Defensive Tactics
Day 9 - Facts and Data: Building Contracts, Not Hearts
Why This Matters:
Facts and data won’t win hearts and minds, but they sure do build solid contracts. As someone who’s biased towards data, especially in sourcing exercises, I can tell you that leveraging this tactic is crucial in creating agreements that stand up over time.
The Strategy:
As a buyer, you can fairly exploit this tactic through something as “simple” as an e-auction. In a competitive event, using a solid package of facts and data ensures that multiple suppliers can provide bids with the same information. This levels the playing field and allows you to get a strong sense of the market—without the bias of trying to make them like you. After all, they already like what you have—money. 💰
The Caveat:
But here’s the rub—those facts and data? They could just be lies. Volumes are regularly fudged, service rates are likely to increase over time, and sometimes suppliers are fed different information to steer a contract in a particular direction.
As a supplier, you can’t do much about the data manipulation, but you can use the data as a baseline for the contract you sign. Ensure the RFX data mentions specific volumes, regions, rebates, and service levels. Then, make sure the contract you sign reflects those details.
Corporate Example:
Let’s say the data indicates specific service levels and volumes. Does your contract include clauses for minimum purchases, rebates tied to volumes, or service hours? It should. And it should also specify what happens if reality doesn’t match the facts and data presented to you. For example, if service levels exceed expectations due to poorly trained staff, you shouldn’t bear the cost of their inefficiency.
Be On the Watch:
As a buyer, facts and data are your weapon. As a seller, there’s a book you might want to read: “Lies, Damned Lies, and Statistics.” 📊
Questions to Ponder:
• How often do you find discrepancies between the facts and data presented during negotiations and the reality after signing?
• How do you protect yourself against manipulated data in your contracts?
Let’s discuss: Have you used this tactic effectively, or have you been on the receiving end of manipulated data?
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