How To Get The Most Out Of Supplier Negotiations: Four Tips From A Pro

by Richard D’Ambrosio

This article was originally posted at Travel Market Report. View Original

Travel agents rely on their suppliers so much that sometimes pressing for discounts and perks for clients can feel uncomfortable. Negotiations can be tense, and when emotions get in the way reaching a positive outcome is difficult.

Travel Market Report asked Michelle (Mick) Lee, founder of Women In Travel (WINiT), how agents can smooth out negotiations. Lee has been in the travel and hospitality industries for over 20 years as both a buyer and supplier. She is managing director of ARROW212, a hospitality project execution practice, and founder of WINiT, a womens’ leadership nonprofit.

Don’t take it personally.
Before anything, take your emotions out of negotiations and don’t read anything into the reaction you see in others. No one knows what someone else is thinking, so always assume positive intent, have an open conversation and move on.

If there is obvious malice, disrespect, or an inappropriate remark, address it head-on, in a non-emotional manner, and make it clear what won’t be tolerated. If it continues, have that person replaced and proceed with the negotiations.

Treat suppliers like clients.
Invest in supplier relationships in the same way you do client relationships, and shift your mindset to view suppliers as partners rather than service providers.

Follow the “3-for-3-for-3” rule; three levels of engagement that you tap into every three months, including the top three executives at the company––your account manager, their boss and their boss’s boss. Learn about what is important to them, and stay in regular contact with senior executives to show that you are paying attention to their company, the issues they are facing and the trends.

Avoid surprises.
In the spirit of treating suppliers as partners, make your expectations and plans known in advance. If a supplier does reject your terms, remember they likely have a good business reason.

Hold your line.
Don’t be intimidated if a supplier seems to have more leverage in a negotiation than you do. For example, Lee said, when an independent hotel next door to her office raised its rates by 20%, she activated her 3-for-3-for-3 strategy and brought everyone in on the discussion long before the negotiations started. “We made it clear that the gap needed to close or we would be forced to move our business. This was communicated at all levels in the hotel, to my six contacts, and well in advance of the negotiation.” When they failed to rescind the rate hike, she took her business elsewhere – and six months later the hotel called her back.

Don’t be afraid to walk away.

There are very few instances when walking away is the only option, but when the time is right, be very clear and open about what is nonnegotiable. Do not bluff – make sure you have teeth behind it if you have to act.