We are going through difficult economic times with record inflation rates and, especially in Europe, unprecedented volatility in the energy markets.
Suppliers and customers, sales managers, and procurement professionals alike feel the burden to navigate the current episode of VUCA world (volatile, uncertain, complex, ambiguous).
The sales function on the supplier’s side and the procurement function on the customer’s side have the challenging task to agree on the right price for the products or services that are being exchanged. Both are tasked to protect their company’s margins, cash flow and at times fight for survival.
As for any negotiation, one needs to balance short-term needs with long-term goals. When times are tough, the risks are high that previously healthy business relationships fall apart in negotiations that quickly turn adversarial.
To avoid this and protect the relationship to drift into “lose-lose”, preparation is key, especially for the sales manager that comes most likely with a significant price increase.
Below we have listed some questions and arguments the professional buyer on the customer’s side would and should raise when approached by their supplier with a price increase. We focused here on a scenario of higher energy prices that have affected the supplier’s production cost and hence stipulated a price increase for their products (click to download).
Share your experiences with us as a buyer or sales manager. What do you want to hear from your supplier when they come with a price increase? As a supplier, what are the questions your procurement counterpart is keen to understand? How do you respond best?
Let’s build bridges between #procurement and #sales – together.
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