Negotiation

Using “4 C” negotiation strategies

Published By
Jeremy Ferrer
Tags
Purchasing profession

The 4 C negotiation strategy is an approach that aims to create a solid and lasting customer relationship while maximizing the results of a commercial negotiation. This method is based on four essential pillars to conduct an effective negotiation: Contact, Know, Convince, Conclude.

negotiation strategies

Negotiation Strategy 4 C: Contact, Know, Convince, Close for Buyer Success

The 4 C negotiation strategy makes it possible to structure and conduct a negotiation effectively by taking into account the interests of all parties. By adopting this approach, negotiators can improve their negotiation skills, succeed in negotiations, and develop relationships to ensure the commercial development of their business.

The final price of your purchase will depend on your negotiating skills: either your target price, or the price chosen by the supplier, or a price between the two.

In the buying process, negotiating purchases in advance is important. It can appear as a set of possibilities seen through the lens of four different strategies. So you can avoid paying more than you should. The “4C” trading strategies and the order in which you should use them are:

  1. Constraint

In purchasing negotiations, the “constraint” strategy is the stage where you insist that the supplier fully accepts your conditions.

You present yourself as someone for whom “No” is not an answer. In most cases, when a supplier is trying to convince you to pay more, your first approach should be to stick to your price without compromise. Don't move on to the next strategy too soon!

  1. Collaboration

If you push back on your supplier's initial attempts to convince you to pay a higher price, if your supplier doesn't agree to give you your price, and if your experience dictates that it's unrealistic to force the supplier to accept the price of your choice, then the next step of Negotiating purchases is collaboration.

Ask your supplier for some ideas on how they can satisfy you with your price through other non-tariff arrangements. In sensitive or strategic situations, or in established relationships, you can start with the “collaboration” strategy.

  1. Compromise

If after using the “collaboration” strategy you still think you are able to get discounts on the price offered by the supplier, you can opt for compromise.

In procurement negotiations, the “compromise” strategy is based on a small sacrifice by each party in order to reach an agreement. For example, if your target price was €10,000, and if your supplier's initial price was €11,000 and if thanks to the first two strategies your supplier has already reduced their price to €10,500, you can say “Let's find a compromise and cut the pear in half between your price (€10,500) and my price (€10,000), which gives us a price of €10,250”. This is still a small saving, but applying this step allows you to make big savings in the long term.

  1. Conclude

If the first three strategies for negotiating purchases did not position you exactly where you wanted to go, if the supplier only gives you two options: “accept the price” or “let it go” and if your experience dictates that the supplier is not bluffing, then capitulation is the last solution. That's when you accept the supplier's latest offer. In some cases, capitulation could mean that you failed in your negotiation. However, if you obtained concessions using the three previous negotiation strategies, it could also mean that you pushed the supplier to the limit and obtained the best value for money for your organization.

Mastery of Negotiation 4 C: Sales Techniques, Creativity and Communication

Good negotiators know how to use different sales techniques to offer innovative solutions and highlight the benefits of their offer. They need to be able to rephrase their arguments and present attractive counterparties to convince the buyer. Creativity makes it possible to think outside the box and to bring added value to the commercial proposal. Finally, communication plays a central role in the 4C negotiation strategy.

Negotiators need to master verbal and non-verbal communication techniques to effectively deliver their message and positively influence the other party. They should use relevant questioning to obtain important information and deal with objections in a skilful manner. Communication is also essential to maintain a solid customer relationship after the sale is completed, thus promoting loyalty.

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