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Introduction – why did I write this book?

I went for years not finishing anything. Because, of course, when you finish something you can be judged.

– Erica Jong

The first step is always the hardest and yet the planning of this book has been very easy for me.  I wanted to take all my knowledge, experience and learning from the past 35 years and put it all down into a book. If I can help just one person avoid some of the stress and distress I have experienced and instead enjoy the sheer joy that comes of a successful food business then my work is done. Seeing your products on the shelves and indeed flying off the shelves is an amazing experience.

But as the quote above says, when you finish something you can be judged and nothing is more transparent than an Amazon review so it has taken me a while to get started and what qualifies me to write this book? Well, apart from a degree in management science where I studied retail marketing, not much academically - but absolute spade loads in terms of experience.  So what’s my story?

The early years – my introduction to retail

I was born in the autumn of 1965 to a retailing family.  My father was the manager of a department store, Camp Hopson in Newbury, which was then a sleepy market town and the department store was the centre of the retail high street.

My mother is an artist and used to do drawings for the Christmas advertising campaigns.  Every year we would get loads of beautiful things come home for my mother to draw – toiletries collections which smelt beautiful, exotic perfume bottles in cut crystal glass, colourful silk scarves and butter soft leather gloves in exquisite packaging.  It created a longing and a love for me for lovely things – we did not have much money but every Christmas one of these beautiful things would make its way into my Christmas present pile- I still have a pomander that my father bought me on my window sill at home. So my first encounter with retail was how her beautiful pictures would create a desire in people to come to the store and buy their Christmas presents for loved ones.

As I got older, I continued my career in retail, taking my first Saturday job in the store – yes nepotism was alive and kicking -  working in the childrenswear department.  I learnt to fold jumpers with a precision which has stayed with me and an eye for all hangers facing the same way – who was it who said retail is detail – (it was actually James Gulliver who ran Safeway and Finefare).  I also learnt the other bedrock of retailing that hasn’t really changed just evolved – the customer is always right.  Newbury was populated with some lovely monied old ladies who were shareholders of Camp Hopson and would come in with their bold posh voices stating their position and I was expected to be charming and accomodating – a useful skill in my later life dealing with the grocers!

I continued to work for my father through the summers of my university – taking only one summer off to work at Cranfield writing them a marketing strategy for how to find customers for their hydraulic research – goodness knows what a 19 year old student knew on that subject but by the end of the summer I had written a paper on the subject which I still have somewhere – I remember sitting in my office for a whole morning trying to summon the courage to say my name over the telephone – I ended up doing a dry run with my boyfriend of the time – a forerunner of the role playing techniques, that are so useful when preparing for negotiating (see Chapter 9).

My first encounter with Tesco – when they were still no 2

I went to university in Manchester and began a course of Mathematics and management science. By the end of the first year, my tutor said I would need to spend all summer studying and working on the mathematics if I were to gain a decent degree.  I thought about this for a while and took the path of least resistance and gave up the maths.  This may not be a good morale for a book of this kind but it does underpin one of my fundamental beliefs of man management – focus on the positives not the negatives.  I graduated with a respectable degree and took one of two jobs offered to me (the other was an accountant….maybe not!) as a marketing graduate with Tesco working in Terry Leahy’s team.  My first boss, Mike Coupe, (currently CEO of Sainsburys) who had just arrived from Unilever as a fresh faced marketer, looking after eggs, meat, fish and poultry.  Well it was an interesting couple of years – I had many great experiences - flew in my first airplane to Scotland to visit a fish factory – yes the shiny faced assistant buyer of 21 who thought she knew everything and spent my 21st birthday in Malton bacon factory at my first abattoir trying not to cry as the pigs were being slaughtered.

But being ambitious and wanting to do “proper” marketing, I left after two years and went to start a career with Boots that lasted 14 years.  I began as assistant brand manager and thought I had died and gone to heaven, leaving behind the 4am starts in Grimsby fish market and moving to work with advertising and pr agencies who took me to long lunches in very expensive restaurants.  Money was no object in the late 80s and we spent a week at Brands Hatch shooting a video of all the brand team driving formula 1 cars for the sales conference.  It was fun and I learnt a lot about marketing but I missed the breadth of my retail ranges – I did not enjoy just working on one product – only so much you can do with a meal replacement (as product manager for Complan) so I returned to my roots of retailing never to return to pure brand management.

I spent many happy years as a food buyer – mostly buying vitamins where my passion for nutrition and healthy eating began.  I learnt lots of negotiation techniques for shaking money out of the money tree of suppliers which would not be considered acceptable now but I did well driving margins up and getting substantial contributions to marketing and promotional funds.  I had some great suppliers who were good to me and we launched some fantastic products. My boss said I was the best buyer she had ever had – and we did exceptionally well.  She became my first real mentor and I learnt many things from her about being tough, creative and building the right team around me.  She lead me from buying to selling and we worked together in Boots Contract Manufacturing where I sat on the other side of the table both as an account manager and then head of new product development for dental.  I learnt a lot in those roles about people management, product development strategy and retailer strategy.  How do you develop market leading products for more than one customer?  More of that later

Moving into food – real food that is!!

After 14 years with Boots, I knew I would either stay there until retirement or take the lovely redundancy money and follow my dreams of working in the food industry.  My husband at the time thought I was mad – leaving a secure job with good pension for it was in those days – for nothing – I had no job to go to but with a pot of cash I decided it would be just fine and with rash enthusiasm and two young children, I jumped ship.  Part of the redundancy deal was an outplacement package which was absolutely fantastic – I learnt so much about how to look for a job, CV writing skills, interview techniques – have held me in good stead throughout my life.

I began a sales career, first in fizzy pop, and then moving finally into real food – ready meals, salads, Christmas puddings and turkeys – my emphasis was largely on own label which allowed me to develop my love of new product development.  And indulge my love of food by being paid to go to Michelin star restaurants!  I discovered I was good at developing new products and winning new business through strong category strategies. However I also faced the black art of retailers negotiation techniques.  Arranging meetings at 4pm on a Friday and then walking out after 5 minutes, threatening to complain to my boss and have me sacked and very sadly watching a business that had risen literally from the ashes go into administration because I couldn’t get our customers to agree an inflationary price rise which clearly they did agree to with their new supplier as the retail prices increased overnight once they transferred the business after our demise.  I had a lot to learn and learn I did!

The lightbulb moment!!

It was immensely difficult and stressful times and I was ready to throw in the towel but being a single mother with two young children to support, I persevered and was lucky enough to meet a man called David Sables who runs Sentinel Management.  I went on one of their negotiation courses and I saw the light.  He uses ex buyers from the UK grocery retailer base and all the things I thought might be true about how the buyers used psychological techniques to constantly undermine the account manager were true.  Tales of how the buyer would complain about an account manager and have them sacked because “they weren’t doing a good job” when in fact they were doing such a great job they wanted them replaced with a less aggressive weaker version!  And the point of this – were they all psychopaths? – of course not – it was to shake the money tree.  And sure enough the suppliers (and these were big branded houses) would hand over cash – in many different forms – promotional support, margin improvements etc etc

Well for me that was the “light bulb” moment that people talk about – I learnt the techniques on that course some of which I still use today and reference in this book.  I took all that learning to my final “proper” job – commercial director at Ichiban an own label sushi manufacturer.  There I pushed through inflationary increases, developed some amazing products, grew the category and built a strong and powerful team. I will reference that a lot in the book as I am proud of the work we have done there. 

Now

After my children left to go to university, I decided it was my time for freedom and so relocated to the south of France.  I set up my website www.foodmentor.co.uk and my new business was borne, mentoring food manufacturers. I decided to take all my learnings and experiences in food and retailing and bring them together in a book to help other food businesses to build their powerbase, to enable them to work with retailers and grow lean and nimble businesses that can adapt to the changing retail landscape.

As well as my mentoring work, Now I deliver training for Nottingham Trent university and sometimes still do hands on work for clients.  I love the variety of what I do and the opportunity to make a difference to enable people to take charge of their food business and to find they love what they do.

Chapter 9 Negotiation master class

“Let us never negotiate out of fear. But let us never fear to negotiate.” – John F. Kennedy

Once you have your products and category proposal, you are well prepared to enter the negotiation phase with a retailer.  There are many books written on the art of negotiation and I have tried to distil them down to some simple principles:

1. Understand your current retailer relationships – if you have one

2. Prepare for the meeting

3. How to run the meeting and negotiate the best deal

4. What can go wrong and how to cope

There are a few key elements to get to grips with when working on negotiation skills

1. Understand the type of retailer relationship – in chapter 2, we touched on the three main types of relationship that you may come across in your dealings with retailer customers

o   Bronze – which it is very transactional mostly based on price – eg a tender process and timescale likely to be 1 year or less

o   Silver – where you are working more closely with a retailer, building a category plan for them and working on other elements such as NPD, promotional and other marketing plans to build footfall.  The timescale is likely to be 18 months to 3 years

o   Gold – where you are in a collaborative, potentially interdependent relationship based on 3-5 years at least – may even involve building a factory together and exclusive arrangements to ensure the supply chain is maintained

Each relationship type will need a different approach although the desire in most cases would be to move it upto Gold if that fits with your strategic requirements.  With a bronze customer, there may be no point investing in customer research and data, if you are merely negotiating a price to supply a product for a year.  However, if you are trying to move a retailer onto being a silver level then you may need to approach it like a silver!  And ditto for Gold – as a brand you may not want or need to have such a close collaborative relationship choosing to be more mass market or as an own label supplier, you may find that is the only way to grow by co investing in factories, resources etc.

2. The key elements of preparation – “Fail to prepare, prepare to fail” is an old adage taught to me by an old commercial director and coupled with “retail is detail”, it is key to know your business and theirs.  So some top tips are:

- Know your customer – I have a google alert set up for my clients’ customers – so that every morning at 7am, in comes detailed coverage of who said what about Tesco yesterday in the media.  This has proved invaluable over the years as it has enabled me to know what is going on with customer complaints, shares and local/national news.

-        Know your industry – I subscribe to Grocer magazine, food manufacturer and a couple of other update newletters – I also get the food standards recall notices so I know if there are any issues in the market place

-        Know the market place – it’s school boy basics but make sure you have visited a few of your retailers stores before you go to a meeting, especially if they have any flagship stores, recent refurbs etc.  Take a day a month to go to all the retailers and see what is going on.  Speak to shopfloor workers and create relationship with your local store manager – they are always well informed and can give you great background info.

-        Know YOUR business – I have done a lot of interim work and always build a factbook when I start a new role and update with additional info if there is a specific meeting coming up. The list is probably endless but try these for starters

o   Your sales in the retailer, their % of your business, trends

o   Their and your profit margins

o   Complete product list – rsps, msps and margins

o   Volumes and potential additional capacity/MOQs

o   Shelf life – actual and potential

o   Distribution network

o   Market share/brand share

o   Target customer

o   Costs and breakdown – I have worked with several companies who have not truly understood their cost structure.  This makes negotiation impossible especially if you are working on an own label price increase negotiation.  I was working with a client recently and we had 10 iterations of the cost for one product – no it hadn’t been amended, no recipe rework just we didn’t have an agreed way of costing it.  This made talking to the retail customer very difficult especially as we had an open book costing model.

o   Raw material price movements and future challenges

o   Their challenges – I always say to new NAMs or people beginning to work with the retailers is that one of their jobs is to help get the buyer promoted ie make them look good – to do this you need to know what their targets and KPIs are and then how you can help them achieve these through the successful growth of their category value and profitability through using your brand/own label etc

Preparation for retailer meetings

Not all retailer meetings are negotiations but most will have a negotiating element about them –eg they could be:

-        General business updates/joint business planning

-        New product listings

-        Category reviews

-        Price increases

It is critical to plan for each meeting and I have used the following proforma over the years to enable clients to look at the key elements of the meeting.

So lets go through the meeting planning proforma – step by step

1. Setting the scene

·       Purpose: What is the goal of the meeting – ie what are your objectives and what is the customer’s and is there likely to be any conflict.  This is not about conflict in the meeting necessarily but conflict about meeting agenda.  I have gone to meetings wanting to talk about putting through inflation but have had it as maybe a 4th agenda point and had it removed  by the buyer – either due to no time or on one occasion I was told that as it was not on the agenda, she was not going to discuss it! Well run meetings identify the purpose before you go in and you share the agenda to ensure there is enough time, the right people and right information to have a productive and successful conversation

2. Why will we be successful?

This splits into two – Firstly, what are our power sources ie what makes the company great in general and therefore where are our areas of strength.  Secondly what makes us great at this specific meeting.  You then need to focus on all the elements you have in your tool box - such as what is available on the table to discuss, your areas of strength and the buyers corresponding areas of weakness.  Traditional negotiation courses teach that you should find things that are valuable to you but cheap for the buyer to give away and trade them for the reverse.  Sadly these days the buyers are way more savvy and know exactly what is and isn’t of value to you.  But always worth pressure testing!

3. Roles and responsibilities

It is important for everyone to know their roles, premeeting.  Ideally you have a timekeeper, chairperson and notetaker.  Clearly if you are the only person in the meeting then you get to cover all roles.  But it is really great to have maybe an account manager leading the discussion and the sales director keeping an eye on the time and ensuring she moves into the conversation if it is moving off track and acting as the chair.  Minutes of the meeting are so important – I always write copious notes – and write them up afterwards and ensure they are issued out within 48 hours to attendees

You also need to think about who will be there from the retailer side and what’s their purpose, interests, status, and ambitions. If the meeting is the first one you have had with a buyer – look them up on Linked in, google them, find out as much as you can.  Try always to ask people who turn up to the meeting that you don’t know what their role is and get their name – nothing worse that writing up the contact report only to find you do not have half the peoples names!!

4. Prepare to take control

When beginning a complex meeting you ideally need to ensure you are in control of that meeting.  However,  the buyer has also been trained in taking control and may have some fun in achieving this.  There are physical elements which to be fair I have not seen for years - such as sitting supplier with the sun in his eyes, sitting on a higher chair so you are below them etc etc but if you find yourself feeling uncomfortable, it may be a tactic and you may want to take control back by asking to move. Another great control tactic which I have had used time and time again is being kept waiting for a long time and then being told the buyer has only half an hour.  I suspect a lot of the time this is due to poor time keeping of her previous meetings but it is very frustrating and throw all your good preparation off kilter. Preempt this by always assuming the meeting will be half the time given – if you finish early then that will be a bonus as all buyers are short of time.

Being in control of the meeting, involves thinking through what the buyer may say and what your response is going to be – sometimes a question or scenario will come from left field and if this is the case then you will have so much preparation that you should be able to answer on the hoof.  OR say I will come back to you – never make it up – I have seen account managers tie themselves in knots answering questions on numbers that they don’t know and then unravelling later in the presentation as the made up numbers don’t stack up.  But as we know fail to prepare, prepare to fail!!

5. Plan the time

Always plan for a meeting to last about half what is in the diary – so if it is an hour – pull together enough material etc for half.  After all everyone will think it’s a bonus if you finish early! If you doing a presentation, prepare a powerpoint presentation as a disciplined approach to getting the job of prework done but don’t always use it in the actual meeting –just have it there as your own little fact book. No buyer likes a 60 minute, 50 slide presentation telling them what they probably already know!!  Think of the sequence of events that will produce the goal you are looking for out of the meeting and establish a timeplan in your own mind – make sure you get to the key important stuff which is always the last couple of slides before she is beginning to gather her stuff!!

Once such example was when Tesco were doing their supplier rationalisation project – they gave all an allocation of time and we had heard from other presentations that if you did not finish on time then they would just walk out.  So my team and I practised and practised and had time markers throughout.  Suffice to say that they started 15 minutes late and we had to do a juggle but because we were so well organised, it ran perfectly to schedule -  and yes we retained our supplier status!

So how do you plan the meeting – most meetings have a degree of selling ie describing the features and benefits of your proposal and a degree of negotiation ie in its simplest form – if you…then I

So the idea of the specific proposal is that you have told the buyer how you can help solve their problem and why your idea is so compelling.  The specific proposal is a concise, if you do this (eg list my product) then you will achieve this (category growth, better profits, sales uplift, be loved by your boss!!) type of one pager.  Be structured and direct – it is a commercial benefit to them you are selling not the benefits of your product.  Also don’t be vague or offer signs of weakness!!  I am particularly guilty of using soft signal and vague language – “so I think we could offer you around 30% margin” – says to buyer either you don’t know your numbers OR more excitingly you have much more to give then 30%!  Other examples of soft signals are:

“We normally charge….…..”

“ We were hoping for….”

“My ideal is ……..”

“My opening offer is …….”

“our list price is ……..”

“I would be happy with…..”

“ The price is around….”

“….between £30 to £50 per unit”

“Can you do it for …….?”

“Would you do it for……?”

There are 10 rules of making a successful specific proposal

·       Concise and specific language

·       Specific variables and values

·       Maximum 30 seconds

·       If you .. Then you will make

·       No soft signals

·       Don’t sell it

·       Commercial benefit to them

·       Planned with Ambition

·       Delivered with confidence

·       Then pause………

To enable you to make this proposal, you need to decide your negotiation strategy – Start by target setting – traditionally you may have worked with your target, ideal and settle for but this structure builds in a walk away number which is before the no deal.  This is a very powerful technique as it enables you to walk away take a breather rather than negotiate down to the bare minimum.

Chapter 9 Negotiation master class
“Let us never negotiate out of fear. But let us never fear to negotiate.” – John F. Kennedy

Once you have your products and category proposal, you are well prepared to enter the negotiation phase with a retailer.  There are many books written on the art of negotiation and I have tried to distil them down to some simple principles:
1. Understand your current retailer relationships – if you have one
2. Prepare for the meeting
3. How to run the meeting and negotiate the best deal
4. What can go wrong and how to cope
There are a few key elements to get to grips with when working on negotiation skills
1. Understand the type of retailer relationship – in chapter 2, we touched on the three main types of relationship that you may come across in your dealings with retailer customers 
o Bronze – which it is very transactional mostly based on price – eg a tender process and timescale likely to be 1 year or less
o Silver – where you are working more closely with a retailer, building a category plan for them and working on other elements such as NPD, promotional and other marketing plans to build footfall.  The timescale is likely to be 18 months to 3 years
o Gold – where you are in a collaborative, potentially interdependent relationship based on 3-5 years at least – may even involve building a factory together and exclusive arrangements to ensure the supply chain is maintained
Each relationship type will need a different approach although the desire in most cases would be to move it upto Gold if that fits with your strategic requirements.  With a bronze customer, there may be no point investing in customer research and data, if you are merely negotiating a price to supply a product for a year.  However, if you are trying to move a retailer onto being a silver level then you may need to approach it like a silver!  And ditto for Gold – as a brand you may not want or need to have such a close collaborative relationship choosing to be more mass market or as an own label supplier, you may find that is the only way to grow by co investing in factories, resources etc.
2. The key elements of preparation – “Fail to prepare, prepare to fail” is an old adage taught to me by an old commercial director and coupled with “retail is detail”, it is key to know your business and theirs.  So some top tips are:
- Know your customer – I have a google alert set up for my clients’ customers – so that every morning at 7am, in comes detailed coverage of who said what about Tesco yesterday in the media.  This has proved invaluable over the years as it has enabled me to know what is going on with customer complaints, shares and local/national news. 
- Know your industry – I subscribe to Grocer magazine, food manufacturer and a couple of other update newletters – I also get the food standards recall notices so I know if there are any issues in the market place 
- Know the market place – it’s school boy basics but make sure you have visited a few of your retailers stores before you go to a meeting, especially if they have any flagship stores, recent refurbs etc.  Take a day a month to go to all the retailers and see what is going on.  Speak to shopfloor workers and create relationship with your local store manager – they are always well informed and can give you great background info.
- Know YOUR business – I have done a lot of interim work and always build a factbook when I start a new role and update with additional info if there is a specific meeting coming up. The list is probably endless but try these for starters
o Your sales in the retailer, their % of your business, trends 
o Their and your profit margins
o Complete product list – rsps, msps and margins
o Volumes and potential additional capacity/MOQs
o Shelf life – actual and potential
o Distribution network 
o Market share/brand share 
o Target customer 
o Costs and breakdown – I have worked with several companies who have not truly understood their cost structure.  This makes negotiation impossible especially if you are working on an own label price increase negotiation.  I was working with a client recently and we had 10 iterations of the cost for one product – no it hadn’t been amended, no recipe rework just we didn’t have an agreed way of costing it.  This made talking to the retail customer very difficult especially as we had an open book costing model.
o Raw material price movements and future challenges
o Their challenges – I always say to new NAMs or people beginning to work with the retailers is that one of their jobs is to help get the buyer promoted ie make them look good – to do this you need to know what their targets and KPIs are and then how you can help them achieve these through the successful growth of their category value and profitability through using your brand/own label etc
Preparation for retailer meetings 
Not all retailer meetings are negotiations but most will have a negotiating element about them –eg they could be:
- General business updates/joint business planning
- New product listings 
- Category reviews 
- Price increases 
It is critical to plan for each meeting and I have used the following proforma over the years to enable clients to look at the key elements of the meeting.

So lets go through the meeting planning proforma – step by step
1. Setting the scene
• Purpose: What is the goal of the meeting – ie what are your objectives and what is the customer’s and is there likely to be any conflict.  This is not about conflict in the meeting necessarily but conflict about meeting agenda.  I have gone to meetings wanting to talk about putting through inflation but have had it as maybe a 4th agenda point and had it removed  by the buyer – either due to no time or on one occasion I was told that as it was not on the agenda, she was not going to discuss it! Well run meetings identify the purpose before you go in and you share the agenda to ensure there is enough time, the right people and right information to have a productive and successful conversation
2. Why will we be successful?
This splits into two – Firstly, what are our power sources ie what makes the company great in general and therefore where are our areas of strength.  Secondly what makes us great at this specific meeting.  You then need to focus on all the elements you have in your tool box - such as what is available on the table to discuss, your areas of strength and the buyers corresponding areas of weakness.  Traditional negotiation courses teach that you should find things that are valuable to you but cheap for the buyer to give away and trade them for the reverse.  Sadly these days the buyers are way more savvy and know exactly what is and isn’t of value to you.  But always worth pressure testing!
3. Roles and responsibilities
It is important for everyone to know their roles, premeeting.  Ideally you have a timekeeper, chairperson and notetaker.  Clearly if you are the only person in the meeting then you get to cover all roles.  But it is really great to have maybe an account manager leading the discussion and the sales director keeping an eye on the time and ensuring she moves into the conversation if it is moving off track and acting as the chair.  Minutes of the meeting are so important – I always write copious notes – and write them up afterwards and ensure they are issued out within 48 hours to attendees
You also need to think about who will be there from the retailer side and what’s their purpose, interests, status, and ambitions. If the meeting is the first one you have had with a buyer – look them up on Linked in, google them, find out as much as you can.  Try always to ask people who turn up to the meeting that you don’t know what their role is and get their name – nothing worse that writing up the contact report only to find you do not have half the peoples names!! 
4. Prepare to take control 
When beginning a complex meeting you ideally need to ensure you are in control of that meeting.  However,  the buyer has also been trained in taking control and may have some fun in achieving this.  There are physical elements which to be fair I have not seen for years - such as sitting supplier with the sun in his eyes, sitting on a higher chair so you are below them etc etc but if you find yourself feeling uncomfortable, it may be a tactic and you may want to take control back by asking to move. Another great control tactic which I have had used time and time again is being kept waiting for a long time and then being told the buyer has only half an hour.  I suspect a lot of the time this is due to poor time keeping of her previous meetings but it is very frustrating and throw all your good preparation off kilter. Preempt this by always assuming the meeting will be half the time given – if you finish early then that will be a bonus as all buyers are short of time.
Being in control of the meeting, involves thinking through what the buyer may say and what your response is going to be – sometimes a question or scenario will come from left field and if this is the case then you will have so much preparation that you should be able to answer on the hoof.  OR say I will come back to you – never make it up – I have seen account managers tie themselves in knots answering questions on numbers that they don’t know and then unravelling later in the presentation as the made up numbers don’t stack up.  But as we know fail to prepare, prepare to fail!!
5. Plan the time
Always plan for a meeting to last about half what is in the diary – so if it is an hour – pull together enough material etc for half.  After all everyone will think it’s a bonus if you finish early! If you doing a presentation, prepare a powerpoint presentation as a disciplined approach to getting the job of prework done but don’t always use it in the actual meeting –just have it there as your own little fact book. No buyer likes a 60 minute, 50 slide presentation telling them what they probably already know!!  Think of the sequence of events that will produce the goal you are looking for out of the meeting and establish a timeplan in your own mind – make sure you get to the key important stuff which is always the last couple of slides before she is beginning to gather her stuff!!
Once such example was when Tesco were doing their supplier rationalisation project – they gave all an allocation of time and we had heard from other presentations that if you did not finish on time then they would just walk out.  So my team and I practised and practised and had time markers throughout.  Suffice to say that they started 15 minutes late and we had to do a juggle but because we were so well organised, it ran perfectly to schedule -  and yes we retained our supplier status!
So how do you plan the meeting – most meetings have a degree of selling ie describing the features and benefits of your proposal and a degree of negotiation ie in its simplest form – if you…then I 

So the idea of the specific proposal is that you have told the buyer how you can help solve their problem and why your idea is so compelling.  The specific proposal is a concise, if you do this (eg list my product) then you will achieve this (category growth, better profits, sales uplift, be loved by your boss!!) type of one pager.  Be structured and direct – it is a commercial benefit to them you are selling not the benefits of your product.  Also don’t be vague or offer signs of weakness!!  I am particularly guilty of using soft signal and vague language – “so I think we could offer you around 30% margin” – says to buyer either you don’t know your numbers OR more excitingly you have much more to give then 30%!  Other examples of soft signals are:
“We normally charge….…..”
“ We were hoping for….”
“My ideal is ……..”
“My opening offer is …….”
“our list price is ……..”
“I would be happy with…..”
“ The price is around….”
“….between £30 to £50 per unit”
“Can you do it for …….?”
“Would you do it for……?”
There are 10 rules of making a successful specific proposal
• Concise and specific language
• Specific variables and values
• Maximum 30 seconds
• If you .. Then you will make
• No soft signals
• Don’t sell it
• Commercial benefit to them
• Planned with Ambition
• Delivered with confidence
• Then pause………
To enable you to make this proposal, you need to decide your negotiation strategy – Start by target setting – traditionally you may have worked with your target, ideal and settle for but this structure builds in a walk away number which is before the no deal.  This is a very powerful technique as it enables you to walk away take a breather rather than negotiate down to the bare minimum.

The art of negotiation is to let your opponent declare first – sometimes I may ask a buyer what margin they are aiming for or ideal msp but it is likely that they will expect you to come up with the first number that should be your “try for” – a fantastic result if you got it but also sets the scene.  There is then an objective price that you think would be a good result and then the minimum which is your walk away – this may not actually be your absolute no deal price but it is good to have this number emotionally as it does enable you to come back again another day if need be and also sends a warning to the buyer that you are getting close to the end.
Clearly the buyer will have a similar set of numbers and hopefully there is some overlap which we will term “the zone of possible agreement

The art is then to see what are your customer needs – as I said they maybe cheaper for you than the buyer thinks.  Never give something without something in return. I have watched negotiations spiral down as the supplier has just given everything they are asked to make the sale.  And don’t get distracted by time controls – imagine the double glazing salesman who says the deal has to be closed tonight or there is no deal – don’t be pressurised by this! And also have patience.  I am really bad at this wanting to get to the end asap – take your time if there is time because it will reduce the pressure.
Some of the elements that may be available or of interest to negotiate and can be built into your specific proposal are as follows:

6. Follow up!
I have worked with several clients who do not write contact reports and action plans – it is poor discipline and can come back and bite you if you believe you have agreed something but not put it in writing.  Sometimes these need to be very carefully written as some of the negotiation to ing and froing may not be appropriate to note down but put in  what has been discussed and circulate to the buyer and attendees within 48 hours of the meeting.  Also issue a copy to key stakeholders in your business so that they know what is going with your customer.  
Using emotions as you negotiate 
We are all human and there is an old adage that “people buy from people” and this is still largely true – not so easy when you are doing an internet based tender but actually getting on that roster often may involve the people element.  Be mindful of this when you are negotiating.  As I said earlier, making your buyer look and achieve success should be part of your objective – so think how you may achieve that through growing the category with your brand or own label.  Find ways of building rapport with the buyer eg complement them on a new launch or range, their creativity etc. When negotiating with inexperienced buyers try to support them rather than going for the kill.   Most retailer relationships are a long game so don’t score points or knowingly leave your buyer exposed – make her look good and she will make sure your products perform well. 
Be as detached and as unemotional as possible.  When I worked for ichiban we were noted for our emotional reactions.  My MD’s response was that it was true, we were emotionally involved and committed and it was a sign of someone who cares and is passionate about their business.  Whilst this is true especially for food preneurs, it is imperative to stay detached to better enable you to negotiate – whether that is knowing you have a plan B, doing some breathing exercises and mediation or just walking away 
However the well trained buyer has their own little selection of emotional tactics as follows:
¥ Silence/over familiarisation
¥ Arbitrage – “our policy is” “our new process is” – this actually takes pressure off her and it makes it difficult to negotiate against
¥ Threatening wider punishment – this may be implied and not overt including reducing distribution in other areas etc
¥ Purposefully misheard – this is a naughty tactic but can put you off guard if she pretends to hear a lower margin than you are proposing – psychologically it sets a lower figure in your mind
¥ Time deadlines – this can be difficult if you need to review information but the buyer is creating  a challenging deadline which may indeed be true as they have long leadtimes for planning listings etc
¥ Split the difference – NEVER split the difference on a number – it is not a good way to achieve the best number
¥ Before you go (a la Colombo) – just when you think you have reached a deal the buyer brings in an unacceptable demand.  I had this happen where I thought I had negotiated an inflationary increase, had provided all the information asked for and we had almost shaken on it and then they wove in a whole new angle. Very frustrating and you need resilience!!
¥ You are the only one – your competitors are better….at providing information, better margins, better rate of sale etc etc – this is extremely common and may be a tactic or it may be true. Either way don’t be complacent but generally try and and move away from such comments 
¥ Personal exploitation of relationship “my boss will kill me” – less likely to happen these days as buyers like to seem to be empowered but it is another version of arbitrage just with some emotional manipulation thrown in for good measure
I have had every single one of those imposed on me over the years and it was great to get the negotiation training that taught about the way to move on from these tactics.

What to do when it goes wrong
I am not great at detail or preparation and am better at off the cuff negotiation as it gives me flexibility which I find suits my personality.  But after a couple of buyer meetings where realised I just didn’t know enough, I got smart! Back to “retail is detail” and  the retailer buyers are so well prepared in most cases, you need to be armed to the teeth with info.  But sometimes we can get if wrong and the following is a checklist of few areas where you can get it so wrong
1. The over optimistic forecast!
By our very nature, people in sales and account management are very positive people as are entrepreneurs selling their product to the big retailer for the first time.  We see opportunity where others see challenge. We know our products will sell more than the competition – after all that’s how we got the listings or additional distribution in the first place.  So despite the downturn in the market, the retailer may be in decline and/or category may be struggling, we think we will do just fine and grow….alot!.  BEWARE – this may give unrealistic targets which will bring trouble as the year progresses and enable the buyer to delist or look for better terms.   Problems can 
- Over forecasting so that the factory has insufficient volumes to be efficient
- Not enough sales per store to sell one case so there is heavy waste
- Falling below expectations may displace your brand in favour of another

Try to set realistic targets and then reduce them – clearly if you are too low then there are corresponding issues but as I said most of us are over optimistic!
2. The cost price
We live in a volatile unpredictable world – who knew that diesel would suddenly cost more than petrol, that our pound would go so much further against the euro (again), that the weather would be hottest/coldest/wettest/windiest on record?  
And therefore who can guarantee that the cost price of our products will stay the same for a year?  Retailers when looking at new products will usually want to agree a deal for the year (but with caveats that enable them to delist should the product fall short of expectations with no price increases.  BEWARE – you may find yourself as I did in a previous life with a product that makes a loss for 6 months contractually before you can negotiate a better price.  Or buyers may well want to have an open book costing model so that they can take advantage of any commodity price movements – be aware and price accordingly 

Build in some flexibility for market conditions when you agree target margins
3. The open chequebook
There are two things that seem very innocent when first looked at – paying for waste and loss of profit for shortages.  
- Waste - The legal beagles will tell you that retailers can no longer ask for waste support unless it is part of the business plan.  My general rule is do not agree to fund waste.   I have seen waste at over 100% and especially on new fledgling products which means you are effectively paying them to take your products. 
- Shortages – loss of profit for shortages is another retailer request which may seem reasonable at the beginning but if you have an order that spikes because the forecasts were wrong and then cannot fulfil it or there is a national shortage of your key ingredient, loss of profit charges can mount up especially as they are calculated on retail price not cost price and you will end up doubly worse off

Don’t agree to limitless compensation – paying for waste can be a useful negotiation tool if you are trying to push short dated stock into the system to avoid write off.  Retailers hate waste and so may help you but ask that you pay for any that wastes – make sure you put a cap on this as it is a very expensive open cheque book

4. Costs you never saw coming 
Most retailers have a substantial supplier manual where hidden away on page 205 are little charges that you never gave a thought to but may make the difference to a profitable business and a disaster.
Here are a few that you need to remember

“Be a better supplier” - conference support fees (IGD conferences now cost £560 per person and are essential supplier briefing days), supplier training (although many are now free) and of course buying loyalty card data (Nectar, Clubcard etc) plus invites to charity galas at £1000 per head .  All valuable part of understanding your customer and building relationships  but remember once again this can run into £’000s and that’s a lot of sales to deliver the net profit you are investing here. 
Sampling – totally prohibitive esp as the samples have to be taken from stock at full retail price and the staff are charged at v high rates but it may be an important part of your strategy especially if you are establishing a new category 

Awards funding: If you are an own label supplier, entry to Q awards, Supermeat  etc  all have to be paid for by you, the supplier even though it has the retailers name on it – entry fees, costs of samples etc 
Audits – if you are an own label supplier then the retailer will want to do its own due diligence audits which you will pay for – they can be very constructive and great consultancy on how to improve the factory but for a small business, eat away at profit margins
The buyers checklist
I said at the beginning of this chapter the buyer is well prepared and trained of course to negotiate and so have a look at a buyers training checklist, edited from actual buyers training manual:
Planning - know as much as possible about your supplier and their competitors and possible areas of weakness
Receiving proposals - react negatively first – the builders intake of breath and pursed lips!
Then break proposal into small bits to enable you to break down the pieces
Never ever interrupt the proposal – find out everything first
Look for weakness in soft signals
Use silence to put them off
Making proposals
Open with an unbelievable figure -  your Try for
Be extreme and shock (NB One retailer did this very effectively during a season of negotiation asking for extreme increases in margin and then delisting products immediately if they were not met – fortunately GSCOPs has put a stop to this bully boy tactic)
Use “if you….then I
BE clear on the commercial benefit and how much the supplier needs you and play on salespersons vulnerability ( I have had a buyer threaten to tell my boss how bad I was at negotiation!)
Pause – silence is very valuable!
Trading
Never concede for no return
Never move first, make progressively smaller moves, fewer times
Test their positions
Accept goodwill gestures and ask for more
Take time and control the meeting
Style
Maintain high aspirations
Control the room – where you sit
Control the meeting – put a time limit on that may give pressure
Never back yourself into a corner
Challenge the supplier’s restrictions
Once you know what you could be up against then you are better prepared to cope.  A lot of buyers and retailers now realise that they need to work with suppliers not against them but at the end of the day it is their job to get the best deal possible for their business.  As it is yours!
In the next chapter we look at how negotiation skills can be used to great benefit with suppliers

The art of negotiation is to let your opponent declare first – sometimes I may ask a buyer what margin they are aiming for or ideal msp but it is likely that they will expect you to come up with the first number that should be your “try for” – a fantastic result if you got it but also sets the scene.  There is then an objective price that you think would be a good result and then the minimum which is your walk away – this may not actually be your absolute no deal price but it is good to have this number emotionally as it does enable you to come back again another day if need be and also sends a warning to the buyer that you are getting close to the end.

Clearly the buyer will have a similar set of numbers and hopefully there is some overlap which we will term “the zone of possible agreement

The art is then to see what are your customer needs – as I said they maybe cheaper for you than the buyer thinks.  Never give something without something in return. I have watched negotiations spiral down as the supplier has just given everything they are asked to make the sale.  And don’t get distracted by time controls – imagine the double glazing salesman who says the deal has to be closed tonight or there is no deal – don’t be pressurised by this! And also have patience.  I am really bad at this wanting to get to the end asap – take your time if there is time because it will reduce the pressure.

Some of the elements that may be available or of interest to negotiate and can be built into your specific proposal are as follows:

6. Follow up!

I have worked with several clients who do not write contact reports and action plans – it is poor discipline and can come back and bite you if you believe you have agreed something but not put it in writing.  Sometimes these need to be very carefully written as some of the negotiation to ing and froing may not be appropriate to note down but put in  what has been discussed and circulate to the buyer and attendees within 48 hours of the meeting.  Also issue a copy to key stakeholders in your business so that they know what is going with your customer. 

Using emotions as you negotiate

We are all human and there is an old adage that “people buy from people” and this is still largely true – not so easy when you are doing an internet based tender but actually getting on that roster often may involve the people element.  Be mindful of this when you are negotiating.  As I said earlier, making your buyer look and achieve success should be part of your objective – so think how you may achieve that through growing the category with your brand or own label.  Find ways of building rapport with the buyer eg complement them on a new launch or range, their creativity etc. When negotiating with inexperienced buyers try to support them rather than going for the kill.   Most retailer relationships are a long game so don’t score points or knowingly leave your buyer exposed – make her look good and she will make sure your products perform well.

Be as detached and as unemotional as possible.  When I worked for ichiban we were noted for our emotional reactions.  My MD’s response was that it was true, we were emotionally involved and committed and it was a sign of someone who cares and is passionate about their business.  Whilst this is true especially for food preneurs, it is imperative to stay detached to better enable you to negotiate – whether that is knowing you have a plan B, doing some breathing exercises and mediation or just walking away

However the well trained buyer has their own little selection of emotional tactics as follows:

•       Silence/over familiarisation

•       Arbitrage – “our policy is” “our new process is” – this actually takes pressure off her and it makes it difficult to negotiate against

•       Threatening wider punishment – this may be implied and not overt including reducing distribution in other areas etc

•       Purposefully misheard – this is a naughty tactic but can put you off guard if she pretends to hear a lower margin than you are proposing – psychologically it sets a lower figure in your mind

•       Time deadlines – this can be difficult if you need to review information but the buyer is creating  a challenging deadline which may indeed be true as they have long leadtimes for planning listings etc

•       Split the difference – NEVER split the difference on a number – it is not a good way to achieve the best number

•       Before you go (a la Colombo) – just when you think you have reached a deal the buyer brings in an unacceptable demand.  I had this happen where I thought I had negotiated an inflationary increase, had provided all the information asked for and we had almost shaken on it and then they wove in a whole new angle. Very frustrating and you need resilience!!

•       You are the only one – your competitors are better….at providing information, better margins, better rate of sale etc etc – this is extremely common and may be a tactic or it may be true. Either way don’t be complacent but generally try and and move away from such comments

•       Personal exploitation of relationship “my boss will kill me” – less likely to happen these days as buyers like to seem to be empowered but it is another version of arbitrage just with some emotional manipulation thrown in for good measure

I have had every single one of those imposed on me over the years and it was great to get the negotiation training that taught about the way to move on from these tactics.

What to do when it goes wrong

I am not great at detail or preparation and am better at off the cuff negotiation as it gives me flexibility which I find suits my personality.  But after a couple of buyer meetings where realised I just didn’t know enough, I got smart! Back to “retail is detail” and  the retailer buyers are so well prepared in most cases, you need to be armed to the teeth with info.  But sometimes we can get if wrong and the following is a checklist of few areas where you can get it so wrong

###td ### 1.     The over optimistic forecast!

By our very nature, people in sales and account management are very positive people as are entrepreneurs selling their product to the big retailer for the first time.  We see opportunity where others see challenge. We know our products will sell more than the competition – after all that’s how we got the listings or additional distribution in the first place.  So despite the downturn in the market, the retailer may be in decline and/or category may be struggling, we think we will do just fine and grow….alot!.  BEWARE – this may give unrealistic targets which will bring trouble as the year progresses and enable the buyer to delist or look for better terms.   Problems can

-        Over forecasting so that the factory has insufficient volumes to be efficient

-        Not enough sales per store to sell one case so there is heavy waste

-        Falling below expectations may displace your brand in favour of another

Try to set realistic targets and then reduce them – clearly if you are too low then there are corresponding issues but as I said most of us are over optimistic!

2.     The cost price

We live in a volatile unpredictable world – who knew that diesel would suddenly cost more than petrol, that our pound would go so much further against the euro (again), that the weather would be hottest/coldest/wettest/windiest on record? 

And therefore who can guarantee that the cost price of our products will stay the same for a year?  Retailers when looking at new products will usually want to agree a deal for the year (but with caveats that enable them to delist should the product fall short of expectations with no price increases.  BEWARE – you may find yourself as I did in a previous life with a product that makes a loss for 6 months contractually before you can negotiate a better price.  Or buyers may well want to have an open book costing model so that they can take advantage of any commodity price movements – be aware and price accordingly

Build in some flexibility for market conditions when you agree target margins

3.     The open chequebook

There are two things that seem very innocent when first looked at – paying for waste and loss of profit for shortages. 

-        Waste - The legal beagles will tell you that retailers can no longer ask for waste support unless it is part of the business plan.  My general rule is do not agree to fund waste.   I have seen waste at over 100% and especially on new fledgling products which means you are effectively paying them to take your products.

-        Shortages – loss of profit for shortages is another retailer request which may seem reasonable at the beginning but if you have an order that spikes because the forecasts were wrong and then cannot fulfil it or there is a national shortage of your key ingredient, loss of profit charges can mount up especially as they are calculated on retail price not cost price and you will end up doubly worse off

Don’t agree to limitless compensation – paying for waste can be a useful negotiation tool if you are trying to push short dated stock into the system to avoid write off.  Retailers hate waste and so may help you but ask that you pay for any that wastes – make sure you put a cap on this as it is a very expensive open cheque book

4.     Costs you never saw coming

Most retailers have a substantial supplier manual where hidden away on page 205 are little charges that you never gave a thought to but may make the difference to a profitable business and a disaster.

Here are a few that you need to remember

            “Be a better supplier” - conference support fees (IGD conferences now cost £560 per person and are essential supplier briefing days), supplier training (although many are now free) and of course buying loyalty card data (Nectar, Clubcard etc) plus invites to charity galas at £1000 per head .  All valuable part of understanding your customer and building relationships  but remember once again this can run into £’000s and that’s a lot of sales to deliver the net profit you are investing here.

            Sampling – totally prohibitive esp as the samples have to be taken from stock at full retail price and the staff are charged at v high rates but it may be an important part of your strategy especially if you are establishing a new category

            Awards funding: If you are an own label supplier, entry to Q awards, Supermeat  etc  all have to be paid for by you, the supplier even though it has the retailers name on it – entry fees, costs of samples etc

Audits – if you are an own label supplier then the retailer will want to do its own due diligence audits which you will pay for – they can be very constructive and great consultancy on how to improve the factory but for a small business, eat away at profit margins

The buyers checklist

I said at the beginning of this chapter the buyer is well prepared and trained of course to negotiate and so have a look at a buyers training checklist, edited from actual buyers training manual:

Planning - know as much as possible about your supplier and their competitors and possible areas of weakness

Receiving proposals - react negatively first – the builders intake of breath and pursed lips!

Then break proposal into small bits to enable you to break down the pieces

Never ever interrupt the proposal – find out everything first

Look for weakness in soft signals

Use silence to put them off

Making proposals

Open with an unbelievable figure -  your Try for

Be extreme and shock (NB One retailer did this very effectively during a season of negotiation asking for extreme increases in margin and then delisting products immediately if they were not met – fortunately GSCOPs has put a stop to this bully boy tactic)

Use “if you….then I

BE clear on the commercial benefit and how much the supplier needs you and play on salespersons vulnerability ( I have had a buyer threaten to tell my boss how bad I was at negotiation!)

Pause – silence is very valuable!

Trading

Never concede for no return

Never move first, make progressively smaller moves, fewer times

Test their positions

Accept goodwill gestures and ask for more

Take time and control the meeting

Style

Maintain high aspirations

Control the room – where you sit

Control the meeting – put a time limit on that may give pressure

Never back yourself into a corner

Challenge the supplier’s restrictions

Once you know what you could be up against then you are better prepared to cope.  A lot of buyers and retailers now realise that they need to work with suppliers not against them but at the end of the day it is their job to get the best deal possible for their business.  As it is yours!

In the next chapter we look at how negotiation skills can be used to great benefit with suppliers

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