with the price, then there is an uncompromising struggle about the conditions for the stability and liquidity of the assortment, since the basis of the activity of any network is turnover, and it is possible only if uninterrupted supplies are ensured. Fines began to increase, and this spurred companies to develop.

When I worked as a sales director in an alcohol company, we signed a contract with Auchan for the supply of popular Russian cognac. During this period, the system of regional excise stamps worked, and in order to receive them and paste over products, it took from 25 to 35 days for each batch in our company. The instability of shipments was aggravated by the fact that our side purchased this cognac in the minimum quantities required, which is why it was constantly in short supply.

After another short delivery, Auchan, on quite legal grounds, fined us for several thousand full-weighted dollars. e., in rubles, of course. The management was surprised, paid the bill, but did not change anything. Only a few days passed, and the same network made us a New Year's order, a multiple of the previous deliveries. They handed it over to us in almost a month, but this did not save us, since it took us at least 45 days at best from the moment of purchase to the moment of pasting and getting on sale. The penalty for non-fulfillment of obligations in this case would already amount to tens of thousands of dollars. e.

This amount “cheered up” the management and the entire required volume of cognac was ready for sale in just 15 days. The company has built new technology work with government agencies, supplier and assortment, which allowed to carry out activities in a short time.

Do I need to say that without a penalty on the part of the client new scheme work would hardly have been born. Our market knows a lot of such examples, I think, they are in every company working with the network.

Now the market is gradually filling up, networks are starting to compete with each other, of course, not everywhere yet, but the trend is already evident, which means that they will soon begin to fight for the end client. This will lead to tougher requirements for the quality of suppliers' work: from the stability of supplies to the level of pre-sales preparation and after-sales service. Which, in turn, indicates that fines will increase and they will be taken more and more often. If today there are often situations when chains do not demand payment of a penalty from their partners, only pointing out such a possibility and thus trying to correct the work of partners, then every day, with increased competition between chains, retailers will “train” their suppliers more strongly.

There is only one way out - to comply with all the terms of the contract. This, of course, is easier said than done, and readers will not be satisfied with this conclusion of this section. When the fine is issued, nothing can be done, except to “cry and ask for forgiveness.” But you can work to ensure that punitive measures are not applied to you at all. What to do, what technologies can be used to still reduce penalty payments, if they cannot be completely avoided.

To do this, I propose to work out the following aspects of cooperation with the network as best as possible.

1. Agreement. The agreement itself is a good tool, and there are plenty of opportunities for constructive work with representatives of the network and defending their interests. Using them, many companies operate quite calmly, without undue stress and losses.

But how can you benefit from this document for yourself?

The first rule is that you need to know the contract very well. When I was a sales director, I made network managers memorize the text of the agreement, now I recommend it to clients. A good knowledge of all points enables the employee to easily operate the provisions of this document during negotiations.

I will not be much mistaken if I say that the vast majority of managers working with chain stores are very poorly versed in the text of contracts and annexes to them. This statement is almost as true in relation to buyers, they also know their contract not by heart. Most often, both of them know quite superficially the point about the conditions of cooperation, and even then in the most “interesting” places. “Juggling” in a conversation with the provisions of the contract involuntarily arouses respect, demonstrates the seriousness of preparing for negotiations and reduces the desire to “rip off” the company whose managers understand the situation. After all, it is much easier to do this with those who, apart from their sales plan, do not read other documents.

Studying contractual obligations is not the most exciting thing, but 3-4 hours spent on understanding this text can save a company hundreds of thousands of rubles.

2. Conclusion of additional agreements. As with any contract work, additional agreements are born in the negotiation process. If at the first stage of the dialogue it was not possible to remove penalties completely or reduce their size, then, in order to protect yourself from a sudden increase in sales and shortages of goods, agreements on the volume of supply are concluded, which indicate the volume of sales and the price of supplies, as well as all possible the details of their changes.

Often such agreements are verbal, networks are reluctant to formalize them, but they do not become less effective because of this, and you can always appeal to them when analyzing controversial cases. At the same time, it is not worth putting your technical shortcomings into such agreements, the partners will not agree, and this will not help you either - you need to fight against inefficiency.

3. Conclusion of partnership agreements with the client. I have already talked about affiliate programs and their importance for developing interaction with customers such as retail chains in previous chapters of the book. Private-label and many other common programs may well be joint projects. When choosing them, it is enough to be guided by the knowledge of the client and common sense, so as not to turn yourself into an appendage of your own client. The presence of such agreements and the holding of joint actions does not give you a "golden label" that guarantees immunity, but it gives you freedom of maneuver.

4. Planning your work with the network. This item relates directly to the efficiency of the company, and it gives a greater chance of avoiding such an unpleasant procedure as paying a fine. Its essence is in a simple action - planning and forecasting your cooperation with chain stores.

After answering the question “why do you need this network?” you already clearly see your goals and expected results from this cooperation. Before concluding an agreement, you should thoroughly study your client (chain), its processes, sales and buyers of this network, find out how many people pass through each store of the network with which you plan to cooperate per day. As a result of the study of all this, you will already understand which assortment is better to sell through this network. And of course, you must calculate how much you can sell, what resources you will need to provide the necessary commodity flow. By doing this analysis, you will almost immediately see the weaknesses that can expose you to penalties, and accordingly you can come up with risk mitigation measures in advance. With this preparatory work, it is very important to be critical not only of the client, but to a greater extent of yourself, because failures in your processes are most often the cause of fines. Such targeted planning will save you from many problems: payment of penalties, loss of reputation, wasting time on apologies, etc.

To illustrate, I will give an example, again from the alcohol business. One Russian company importing Spanish wines to our country, after a trip to Spain, where they were given a good reception, was waiting for a return visit from their partners, and in order for the second round of negotiations on cooperation to be more successful, the management decided to do something pleasant for their colleagues - to start their products in Auchan, with which they had previously had a good relationship.

The goods were placed on the shelves, the Spaniards were happy, but then problems began. The stock of the item that was brought into the network was enough for 4 weeks of sales, and the delivery cycle from Spain was 2.5 months after the order. In other words, already at the beginning of cooperation on this name, a shortage of products was laid. Tears where thin, and the Spaniards delayed the shipment for 2 weeks. As a result, when 20,000 bottles of wine arrived at the company's warehouses, the batch, taking into account the sales of a large hypermarket chain, the supplier was fined, and the item was withdrawn from the assortment. This is how the history of the divergence of this company with the Auchan network began.

The lack of competent planning in the example I cited led to large losses, primarily reputational losses - the loss of respect in the network, the surprise of foreign partners who could not understand why orders for goods for hypermarkets stopped, financial - fines and losses on "frozen" in this product money. All this damage could have been avoided if the company's management had taken the trouble to calculate the consequences of its curtsy and the introduction of this position into the assortment matrix.

Sales in networks after the conclusion of the contract

What happens after the conclusion of the contract?

Managers, burning with joy, place an order, which is sent to the network's warehouses. And everything seems to be fine, and only a bright future lies ahead. Many companies even today seriously believe that, having concluded an agreement for the supply of goods to a retail network, they have made a sale, and now all that is required of them is only to ship. This is not entirely true, or rather, not at all.

Having put the goods on the network and considering the process of robots completed, you can stay with your nose and fly out of the outlets in a couple of months. To agree with the buyer on the supply of products to this retail chain is only the first stage. The next one starts after the delivery of products to the landing stage of the store. Today, the logistics in many chains are far from perfect, and sometimes your product can lie in the bowels of the supermarket for several days before it gets on the shelf, where the buyer can take it. But, even after hitting the counter, the product may not be sold. After the hands have reached him, they poke him on the shelf, they really poke him, where there is a place, and good places are never empty in stores. Accordingly, the stage of after-sales service of the goods begins - the implementation of merchandising and BTL events.

Companies that have their own merchandising service, actively conducting trade marketing activities, have a strong advantage over those who leave it at the mercy of network managers. According to our statistics, at least 40% of sales volume depends on who and how displays your products in the store. Work with the goods at the client should not stop for a day. This is the only way to achieve high sales in retail outlets.

Today, the so-called product rating is becoming more and more relevant in networks, and in order to be in its top lines, you must sell more and better. In addition, when making decisions about cooperation, chain buyers have an internal chart of suppliers according to the marketing activity parameter and a number of other criteria (large companies often use special supplier evaluation cards. See the following table). Because it’s not enough to pay an entrance ticket, it’s not enough just to put the assortment on the shelves, for successful work you also need to carry out promotions and monitor the display of your products.

Today, the dominance of network operators in the market of the Moscow region has become obvious, their requirements for suppliers to hold promotional events in support of their product have become not so much persistent as ultimatum. And all companies supplying their product to these customers have to spend serious money on various events. Moreover, their organization and holding become the subject of bargaining when concluding a cooperation agreement. The manufacturer has the choice between independently conducting various marketing campaigns in support of his product or a banal transfer of a large amount of money to the account of the retail network. In any case, part of the organizational issues in this kind of cooperation, as well as financial costs, falls on the shoulders of the supplier.

Most often, the manufacturer uses a standard set of measures that were once successful. From the popular: a gift for a purchase, tastings, participation in a chain leaflet or, less often, your sales assistant. For Western companies, this process is more or less established, but since they use the services of Russian marketing and promotion agencies, everything is not going smoothly for them either.

Many Russian companies have long understood that advertising is the engine of trade, and the engine should always have fuel. Advertising budgets for promotion are growing year by year, but is the money being spent efficiently? In theory, injections into the brand, strengthening its position and attractiveness in the eyes of customers reduce the costs of its passage through the distribution channels. Dealers large and small should be more eager to take it, stores should also welcome such an attractive product on their shelves. But today, large investments in brand promotion do not lead directly to such a result. Many companies spend hundreds of thousands of dollars on their product, push their limits, and the improvements are out of proportion to the costs. And okay, if it were only about financial losses, the main resource that is lost in the process is time, the losses of which are irreplaceable.

Let's analyze the reasons for this and think about how such miscalculations can be prevented. In this section, I will not talk about the basics of building a brand, about choosing a target audience, about researching a portrait of your buyer, about choosing channels for the most convenient and quick communication with him. Here I would like to talk about trade marketing: carrying out various activities aimed at stimulating all distribution channels and increasing the speed of goods passing through them.

If you go to any chain store at almost any time, we will see several companies conducting various promotions. Any event held in point of sale with the involvement of promoters, in itself is a rather costly action. The promoter's rate starts at $7 per hour on the Moscow market, plus there is a fee for holding the promotion of the network itself, as a result, the amount of expenses for the event can be impressive.

The final goal of promotions is to increase sales and strengthen the position of the company and brand in the network. The manufacturer hopes that all investments in this action will pay off: the product will have a new buyer, sales will increase, which in turn will positively affect the rating of the product in the store, and other criteria that are of interest to the supplier will change. But, unfortunately, in practice, most incentive measures use their potential not even half, but much less, without bringing the expected results. This applies to almost all promotions used by companies to promote their product today. It's not even about the people directly involved in the events in the store, and not about the quality of their work, although this, of course, is also the case, as usual, it's about the practice of using these tools and their organization.

The main mistake of today's marketers of the FMCG market and their colleagues from sales departments is that almost all promotions held during the year, even if they are planned for at least half a year, which is not always the case, are extremely rarely coordinated with each other. I mean the absence of a monolithic information flow and interconnected actions to promote your product, which could be noticed by the client and the end buyer.

Most Russian companies do not have multi-million dollar marketing budgets and are forced to save money, but, alas, often such cuts and counting of each ruble leads to even greater inefficiency in spending money. One of the common mistakes in this case is the lack of understanding of your buyer: who is he, how old is he, what is his gender, income, what are his interests and passions, what magazines does he read and whether he reads at all. Ignorance of all of the above leads to the fact that instead of targeted work with their target audience, companies are sprayed immediately on the entire population of our country. Often a portrait of a buyer emerges at a desk meeting of the company's top managers, and such an image is always gaping with gaps and inaccuracies, if at all somehow correlates with reality.

Most of the manufacturers enter the market, motivated by the following strategy: “... put the product on the shelves, “shake”, it will go, and when we start making a profit, then we’ll see what to research and why.” And it would be fine if this was done only when a new product was launched, although this in itself is already absurd. The same thing happens when developing an action plan to promote a product that is already on the market. Such a mistake is fraught with senseless spending of funds, so necessary for development. However, the series of miscalculations does not end with this global error.

The second major miscalculation when promoting a product in retail networks and creating a supporting advertising company is "reverse" financing, that is, not allocating all the funds planned for the year for marketing support, but issuing them depending on current financial indicators. The logic of actions is clear, less money comes, so you need to spend less. It is not without meaning, but following this path leads the development of the product to a dead end. With a reduction in funding, sales incentives decrease, they decrease, profits fall, therefore, the advertising budget is cut again, and so on in a circle until the product dies under pressure from competitors. This error, like the first one, is systemic; it leads to a cyclical reaction in the entire marketing plan, if it exists, of course. If a brand or trademark development plan is scheduled for a year, then cost reduction either reduces the effect, or completely levels it to mediocre.

The third systemic mistake in the marketing support of the product is the inconsistency and lack of coordination of actions and events among themselves. Very often one can observe in the example of retail chains how manufacturing firms simply throw money away.

Let me give you an example: a certain grocery company participates in a leaflet in May, does tastings in August, and palletizes in November. Even if these events coincide with seasonal fluctuations, such a gap between stocks is a big mistake. A single image of the product is not created for the buyer, his consciousness is not affected in any way, if he purchased the goods of this company today, succumbing to a discount on a leaflet, then it is not at all a fact that he will buy it later, but during the tasting it may not fit at all to the counter. But if the same company ran all three promotions in concert, reinforcing one with the help of the other, the effect would be many times different in terms of its monetary value, as well as in terms of brand awareness.

I often discuss this topic with various specialists, who are supporters of holding various promotions gradually, slowly accustoming buyers to their product. And as an argument, I often cite the example of election campaigns, when parties unknown to anyone become widely known. This is not done gradually, often they go to a predetermined failure in elections that are obviously not of their level, investing in their advertising so that every resident in the area that is important to them, one way or another, learns about their existence, their position, etc. And after that, using this acquired popularity, they go into another circle, and at this decisive time they need much less funds for their promotion. If they, following the example of many manufacturers, approached this gradually, then it would take a dozen years and several times more resources to achieve the same result.

It is rare for a product to have an infinite resource of time; today, at our speeds, a product is given two, three years at the most, and then it must go away or change significantly. And in the sector of high-tech goods, a year is the entire allotted period of the life of the name. Therefore, a complex of coordinated actions will bring a much greater effect both in the behavior in a single network and on a regional scale. In my opinion, with a limited budget, it is better to direct it to the development of a product in one strategically important network, rather than spread it in a thin layer throughout the city, this is the so-called raspberry jam rule, known in different variations: the larger the piece of bread, the thinner the jam layer in each section.

As an example of such a campaign, let's consider the following plan for the development and promotion of a product in a single network. Events are divided into two main blocks according to the principle of significance for brand promotion (Fig. 3 and 4).

Rice. 3. Scheme of the first block of brand promotion activities in the network

In this block - the introduction of goods into the distribution network, acquaintance of buyers with it, directing the focus of attention of potential consumers to this product.

These promotions are aimed at switching the attention of potential consumers when placing a position in the network. Their main goal is to reduce the consumer's addiction to a new product and encourage a person to make the first purchase. And also pay attention to the fact that this product can now be bought in this store. The most effective measures at this stage are the following.

1. Participation in the network leaflet. You need to strive to ensure that the leaflet contains not just an image of your product, but also short description his best qualities. This is not always possible, the saying “less is better” is irrelevant in this case: it makes sense to buy a large area.

2. Tastings and consultants. Conducting tastings (demonstrations) and the work of consultants in the store are very effective moves in themselves and bring both an increase in sales and attracting the attention of potential customers to your product. But, unfortunately, very often the implementation of this kind of action comes down to simply finding beautiful girls in the store. So I'll give you a few basic requirements and rules holding these events.

Consultants must be in branded clothing, with branded equipment. The level of their promoter training must be high, they must be able to answer any question about the product. They should also be prepared according to the sales technique, so that if the client is in doubt, the promoter can competently resolve them and complete the dialogue with a purchase. A promoter is not just a pretty young man or girl, he is first and foremost a salesperson. If a potential client is interested, they simply must be able to sell this product to him.

Another important rule to follow when conducting demonstrations and tastings is to create a flow towards the display areas of the promoted product. That is, a promoter is not a static figure assigned to a point on the trading floor. While one is standing behind the counter, the other must by any means create a flow to it, so that the maximum number of customers who visit the store can try the product in a short time. Often, in fact, the opposite happens, buyers approached, asked, well, they were treated or shown. In this case, the potential of the shares is not used even by half. And, unfortunately, most of them go that way. And this applies to the holding of events both by small companies and national ones.

When promoting a product on the network after it has been launched, the “gift for purchase” promotion is effective.

3. Gift for purchase. In this context, this incentive tool is used to motivate the first purchase of a potential consumer. Most people are conservatives, according to statistics, only a little more than 5% of the population is prone to innovation in consumption. Therefore, before buying a new product, many go through an internal struggle: “Do I need this, and will I not lose?” Often a person simply lacks a little push in order to make a decision. And if for the purchase he is somehow “rewarded”, for example, with a small souvenir, then his caution can lose in this internal struggle. It is not necessary to make some valuable prizes an incentive, it can be a pen, a lighter, or an air freshener for a car. The main thing is that this gift should be the “feather” that will tip the choice in favor of your product.

A characteristic feature of the events of the first block is that they are held before the appearance of any sales history, they themselves create it. Therefore, it is quite difficult to calculate the effectiveness of these events, for this you need to conduct research aimed at finding out the level of recognition of your product before the start of promotions, as well as the level of sales in adjacent retail outlets, since very often with the active promotion of goods in supermarkets, its sale in neighborhoods adjacent to this store is also increasing.

Thus, evaluating the effectiveness of the shares of this block is a rather difficult matter, suffering from a large amount of error. Therefore, the main analysis tool here is sales monitoring, the ratio of real indicators and expected sales.

Rice. 4. Scheme of the second block of brand promotion activities in the network

The activities of this block have a fairly clear and tangible goal - to increase sales. They are aimed at increasing the sale of goods in retail outlets through the use of additional display areas, promotions that stimulate an increase in the number of purchases, an increase in the average check amount, etc. A direct indicator of the effectiveness of actions is the quantitative indicator of the units of goods sold. And, as a result, an increase in trade turnover with this client, an increase in the rating of the company and product in this network. When carrying out these events, almost the same tools are used as when placing goods on the network, but there are some differences.

1. Tools become important media support: participation in the printing products of the network, placement of audio and video clips, etc.

Participation in the leaflet should not be a separate promotion, as is usually the case, it should precede a large-scale promotion to increase sales. That is, the advertising module must contain some meaning and inform the buyer about something, creating in him a desire to make a purchase or at least visit this store during the specified period. The placement of information in this way should begin a month before the massive action and also continue during it. A good addition to the leaflet are promotions jointly with the network, such as margin reduction, announcement of the price of the day, additional display in the best places for the promotion period, etc.

Radio spots. They are scrolled in many networks. They are not always effective, but nevertheless can have a significant supportive effect.

Placement of video materials. More recently, another platform for advertising support for goods in the store has become videos that are shown on monitors at the checkout. If the network has such an opportunity, it is necessary to use it.

In addition, it is necessary to agree with the network administration on the placement of additional POS materials both your own and standard network, indicating your product. At the time of the promotion, you need to be sure that the buyer will definitely see your product, and for this you can use all the opportunities that the partner offers: pallet, end display, racks. Agree on a cross-layout for the duration of the action. For example, wines with cheeses, beer with fish or crackers, etc.

2. Tastings should be used not as a gastronomic experiment, but as a selling tool, that is, in this case, the main task of promoters is not only “missionary educational activity”, but also, for the most part, increasing sales. They should harmoniously complement and enhance the “gift for purchase” campaign.

Let me repeat myself and remind you that all consultants-promoters must have a good level of training in sales techniques in order to competently and effectively communicate with customers, and also work not only on a completed sale, but also actively provoke it themselves. That is, not only to serve a customer who has already decided to purchase, but also to actively bring to it everyone who paid attention to the product.

3. Gift for purchase. In this context, this action should be aimed at increasing sales and motivating repeat purchases. If in the first block these were just souvenirs for the purchase of any amount of goods, then here they should motivate them to consume more products than usual. That is, for the purchase of double or triple in relation to the usual volume of goods, the buyer receives a significant prize. These are costly shares. The gift can be different - an additional product, or some valuable souvenir. In any case, it should be such an item that can remind you of the purchase for a long time. For example, T-shirts, good key rings. Thus, you not only advertise the product, but also increase sales.

An interesting move is the delivery purchase certificate or coupon to a significant discount on subsequent purchases of the same item. In 90% of cases, the right to a discount or certificate for a free product will be realized. With this technique, you not only increase sales, but create customer loyalty to your product.

I will give an example from the alcohol industry, one company, when promoting its products - a fairly expensive brand of whiskey, at a price of more than 2,500 rubles per bottle, implemented the following promotion: for the purchase of two bottles, the buyer was awarded a certificate for the third, but with one condition - the validity of the certificate did not begin earlier than 30 days, that is, you could receive your gift only after a month.

As a result, at the end of the action period, 98% of the certificates were cashed. But the main thing is different, this whiskey is usually not drunk in glasses, it is consumed little by little, enjoying the taste. With such consumption, 2 bottles are enough for 1–1.5 months, a person is already getting used to this product, and he is given a third bottle to “fix” in order to completely entice, thus getting a regular customer.

The shares of this block must be cost-effective. Their cost-effectiveness is much easier to calculate, as they are based on a pre-existing sales history, and the increase in volume during the promotion and the continued high sales after the promotion ends should justify the investment. That is, if in the first block money is invested in the future, and since the product is new, the return is expected in the future, then in the second block, sales should increase significantly. And the amount of additional profit received should not be less than the funds spent.

You should pay special attention to the quality of all events, because these are all actions that increase the cost of goods. It is necessary to make sure that each of the spent rubles comes back and brings a dozen other of his brothers with him.

When I visit chain stores, I always watch promotions, and two years ago, and today, companies make the same mistakes, despite articles and speeches, my and my colleagues, talking about how to avoid fatal miscalculations. If you go to a point of sale and take a closer look at the promoters, you will almost always notice a dozen or two mistakes, due to which money simply becomes thrown out. You can list the miscalculations of consultants for a long time, but this is the topic of another book, which will be devoted to trade marketing, and not to networks.

In carrying out promotional events, activity planning plays no less a role than in other aspects of working with retail chains. This activity, like no other, should be based on deep technology and be focused on results, and not on the “creativity” that is fashionable today. In the modern world, the price of a mistake when working with retail chains, when interacting with them in all aspects, is growing literally by the hour.

Summarizing everything said in this section, I would like to say that the events listed above are carried out in one form or another by many companies of various levels, from small companies to national giants. But the mistakes listed in this article are made by almost everyone. If you observe the holding of promotions in large stores and chains, then almost all of the listed shortcomings can be seen even with a cursory examination. The same companies that have already ruled out such mistakes successfully develop their sales at a much lower cost per ruble of profit. And the higher the efficiency, the higher the profit and the level of profitability when working with clients.

How to organize merchandising

In the last decade, the concept of "merchandising" has firmly entered our everyday life. Literally, it means "the ability to sell." More precisely, perhaps merchandising should be defined as a set of events held on the trading floor and aimed at increasing sales of both a single product and a group of goods, or, in other words, it is a system of events held in a store and aimed at making it convenient, pleasant and profitable for the buyer to make purchases.

The store owners think about the comfort for the consumer at the project stage. Location of shop equipment, lighting, layout of product groups - all these are the most important components of merchandising.

There are several equipment layouts in the trading floor. The most optimal, in my opinion, is when store-forming goods are located along the perimeter of the outlet, in the center - racks perpendicular to the checkout line; At the same time, the aisles between the rows should be left wide enough so that buyers do not crowd in narrow corridors. The inconvenience of moving around in a shopping pavilion can make you opt for a more comfortable store.

Today, there are still suppliers who are confident that their work is finished as soon as the assortment has been delivered to the door of the chain store. But along with the saturation of the market with goods and services, the ability to sell the product even after the conclusion of a retail deal becomes vital for every manufacturer. Over the current decade, we have experienced several stages of merchandising:

¦ spontaneous, when the products were exhibited, anyhow and anywhere;

¦ "supplier stage", when store shelves were farmed out to the supplier (it is this period that can also be described as the stage of “merchandising wars”);

¦ transitional, when there was a gradual transition to category merchandising;

¦ category merchandising- when assortment management comes to a systematic approach and the assortment of the network is considered not as a set of individual brands, but as a single category, the results of which are taken into account.

CATEGORY MANAGEMENT- this is such an assortment management process in which a product category is considered as a separate business unit with corresponding requirements for efficiency, profitability, etc. Today, most retail chains strive for this, building their processes and those of their suppliers accordingly. Already now, in most retail chains, a category manager is responsible for the assortment for his group, although not everywhere he has the opportunity to deal with only one category, managing two, and sometimes three groups of goods at once, only partly similar to each other.

Merchandising is a big deep topic, actually a separate area of ​​marketing, and the format of this book does not involve a lengthy conversation on this topic, there are other authors with good articles and books specializing in this issue. I will not consider the rules of merchandising themselves, but the rules of its organization.

Now merchandising in stores is carried out in three main ways, which, of course, are mixed in various combinations.

Method one- the work of its own merchandising service, when the company seeks to serve each outlet to which its goods are supplied. This approach is used by many international and large Russian companies.

Method two- the implementation of the calculation by the forces of special agencies that take on the responsibility of promoting products in networks, for a certain, often hourly fee.

Method three- laying out and performing all the functions of accompanying the goods is carried out by the retail network itself, or rather, its special division.

Each of the methods has its advantages and disadvantages, the first one is very costly both financially and in terms of the amount of time and administrative costs for management. The second is very unreliable, since you have to constantly monitor the level of execution, and besides, it is also quite expensive. My experience of cooperation with specialized companies shows that without sufficient control it is quite difficult to get any worthwhile result for your money. The third method generally has an unpredictable result, from good to such that your product will be gathering dust in the warehouse for months. One of my clients has a well-known large Russian network, the pallet of products lay for three months, and, accordingly, orders were not made due to poor sales. From a warehouse, everything is usually sold poorly.

Merchandising, while improving sales by helping the product move through the distribution channels, remains a very costly business because it requires significant resources. Therefore, when organizing it, the efficiency of its processes is very important, how much each ruble spent increases the overall turnover.

It is quite difficult to calculate clearly and directly the impact of merchandising on the total sales volume; you will always have to take into account subjective evaluative factors. But you can always and should try to make the processes as efficient as you can. There is a simple way, terribly difficult to execute, that goes like this: Strive for efficiency, continuously improve. I think everyone knows how difficult it is to implement it.

Where does the path to efficient processes begin? From the usual mathematical calculations, however, it is necessary to count not the diggers, but your money.

¦ How much does one merchandiser cost your company?

And taking into account administrative expenses: taxes, UST and others; shares in the office lease; expenses for executive salaries, mobile communications, travel, etc., you know?

¦ Do you know how much your company costs merchandising services for all customers in the segment of retail chains? And taking into account administrative expenses: taxes, UST and others; shares in the office lease; expenses for executive salaries, mobile communications, travel, etc., you know?

¦ How much does the merchandising service of each particular chain cost you? And one store of this network?

¦ How much time does a merchandiser spend on servicing one SKU? How much time does he spend on average per store? How much to move between them?

¦ How much does maintenance of one SKU cost for you?

¦ Do you have a developed merchandising concept for each network format? Does it take into account the position of competitors and your strategic goals for developing the brand and the distribution channel itself?

By answering various questions with specific numbers and phrases, you yourself will be able to understand whether you have organized merchandising or is it just some kind of support for your products, which has little to do with efficiency and, of course, does not improve your profitability.

I offer all the questions asked in the box to the participants of conferences, seminars and forums where the problems of working with retail chains are discussed. Only a few respond positively to at least some of them. What does it say? The fact that your company still has a lot of resources and “free money”, since you still don’t count them. But with the calculation of such indicators, the organization of an effective merchandising department begins.

A few words about the basics of the organization. I'll start with the main thing - the concept of merchandising - these are your goals and a description of the tools to achieve them in the field of product display. A Chinese proverb says: “If you don’t have a goal, you double your efforts.” And efforts are always resources: financial, temporary, human. Without defining the exact parameters of the goal, work turns into a run in circles, the company cannot determine the effectiveness of its work and the work of employees. In order not to waste the strength of the company, it is necessary to clearly prescribe the criteria for the result. In merchandising, these criteria are its concept and standards, designed and formulated for specific product and market conditions.

The concept of merchandising prescribes the desired place on the shelf, oriented in the space of the store, the places and location of the desired additional display, a description of the preferred neighborhood with others trademarks your group and other factors that should be the result of competent and intense work of the merchandising service. Without such a concept, the work of merchandisers almost does not make sense, since for them the bottom shelf is an acceptable result; it is impossible to check the work of employees - the products will still stand, the store employees will put them up somehow, but then it will also be sold somehow. Without availability goals, any actions and expenses become aimless, that is, your money will simply burn out!

Today, when managing merchandisers in a company, there are several main ways to control them and stimulate their activities. The issue of audit is quite complicated, especially if there were no clear answers to many questions about financial costs: it is difficult to control without knowing what you want to receive. In order to organize effective control, you need to answer all questions, and have a strong desire to get things done.

In my practice, there was a case when I "found" 12 merchandisers in my client's company. Before training for network managers, I ran diagnostics and interviewed them one at a time. In fact, I always conduct research in order to be able to adjust the training program to the tasks of the company. So, at the first interview, I asked the manager:

– How many merchandisers do you have under your control?

"Three," some thoughtfulness, "actually five," he answered me.

Well, I think it happens, then I talked with several more managers, each of whom was mistaken in the number of his merchandisers in the range of two to three people. I was greatly surprised by the manager of the METRO network, who made a mistake by six (!!!) employees.

When I asked how many times a week merchandisers come for a report, they answered me: “Twice a month.” I didn’t even ask what dates, I think you guessed it already - on the day of payment of salaries and advance payments. There was no concept of merchandising in this company, and, of course, there was no way to control their employees.

The question of verification of work is always technical. If you have calculated all the parameters that describe the work of this specialist - the schedule of the working day, the issuance of tasks for every hour - it will not be difficult to establish control, for this you can use both administrative and technical methods. Administrative - a system of reports, collection of checks and the organization of a special service of "checkers" who check the work of merchandisers directly in the store. The technical ones are presented from special programs for PDAs with the possibility of a photo report to services for determining the location of employees from cellular operators MegaFon and MTS.

As they say, there would be a desire, and you can always come up with ways to look after employees. I would like to note that control is needed not so much for the sake of control itself, but to increase work efficiency, and for this total surveillance is not at all necessary, it is too expensive, it takes a lot of time. The main task of a manager is to create the illusion of a thorough check, when everyone believes that management knows more about each employee, about his actions and inactions than he wants. This is usually more than enough, and it turns out to be quite effective.

Merchandising is not a service, it is a process, and like any process, no one needs it by itself. All he needs is a good result. Work on improving the quality of this activity constantly, every day, and success will not be long in coming.

How to avoid recruiting mistakes

Today, probably, more than ever in recent years, there is a shortage of personnel in Russia, especially for sellers, especially good ones. Companies spend huge amounts of money to find the right staff, to train them, but often remain dissatisfied with the results. At conferences on almost any sales topic, the question is: “Where do you get good salespeople?” With regard to the selection of managers to work with chain stores, such a question does not sound, he just screams about himself. And I would like to talk not so much about training, but about the organization of recruitment for work in the network department.

In my opinion, the personnel issue is decisive for the successful organization of the network department and its subsequent work. It is precisely in the mistakes made during the selection of this personnel that the mass of problems and difficulties that arise later during the work of these divisions with retail chains lies. Currently, there are often vacancies in the personnel search press for the position of network manager. With a good compensation package, this is often well over $2,000.

And always in the job description there is a condition that I mentioned earlier: “experience with networks is required, and personal connections are also desirable.” For the sake of experiment, my colleague and I visited several companies as applicants for this position; Everywhere the interview was surprisingly the same. Each time we were asked about the period of work with networks, they asked us to name the networks with which we cooperated - this is understandable and normal. But a successful seller is not determined by knowledge of the network or experience with it! Managers of bankrupt companies also know buyers and have a decent amount of experience working with them, they will apply all their experience in a new company, but do you need it?

Where the experience of working with retail chains comes from and where merchandisers go can be seen from a cursory analysis of Fig. 5.

Each company has one or two employees who conclude contracts, improve conditions with chain stores, that is, the main sellers that companies value and pay them a good salary, reaching 5-10 thousand USD. e. After the conclusion of an agreement with retail conglomerates, cooperation is usually carried out by network managers, whose functions include collecting orders and maintaining the network; their compensation package is 1.5–2 thousand USD. e. Then there are sales representatives who collect orders from stores, carry out layout and control the work of merchandisers, these are low-paid employees, their package is up to 1200 USD. Merchandisers go even lower, they are engaged in laying out, working with several networks, and their package is up to 1000 USD.

Many in this pyramid want to rise higher, and this desire is understandable. If we proceed from the requirements set by companies for applicants for the position of chain store managers, then each of this pyramid has the required qualities: they all know the network and have experience working with it. The only thing that most of them do not have is sales experience, negotiation skills. And that doesn't work in a week.

Rice. 5. Scheme of the department for working with retail networks

Very often, companies invite people to maintain and develop already signed contracts. This happens approximately as follows: first, some strong manager with extensive experience in concluding contracts is invited, for a certain period he “opens” several networks, then the rapidly increasing amount of work becomes beyond his strength, and a new employee is invited to less significant networks. Usually they are looking for him on the side, with experience working with this kind of clients. By the method already described above. Often these are former merchandisers of various levels or managers who were engaged in servicing already operating networks. As a result, the department is formed, but the quality of the staff leaves much to be desired. Indeed, sometimes it happens that in the unit there are almost no employees with good experience in sales and negotiations. What does it threaten? The fact that in negotiations with buyers, such sellers often lose, make concessions, accepting the conditions of networks. And this is fraught with a decrease in the profitability of the business. This is largely due to the fact that a “manager with experience”, who already knows well that networks are the dominant segment, squeezes out his management, and an experienced salesman - his customers.

As for having acquaintances with buyers, they do have some influence, but very often only on the length of time from the first call to the first meeting. If the manager knows the buyer, he will simply be able to arrange a meeting faster. In order for his relationship with him to affect the result of the work, he must be almost a relative of him, then, accordingly, the announcements should be of a slightly different kind: “... we take relatives of network buyers.” Today, many buyers are well trained and experienced enough not to mix personal relationships with work.

Therefore, you should not attach too much importance to the dating factor when hiring a new employee, the level of his connections is not always worth the money that he asks.

At one time I had an interesting opportunity to conduct a small experiment. When I was a sales director, two employees worked in the network department under my supervision, who were responsible for working with networks that were quite good at that time, bringing in a large volume of sales. Naturally, they took such a result solely to their credit, and this was partly the reason for the star disease, the guys refused to study, etc. Our company had a situation in which it was necessary to make changes in the composition of clients and redistribute the responsibility of managers, and these employees were left without much work for one month. Playing on their vanity, I suggested that they go to the retail department for this time to show all its employees how to work. To do this, they were "secretly" given the right to an additional discount. At that time, the average sales in the retail department were 450 thousand rubles. So, I gave them free territories, the whole package of documents, etc.

What do you think was the result?

The cumulative sales of both amounted to 78 thousand rubles for two. That is, less than 40 thousand per person, which was ten times less than the average figure for the department and 2 times less than the average sales to new customers per seller. After such a “chilling soul”, the stardust flew away and the guys began to study actively, because somehow they quickly realized their real possibilities.

I work a lot with companies from different sectors of the consumer goods industry, building the work of commercial services, and with good negotiators in network departments I encounter, unfortunately, very rarely. I don't want to say anything bad about these guys at all, but the lack of special training in conducting business conversations prevents them from making more money.

At the same time, every company has retail sales departments, but people are taken from there with extreme reluctance - they have no experience working with networks, no acquaintances. To learn the algorithm of the network client is a matter of several days, to understand the intricacies of interaction - a few weeks. It takes several months to learn how to sell.

The experience of negotiation does not come suddenly from reading a book or listening to training. Such knowledge is obtained through a huge amount of work done, through many mistakes and failures, in the process of daily repetition. Sales representatives working with retail outlets have such experience, they are a high-quality personnel reserve for filling the vacancies of a retail network manager. It is they, with their experience and their bumps, that are the golden resource that most companies working with networks, for some reason, ignore. Having gone through hundreds of business meetings, in the first, second and further circles, working within the framework narrowly outlined by management, having a minimum of tools for sales development, especially recently, when most companies have fallen under the influence of "network fever" and all resources are directed to development of networks, making all conceivable and unimaginable mistakes, they gain invaluable sales experience, which is necessary in any negotiations. The merchandisers, and even the managers involved in maintaining the networks with which the company works, are not so well suited for this work, despite the seeming absurdity of such a statement.

Summing up all of the above, I believe that when recruiting personnel to work with networks, more attention should be paid to the level of training in sales techniques and the ability to negotiate, rather than simply knowing the buyers of the networks.

Today, dropshipping is a method of direct deliveries, when an online store takes on the function of a seller, but all other manipulations with the goods - production, logistics, and others - remain with the supplier - is completely changing. All the problems behind dropshipping need to be addressed in 2015. How to become partners, learn how to control the sales process from both sides and meet the needs of the end customer - we will talk about this in the article.

Commerce Hub, a specialist in dropshipping relationships between seller and supplier, states: “The lack of integration between companies is a big problem in the dropshipping model. Record keeping and the ability to track orders become essential as thousands of orders pass through hundreds of suppliers!

This is not sending one order for a thousand items of the same line to just a few warehouses. Everything is much more complicated here.”

Merchants are struggling with the loss of control as they must now rely on their suppliers to ship products in a timely and professional manner.

If the supplier fails to fulfill the order properly, then it becomes a real nightmare for the seller's customer service! There are delayed orders, complicated return processes, problems with packaging and invoices.

And vendors have their challenges. Selecting, packaging and shipping an order to a retail customer is not the same as delivering goods to a retailer or distribution center in pallets or crates.

Dropshipping cooperation will require updating the warehouse, placing an order, complying with the billing system: a lot of different processes need to be controlled in order to deliver the goods. In addition, the supplier also bears the greatest risk that inventories will become worthless.

One of the biggest challenges that both vendors and vendors face is integration. Channel partners need to integrate their systems in order for dropshipping to become automated. And another stumbling block is the lack of a single standard that will help implement and support this integration.

To sum it up a little, we can say that the situation with dropshipping seems very difficult - it is almost impossible to implement. But there is one key that will make dropshipping a success and make it a great supply chain management method for online stores. And that key is relationships.

Relationships: From Business Relationships to Integrations

In dropshipping, you should replace the business discussion where the seller negotiated with the supplier to purchase goods at wholesale prices for resale with integration negotiations.

During such negotiations, both parties must become aware of the virtual part of the relationship and begin to work together. This will help allocate resources that will help manage business processes and meet new technology requirements. Such coordination requires consensual relationships.

This approach to negotiation is the only key that will ensure the success of dropshipping or guarantee that if it fails, everything will go smoothly and painlessly. The same expectations of the supplier and the seller are a necessary condition.

It is necessary to become partners, not sellers and buyers

Traditional relationships in the supply chain, as well as outdated business processes, do not fall within the framework of the new economic world. When a seller decides to enter into a dropshipping system or adopt a model where their inventory commitment is much lower, they must take into account several significant factors.

The first thing a seller needs to recognize is that dropshipping is not just another fulfillment model. As the financial formula changes, so do the relationships.

While the ability to not make actual purchases is a financial advantage for the seller, at the same time it limits the amount of leverage it has over the behavior of the supplier.

Moreover, in exchange for being able to sell more products through the retail channel, the supplier assumes all the financial risk without having high financial security.

In the dropshipping scheme, negotiations are more complex than in traditional relationships: a wholesale order of goods - a sale to a retail buyer. Since the seller will ask the supplier to spend time and money working with the buyer in exchange for a promise to make a profit, the supplier will resist additional technical requirements.

These factors make it difficult for vendors to manage supplier performance. Dropshipping is a strategy where everyone is a partner and there needs to be consistency.

Success factors

The process of identifying partners in dropshipping is different from the traditional method of order fulfillment. Since the seller has no obligation to make a purchase, he potentially has a greater choice of supplier partners.

However, in turn, this lack of financial incentive may affect the supplier's willingness to spend their time and money to meet the supplier's needs.

Finally, due to the distributive nature of dropshipping, some components of the electronic data exchange process may not be entirely voluntary for the supplier.

The following two main factors must be taken into account:

Logistics Capabilities

When choosing a supplier to operate a dropshipping online store, sellers must ensure that the supplier is able to handle single order fulfillment and that their ability to do this job matches the seller's needs, i.e. delivery times and rush delivery options.

The ability of a supplier to select one item from a warehouse or fulfillment center is a prerequisite for participating in dropshipping. Merchants can appreciate this ability if the supplier offers direct order fulfillment through their own online store website.

Many suppliers underestimate the costs that will inevitably come with the transition to a new order fulfillment model, be careful of those who promise to switch to a new system, but at your expense.

Technological options

Since both parties will invest time and resources into dropshipping, with neither party making any commitment to specific profit numbers, it is important to keep the number of technical excuses for opting out to a minimum.

It is necessary to create technologies that will help to exchange data with minimal or no cost. This will allow partners to be divided into those with very little technical capability and those with a developed and functional e-commerce infrastructure. The usual communication options are as follows:

• self-service portal. (Don't discount manual work. More advanced technology is attractive but not always practical.)
• non-integrated batch processing;
• automatic integration based on the file system;
• web services (API, XML), automatic options.

The main thing is the consumer

We want to please you. Among all the problems and challenges, there is one common element - this is the buyer. Over the past five years, many brands and suppliers have begun selling direct to customers. This equates the "supply" part of the formula with the "sales" part of the same formula, in that the customer experience drives everything.

Consumers need descriptive data about a product, they want a streamlined ordering process, and they demand logistics at the order level of a single item that can be tracked and returned.

In short, the world of sales has turned to the consumer, and this is leading to the development of new partnerships in the supply chain, and especially relationships between those who would like to be on one side or the other of the dropshipping model in order to succeed and prosper.

Sergey Ilyukha, a business consultant and specialist with up-to-date management and negotiation experience, gave a proven scenario for negotiations on introducing new products into the assortment, turning a losing deal into a profitable one.

Why do suppliers overpay networks?

I would conditionally divide all suppliers into three groups:

• Beginners. Such companies offer 5-15 items of "incomprehensible" goods, do not explain to the network why it needs it and want to get on the shelf at any cost (sometimes in the literal sense!)
• Experienced. Manufacturers that already work with the network are represented in several product categories, know the rules, know their economy, behave “with dignity, but not impudently”
• Monsters. Market or product category leaders with a strong bargaining position.

I will make a reservation right away. Any buyer will reasonably explain to you that there are no irreplaceable suppliers or goods. There are only suppliers that are difficult to replace. And there are networks that the supplier is not afraid to lose. This is where the monsters come in. Negotiations for an annual contract with them are difficult, the buyer has to make mutual concessions. Contract profitability is sometimes low. Therefore, working in the trading network, I always looked forward to the moment when the "monsters" will have new items.

The day when my old opponent appeared on the doorstep of the office with the words: “Hello, we have released a new product and would like to put it on the shelves of your supermarkets” promised me a quick solution to all current issues and a general improvement in cooperation conditions. Why is the manufacturer so defenseless at this moment?

• It comes with unknown goods
• It has no sales statistics
• He needs a decision to be made urgently
• A new product must be entered into the matrix
• He offers the goods at a time when all agreements have already been reached
• Bayer does not know about the product and is initially not interested in entering it into the matrix.

Due to these circumstances, regardless of whether this product is needed or not, I included the “I want nothing” manipulation. It was clear to me that, unlike negotiations for an annual contract, a manufacturer offering a novelty has no resource maneuver. It must either give the network something of real value. Or something to scare the buyer. Scare, as a rule, does not work, because the network operates under a contract. And the supplier has no choice but to “pay for entry” in one form or another.

How not to offer new products

To overcome the buyer's manipulations and convince him to introduce the goods into the assortment on mutually beneficial terms, the supplier must have weighty arguments. To begin with, let's look at the arguments with which the supplier usually comes to the network, offering a new product.

• Faith of the sales manager and his leaders in their product
• Discount on the price of a new product
• Additional premium or commodity credit (deferred payment) for a new product
• Manufacturer's New Product Launch Program
• Additional values.

There are no sales statistics. There are arguments from the field of marketing, branding, loyalty and enthusiasm. And these are quite controversial arguments when discussing economic issues. A fair price for a new product has not yet been formed. Arguments such as “This product costs 500 rubles. But you are a very important distribution channel for us, and we will give you the first batch for three hundred”, they work only in the oriental bazaar.

A large premium and a delay are beneficial to the retailer only with a high level of sales. With zero sales, the sum of the premium and the benefit from the additional delay will be zero. In addition, for foodstuffs, the amount of deferment and premium is severely limited by the Trade Act. And if a new product doesn't have sales potential, then a go-to-market program simply won't work.

But the goods must be put on the shelves! If it is important for a manufacturer's manager to promote a new product at any cost, he will give the network everything he had, if only he had nothing for it. I especially remember one example from my practice.

A regional manager of one of the leading importers of alcohol came to the negotiations and offered to introduce a new brandy of the premium segment into the assortment of our network, which was developed by the owner of the company himself. He put some bottles on the table and started the presentation. The presentation contained a standard set of arguments:

• Unique product
• beautiful bottle
• best factory
• Special price
• Additional delay
• Prize
• Promotion budget
• Promotion 2 + 1 for the first month.

It would seem that it does not get better! I did not carry out the standard manipulation "The shelf is not rubber." I saw the prospect of improving the contract as a whole. So I went the other way and asked:

How many bottles per month do you plan to sell?

Maybe two or three at each outlet, was the answer.

With such a level of sales, it is unprofitable to introduce your cognac into the assortment. Come when it becomes recognizable and in demand.

But we need to start selling as soon as possible...

The supplier spoke the language of his needs and wants. Common Mistake. Even before the start of negotiations, it was clear to me: the manufacturer needs cognac to get into our network at any cost. But the manager who represented the supplier did not have the authority to provide the conditions that would suit me. Therefore, the task of the first stage was to bring the negotiations to a higher level. To do this, I used a technique that I call the "false alternative" and offered the manager two options:

1) We can take cognac for sale, but it is very likely that they will not buy it. Therefore, in order to compensate for the losses, we will have to withdraw from the assortment four other low-liquid positions of your company and introduce an additional two positions from another manufacturer that show good sales.

2) I was interested in your new product, but our network has strict standards for profitability of sales and returns per shelf meter. If you take the commercial risks and guarantee the required rate of return by portfolio and category, I will try to resolve the issue quickly.

The first of the options I proposed was obviously unacceptable. Thus, I myself began to sell to the supplier the solution to his problem. The manager asked for time to think, and a week later a "high leader" came to me. Together with him, we began to look for ways to solve the problem (or rather, budgets), and very quickly we were able to agree.

• We introduced cognac into the assortment matrix, but removed two illiquid positions from it (we kept the number of manufacturer's SKUs on the shelf and did not put competitor's goods on it)
• We increased the network premium by a percentage for the entire portfolio of this manufacturer (compensated for a possible loss of profitability)
• We agreed to hold several promotions for top positions that are important to me (to guarantee profitability)
• We decided in favor of the network a number of controversial issues of cooperation (I went to meet the manufacturer)
• Cognac on our shelves became “golden” for the manufacturer, but everyone was satisfied!

How to talk to buyers

What should a manufacturer do to convince a buyer to take a new product and not harm its own economic interests?

• Pre-test sales. Come to the network with statistics, customer reviews and other retailers.
• Do not forget that the retailer does not need a "unique product", but a product that will allow him to earn. When presenting, it is necessary to talk not about the characteristics of the product, but about how it can be useful to the network, even better - about what problems it will help solve.
• Give the sales manager more authority, the ability to maneuver resources and benefits in order to create an attractive package offer for the retailer.
• Give the manager the right to introduce new items not to all stores, but only to those where they show the highest sales during the test period.
• Correctly negotiate with the buyer.
• When signing an annual contract, leave yourself an "ace in the hole" in such a case when new arguments may be needed to solve the problem.
• If the issue cannot be resolved immediately, be able to postpone the introduction of goods into the assortment until a new contract is agreed.

The cognac supply negotiations that I described could have gone very differently if I had heard something like this from the manager: “Our product showed high sales in test stores. Polls say that the buyer compares it with French cognacs, and the price is 30% lower. At the same time, you earn even more from the bottle. We guarantee that when placed in hypermarkets with the right product proximity, our cognac will ensure sales of at least X units per month. At the same time, he will not delay the sale of other goods, but will attract new customers.

• It is important to try to combine negotiations on the introduction of a new product with the moment when the buyer invites you to solve an issue that is important for the network.
• It is important to take the initiative, not to let the buyer switch roles with you. It is your product that will help the network earn a lot of money, and not the buyer will personally help you solve the problem of entering the network and not fly out of work.

If the moment is right, when discussing cognac deliveries, the manager could say to the buyer: “I understand that you have invited me to negotiate an unscheduled promotion. But my supervisors have made it very clear to me that until I get my product on the shelves, stocks are not even discussed. On the other hand, if we introduce the product into the assortment, you will receive additional income from the sale of this cognac in a week. And I guarantee you that after that I will quickly agree on the action.”

An additional argument in favor of the deal could be this: “We have been discussing with you for a long time the issue of switching to deliveries through a distribution center. I think the introduction of this cognac will solve it as quickly as possible. Or this argument: “Since last year, your network has left products that are not included in the new contract. It sells poorly and just takes up shelf space. If the problem of free shelf space is so critical, we can discuss buying the leftovers.”

If the supplier manager used these recommendations, the issue of introducing new products could be solved much easier. But there is no single solution. These recommendations do not work if the new product does not have sales potential, or if the supplier is new to the network and does not yet have voting rights. In addition, each network and each buyer needs an individual approach. You just need to be aware that the introduction of new products is actually the conclusion of a new contract for entering the network. And it is necessary to prepare for negotiations as carefully as for negotiations on a one-year contract.

Negotiations with suppliers are an integral part of the work of procurement specialists; The success of the procurement activity as a whole largely depends on the outcome of the negotiations. At the same time, studies aimed at identifying effective negotiation strategies in this area are very few. This article presents the results of a large-scale online survey that asked purchasing managers from 69 companies to evaluate the effectiveness of various negotiation techniques in the context of procurement.

Undoubtedly, the best-known negotiation guidelines were developed during the Harvard Negotiation Project, the results of which were first detailed in Roger Fisher, William Ury, and Bruce Patton's The Path to Agreement, or Negotiating Without Defeat. This book, published in 1981, is today considered one of the classic works on negotiation techniques. The main message of the Harvard researchers - "be firm when talking about the problem, but soft with people" - is reflected in the key recommendations formulated during the project. Researchers from Harvard conducted research in several areas, including game theory and psychology, and the results of their work formed the basis of our online survey.

Research on negotiation strategy within the framework of game theory is based on the assumption that the behavior of negotiators is strictly rational. Supporters of this theory, guided by the works of Nobel laureates John Nash and Thomas Schelling, have done a lot of research in the field of negotiation strategy. Taking into account the fact that this approach focuses on the problem of rational choice, one of the most important objects of the analysis of the negotiation process in the framework of game theory is the exchange of information between the participants in the negotiations.

Unlike analysts who proceed from the thesis of the rationality of behavior, scientists who consider negotiations from the standpoint of social psychology focus on psychological and behavioral factors.

Researchers belonging to this school study the following aspects: what style of negotiations people with a particular type of personality prefer and what are the typical psychological mistakes made by the parties before and during negotiations.

In addition, there is a structural theory of negotiations, as well as a theory that considers negotiations as a process. Within the framework of the structural theory, aspects related to the formation and use of the negotiating position are analyzed. Researchers working in this direction pay great attention to issues that relate to the best alternatives to the agreement under discussion, that is, the possibilities that are available to the participants in the negotiation process. It is these possibilities that form the space of decisions and determine the freedom of action of each of the parties. Negotiation as a process theory focuses on the role played by each individual stage of the negotiation (preparation, initiation, main rounds, conclusion, etc.) and what are the most important factors that determine the success or failure of each stage.

In the context of procurement management, none of these theories can be called the most or least significant. The outcome of any negotiation depends on the specific situation, so an integrated approach is required to develop an effective negotiation strategy and to successfully apply it. In other words, all aspects must be taken into account, since each of these aspects can, to one degree or another, influence the development of events in the negotiation process. You should not rely solely on any one theoretical model, since each of them has a certain value.

In our online survey, we asked our respondents, who were primarily purchasing managers, to rate 21 tips for successful negotiation from the point of view of purchasing professionals. The rating was given on a five-point scale, where one point characterized the recommendation as “extremely important” and five points as “not important”. Of the 21 recommendations, none were considered “not important”. At the same time, eight recommendations were rated “very important” or “extremely important” (see the “Strategy and Tactics for Successful Negotiations” sidebar for the eight most important recommendations, according to respondents, in descending order). All other recommendations were considered "important" with the exception of one - to underestimate the value of goods and services that are the subject of negotiations.

Recommendation 1 - do not allow negotiations to spill over into interpersonal conflict - can be considered the main setting. Based on the results of the survey, this recommendation, which directly reflects the results of the Harvard Negotiation Project, received the highest rating. It does not require any preparatory work to take advantage of, while the remaining seven recommendations, rated "very important" or "very important", require careful preparation for negotiations.

Thus, advance preparation can be singled out as a separate factor influencing the outcome of procurement negotiations. Before any serious negotiation begins, purchasing managers must ensure that employees have collected the basic information necessary to compile a comprehensive "negotiation dossier" that meets the most high requirements. Effective preparation for the negotiation process is the surest guarantee that procurement specialists will be able to achieve the highest possible results during negotiations.

Strategy and Tactics for Successful Negotiations

1. Do not allow disagreements on the subject of negotiations to escalate into personal attacks and conflicts.
2. When developing a basic negotiation strategy, always look for alternative suppliers and alternative opportunities.
3. Conduct thorough preparation - before sitting down at the negotiating table, you should soberly assess the interests and positions of the parties.
4. Use communication techniques wisely, such as open and closed questions, and active listening.
5. Try to facilitate discussion of contentious issues by using objective evaluation methods such as price comparisons and cost analysis.
6. Be prepared to offer and consider new, alternative solutions during negotiations to achieve better results.
7. Consider the personal characteristics of negotiating partners (degree of extraversion, informational preferences, sources of irritation).
8. In order to plan your actions in case negotiations reach an impasse, evaluate the best alternatives to the agreement under discussion that each side has before starting negotiations.

1. Organized planning of the content of negotiations.
2. Comprehensive analysis of the solution space.
3. Planning the strategy and tactics of negotiations from a psychological point of view.

Organized negotiation content planning

Recommendation 3, which was considered “very important” by the respondents, touches upon a key point in the preparation for negotiations: an assessment of the interests and positions of the parties. Starting to prepare for negotiations, managers and procurement specialists should identify the range of issues that are most significant for each participant. For example, a buyer may be primarily interested in price, quality, and reliability of supply, while a seller may be primarily interested in price, delivery time, and packaging requirements. It is important to weigh all aspects to determine where a compromise is possible and where not. Based on the results of the analysis and their assumptions, the buyer can understand which concessions the seller will make easily and which will have to be achieved with great effort.

According to recommendation 8, it is also useful to find out what options are available to each of the negotiators and which of these options the parties will be ready to use. To determine this allows the analysis of the best alternatives to the agreement under discussion, available to the parties. However, to do this, you must first obtain as much information as possible about the supplier and about his current position On the market. If the purchasing specialist does not have knowledge of the supplier's order book, it is almost impossible to determine the best alternatives to the agreement under discussion that the supplier has. To strengthen your negotiating position, you need to have many alternatives to an agreement in stock, and really good alternatives.

This is where recommendation 2 comes in: only those buyers who pay enough attention to finding alternative suppliers and identifying alternative opportunities can expect to conclude agreements that meet their interests. If the supplier suspects that the buyer has no real alternatives, he will insist to the last that all his requirements are met. As practice shows, suppliers tend to maintain close relationships with the buyer's specialists who work in the production and product development departments. As a result, the supplier is usually well aware of whether the buyer has real alternatives or whether the supplier has a monopoly.

Comprehensive decision space analysis

In addition to the organized planning of the content of the negotiations, preparation for the negotiation process includes the study of the space of decisions through analysis and hypotheses. The key elements in such studies are the criteria for decision-making, as well as the scope and boundaries of the decision space. As noted in recommendation 5, it is necessary to pre-determine success criteria based on measurable indicators, that is, develop criteria for assessing the results that each of the parties plans to achieve during the negotiations. For example, to determine the target price, the buyer can conduct a comparative price analysis and / or a comprehensive cost analysis - this will help to find out what should be the optimal price for a product supplied in certain volumes. Companies that have established efficient procurement practices typically employ cost planners to carefully assess supplier costs. These costs include the costs of producing the goods that will be purchased in the negotiations: these are the costs of developing the product and acquiring raw materials, as well as manufacturing costs. With knowledge of these costs, the buyer can negotiate a fair price. However, this becomes possible only if each of the parties is ready to openly discuss their costs as part of the negotiation process.

Along with the formulation of decision criteria, an important role in the assessment of the decision space is played by the definition of its boundaries. Following recommendation 6, it is useful to consider possible alternatives during negotiations. To avoid negotiation errors, procurement professionals must think ahead and evaluate alternative scenarios. As a rule, these scenarios also need to be discussed and agreed upon with other decision makers in the company. Typical alternative scenarios developed within purchasing management involve prepayment, direct compensation for some fixed costs (such as tooling and engineering costs), alternative logistics arrangements, and leasing options. It's always good to have these alternatives on hand. If there is a risk that negotiations on controversial issues (for example, on the issue of price) may reach an impasse, the negotiation process can be resumed by offering the partner alternative scenarios.

Planning the strategy and tactics of negotiations from a psychological point of view

Having clearly defined the content of future negotiations and having explored the decision space, procurement professionals can move on to the last critical stage of the preparatory process. At this stage, you need to figure out how and with whom you will have to negotiate. Relevant studies have shown that people with different personality types negotiate differently. In this regard, we should refer to recommendation 7, the essence of which is as follows: it is necessary to analyze in advance the personal characteristics of the negotiating partner and find out what style of negotiations he prefers. Some people can only be persuaded by logical arguments, while others are susceptible to emotional appeals, in particular arguments such as the duration and efficiency of business, as well as personal relationships between partners. Some immediately put on the brakes, as soon as they feel pressure from another negotiator, but it also happens that it is simply impossible to achieve serious concessions without pressure. Thus, it is important to determine what type your potential supplier belongs to. The more you know about your partner's personal characteristics, the higher your chances of success.

Closely related to recommendation 7, on personality analysis, is recommendation 4, which states that negotiation should use language and communication techniques wisely. This is especially important in procurement negotiations. Thus, the purchasing professional must carefully practice communication techniques such as active listening, questioning techniques, and persuasion techniques. In addition, it is necessary to carefully plan the application of these techniques in the context of specific negotiations. How, using listening techniques, can I show my partner that I am ready to listen carefully to his position? What should I ask the partner to find out what his goals are in these negotiations? What arguments will the partner find convincing and which of them will be stronger than his own arguments?