The Client
Total Negotiation Group’s client is a global FMCG supplier with a product portfolio spanning 5 distinct grocery categories and market leadership in 3 of these.
Their Challenge
The client had been through a sustained period of mergers and acquisitions during which trading practices had not been harmonised. As a result, trading terms were both commercially and legally unsustainable. In practice some customers had up to 12 different sets of terms and agreements while others only had part of the portfolio included for growth and over-rider payments. Buyers and NAMs spent most of their time focused on calculating retro payments rather than developing their mutual business! The technical commercial risk of harmonising similar customers to similar terms was estimated at £100 million per annum.
Objectives of the engagement
The overarching objective was to help the business implement a strategy of making all trade investment conditional and to address significant over investment in multiple customers. Within this were several discrete objectives:
The solution
Total Negotiation Group joined the engagement to support implementation after the commercial design was completed by a ‘top 3’ consulting firm. As often happens, the design worked well on a spreadsheet and in theory but ignored the practicalities and customer overlaps. Consequently, our role extended to supporting the business in significant re-design of the strategy before implementation could take place. The outputs were negotiation strategies that matched the business risk decision for each customer.
As a member of the governance team of the UK Commercial Exec, Total Negotiation facilitated senior stakeholders to create workable and aligned strategies. They then supported account teams with detailed negotiation planning and support sessions for key customers, including role-playing meetings and hothousing stumbling blocks. Finally, they led the thinking around business-as-usual transition, delivering training to minimise future commercial risk.
Outcome:
Total Negotiation Group added significant value to the project that resulted in the original 6-day trial being regularly extended by the client to become 200 days across 2 years.
‘Total Negotiation Group has been pivotal in the project to restructure trade terms this year. Mark has supported senior managers but also, very effectively, played devil’s advocate to produce far better options than we could have achieved otherwise. Mark is adept at influencing at all levels, from NAM to Director, and this has brokered alignment on the project. Most importantly, he has helped to maintain the momentum when it could have been derailed by other priorities.’
Future
Total Negotiation Group continues to provide a supporting role as the client implements the new trade terms.