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Procurement is more about selling than buying

Posted by Philip Kreindler on 07-Sep-2015 09:00:00

Here is the way old school Sales People think about Procurement. ‘They are the enemy. They make me jump through endless hoops. If I can just get past them and talk to the real decision makers I will win the business.’

But this is what the more successful Sales People think about Procurement. ‘These are the people who can open doors for me. If I earn their trust, give them new ideas and help them sell internally I will win the business.’

And this, according to our research, is the view many Procurement people have of vendor Sales People. ‘They don’t understand enough about their products and competitors. They don’t know enough about my business. And they certainly don’t give me what I need to sell their solution into my organisation.’

The reality is that Procurement is looking for innovative solutions to achieve efficiency and cost savings but all too often they fail to sell those innovative solutions to the rest of the business and vendors don’t give them what they need to support them. 

Let me share a couple of examples of how Procurement wanted to innovate but needed an internal Sales Process and maybe support from a professional Sales Person to achieve it.

Consolidation of warehousing

The procurement team of a multinational telecoms company identified a significant opportunity to increase efficiency and save money by shifting to a single supplier for warehousing and logistics across Europe. Each country had it’s own arrangements and changing would involve disruption they didn’t want. The procurement team had to sell the idea to every stakeholder in every country in order to get the project through.

This meant the Procurement team had to act like Sales Professionals and use tools familiar to anyone using a Sales Process. They had to create a Project Plan (Mutually Agreed Action Plan), identify all the stakeholders (Buying Center), carry out a stakeholder analysis and identify everyone’s needs (Customer Needs Analysis) then sum up the solution and it’s value (Deal One Pager) and how each stakeholder stood to benefit (Individual Value Propositions).

Technology improvements in tins

A food manufacturer was pleased to be approached by their supplier of tins who wanted to replace their 3 part tin cans with 2 part cans – and save the food manufacturer €110,000 ($125,000) every year. Which sounds like a very easy thing to say yes to? People in supermarkets buy what is in the tin, not the tin.

But Procurement had to sell the idea to the key departments in the business – packaging, production and key account management. And key account management had to sell the idea to the supermarket chains affected by the change to be sure that consumers would not be put off by the new packaging. 

These examples illustrate why Procurement has as much to do about selling as buying and also open up a whole load of ideas for Sales People to gain their trust.

5 ways to get procurement on your side

If you stop treating procurement like the enemy and start working with them they will in turn, start to trust you and start working with you to get your solution accepted by the business. Here is what you can do to get started.

  1. Keep procurement up to date

Procurement managers want to be seen by the business as advisors and innovators. If you help them keep up with innovations in the market place and what other companies are doing – they can keep their subject matter expertise up to date.

  1. Be responsive

Procurement plays a key role in managing the supply chain. They don’t want to be perceived by the business as slowing things down. So you need to be responsive, provide clear and reliable information, and mobilize internal resources.

  1. Focus on needs that are not currently being met

People generally don’t like change so it’s often hard for procurement to persuade the business to look at alternative suppliers. You either have to offer a price advantage of 20% or more or focus on innovations where there is no current supplier.

  1. Help procurement sell

Once procurement is on your side, give them all the help you can to sell into the business. You can support them with customer-internal versions of Sales Process tools including Buying Center Analysis, Mutually Agreed Action Plan (MAAP) and Deal One Pager. Procurement is also the guardian of the buying process so get your Sales Process in line with theirs and things will go more smoothly.

  1. Give procurement alternatives

The business may not like to change but existing suppliers can get complacent, lazy or greedy. If you are a challenger make sure you are always there with a proposal that procurement can put in front of a dissatisfied manager. 

The world of Sales is moving rapidly towards collaboration. It’s highly competitive and if you work with Procurement rather than thinking of them as the enemy you will get better results in the long run.

Ask yourself

  • Do you work with Procurement or try to work round them?

  • Does your Sales Process help Procurement sell internally?

  • Do you keep Procurement up-to-date and improve their subject matter expertise?

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