LP Magazine

MAY-JUN 2019

LP magazine publishes articles for loss prevention, asset protection, and retail professionals covering shrinkage, investigations, shoplifting, internal theft, fraud, technology, best practices, and career development.

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KLEINMAN: Some companies mandate that a potential provider agree to their formal terms and conditions verbatim, regardless of the industry the provider is in. Certain industries and their providers cannot realistically provide the quality of service and associated pricing desired by the retailer when the retailer is not flexible with other terms in such instances. The perfect example is the allocation of risk with respect to liability emanating from the service. When a provider comes across a retailer that wants the highest level of service at a competitive price, but also expects that provider to, in effect, be its insurer, it shows there can never be a true partnership, and the reputable provider should stay away. NIMBLETT: My favorite is the fluff. Time is always of the essence, but reading through fluff can really sidetrack the reader from the core message being delivered. Many times too much information about nothing is not what the reader is looking for. This doesn't mean you answer with, "Will provide during vendor meeting." You need to clarify and simplify the message. If there is fluff and a request to meet to discuss further, then the supplier did not put in the time to respond and likely will not put time into the next tasks required. Also, vendors must show what makes you different from your competition in the written response. If you do not know who your competition is, then the reader will figure it out for you and build out a comparison table. Guide the reader to your solution. If the details are vague and the response is all about the next meeting, the reader will be left trying to determine the next step for you. Knowing who your reader is, a dedicated professional skilled in the solutions or a corporate sourcing professional who sees one of these every few years will make a big decision on next step. From the procurement perspective, my favorite responses are ones that help me understand the solution against the competition and show how the price is tied to the benefit. What are some final thoughts on the negotiation process and partnering with providers? KLEINMAN: Retailers, especially the larger ones, should be cognizant that procurement decisions made in a vacuum strictly based on price are not necessarily in their company's best interest. Retailers need to consider not only price but also a provider's reputation and past experience, including longevity, service capability, and responsiveness. In the long run, spending a little more for the "better" quality provider up front will in all likelihood end up being the most cost-effective choice for any retailer, since that extra investment will be rewarded many times over with resulting savings from better service. That in turn saves their operations department's future expenditures and makes them more efficient. In other words, do not be penny wise and pound foolish. NIMBLETT: Retailers should not be afraid to walk away from a negotiation. There are numerous warning signs—from the supplier's unwillingness to share risk in the environment to cost being unclear and setup as a constant revenue stream. When negotiations start by focusing only on cost and there is no plan to truly educate and provide an understanding of the solution, the negotiation planning piece is lost, and a good sourcing/procurement professional should walk away. Given the need for a solution is still required, if the retailer has the correct partnerships in place, the procurement professional should be able to identify another provider who likely will be willing to come back to the table with a concession. SULLIVAN: It is very important to take care of solutions partners who have taken care of your company. If they have proven over time to deliver great products or services at a competitive price, I found that rewarding these partners with longer-term contracts was a great best business practice. It shows your commitment to them as a true partner and provides a true win for the stores because you've minimized business interruption while maintaining a valuable service to the stores. 54 MAY–JUNE 2019 | LOSSPREVENTIONMEDIA.COM "The biggest misstep is always the planning of the negotiation and balancing the amount of time needed. Many peers fall into a trap of thinking the technology and the services are similar to other negotiations recently done. Many do not realize things are changing quickly, and solutions that were popular last year are not the same solutions this year." – Thomas Nimblett, TIAA "It is very important to take care of solutions partners who have taken care of your company. If they have proven over time to deliver great products or services at a competitive price, I found that rewarding these partners with longer-term contracts was a great best business practice." – Terry Sullivan, LPC, Loss Prevention Foundation

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