Imagine this: you’ve been working on a deal for several new CT scanners for almost two years. Radiology has evaluated options, doctors have a clear preference, and budgets have been approved. But it’s the final round of negotiation, and you’re still over budget. You know the price is too high (and you’ve got the benchmarking data to prove it!), but the rep insists “nothing more we can do.” Sound familiar?
A common tactic here is to try bluffing—acting like you might go with a different supplier if the rep won’t play ball. But if this is the first time in the process that you’re introducing an alternative, the gambit will likely backfire. It’s too late to change course completely, and the rep knows it. So, before you reach that point, try a different strategy to help avoid getting backed into a corner at the last minute.
Create credible competition early in the negotiation process. Creating competition is a proven way to get suppliers to either up their game or lower their price. But in a multi-year negotiation process, being ready with a competitive alternative takes careful planning, internal support, and tactical savvy. To maximize this strategy’s effectiveness, there are two key words to consider:
- Credible. Not only does your alternative need to offer a clinically viable solution that meets the needs of care providers, but it also needs to be one that the rep believes you would actually consider. It can be tempting to point to the cheapest alternative available, but that’s rarely a threat that a rep will take seriously.
- Early. No matter how credible your alternative is, waiting until the end of the negotiation process severely limits its power. Making it clear from the start that you’re considering more than one option (to both reps and internal stakeholders) helps establish leverage right away and set the tone for the entire negotiation.
But what if there simply isn’t a credible alternative? Don’t worry—there are other ways to create competition and get the results you need. Check out next month’s tip to find out how!