There is a lot of uncertainty in the world right now, which is likely to affect your business as well. A key moment to ensure your position is during negotiations. Financial benchmarking can help you gain the upper hand during negotiations, whether with retailers, suppliers or key customers. In this blog, we will show you how to best approach these negotiations.
If you understand the current status of all your suppliers, retailers or key customers and look at the trends in their performance, you will know exactly what deals you can make with them. This way, you can achieve the best results with your organization in the future.
Do you have a negotiation with a supplier planned any time soon? Beforehand, get insight into the performance of your biggest suppliers, track suppliers per procurement category and get the facts you need to improve your negotiation. This way, you can find out 1) which suppliers are most profitable, 2) what cost increase is justified, and 3) if there is a vulnerability in your supply chain.
The visual below, shows a clear overview of the performance of Ahold Delhaize compared to Royal FrieslandCampina and the industry average. Having these facts at hand will give you the right ammunition to get the most out of negotiations during a supplier meeting.
Negotiations with retailers
When preparing for a negotiation with your retailer it's important to first define the retailer's current status: How is the retailer performing? Are they growing? Are they generating good margins? And most importantly, how is this related to my situation?
Besides knowing their current status, it's important to look at trends in the retailer's performance. When there's an upward trend in the retailer's margins, you can capitalise on this, especially if the opposite is true for your own company.
On the other hand, when the margins are actually under more and more pressure, a clear insight into the margin levels of your buyer helps to understand what room there might be in terms of price negotiations. Do they make significantly more profit and are margins increasing? Having facts readily available not only helps with preparing a negotiation, but also to objective discussions. The overview below shows that Bonduelle is performing better than Tesco, which helps to determine the potential strategy from their side.
Key customers negotiations
Do you have an important negotiation ahead with a key customer? Make sure to check their performance first. Track your key customers on revenue and profitability and see how they are performing in comparison to your company and other key customers. Why is this important? Because it provides figures that show whether there's room for negotiation and it enables a constructive discussion about price agreements.
Prepare for negotiations with the Performance Monitor
It can be a lot of work to gather all these insights for your suppliers, retailers or key customers. The Performance Monitor makes this quite easy, as the financial figures of all will be shown in your own online dashboard. When you have a negotiation planned, simply login to the platform, get all the figures you need and be ready to handle the negotiation in the best way possible.
Want to know more? Schedule a demo with us and we are happy to show you the dashboard and all its features.