What Purchasing Agents Are Learning These Days
What Purchasing Agents Are Learning These Days
I was wrong. As I started to peel away the commonly held misconceptions, I realized that the purchasing agents are not bad people. They’re simply serving a different function than sales and marketing. The exact opposite function.
What is the role of the purchasing agent? To increase a company’s profitability through efficient and effective purchasing of goods and services. To get the best possible products and services at the best possible price. After all, there are two ways to increase profits in business. One is to make more money. The other is to spend less.
So have a little respect. Any good purchasing agent will smell out a professional seller that comes to the table with pre-conceived disdain for his or her role as a professional buyer. And they will exercise their power. They will make you sweat. Because a good purchasing agent is well trained. And shame on you for coming to the table with the wrong mindset in the first place.
At the suggestion of Dan Shanok, a good friend and sales consultant, I took a close look at not just the role of purchasing agents, but at what they are reading and studying these days. After some reflection, it should come to no surprise that the most commonly emphasized subject in the modern purchasing agent’s curriculum is the time honored function of any business transaction… negotiating.
Here’s a telling excerpt from “Hold on to these Negotiation Truths” by Joe Auer:
“Never tell a vendor:
How much you’re willing to spend or what your budget is
It’s a strategic partner
You have a deadline for the project
You love its product
Your profit margins
Who its competitors are
Who won the bid
It’s the only vendor being considered, even if it is.
You need its product
The bids you received from other vendors.
That you prefer its product over competitors’ products
Anything that could give it leverage during the final decision-making process.
Exactly how much you plan to buy
You’re new to negotiations.
Its price is reasonable
It has “locked in your business” even after the deal is signed.”
If you’re the seller, you’re looking to win the project or contract at a profitable margin. The buyer is looking for the best quality at the best price. They don’t necessarily want you to work at low or no margin pricing. They are just doing their job, which is to negotiate a good deal.
I often hear marketing and sales professionals complain about the lack of “creativity” among purchasing agents. News Flash: They are not creative people, nor are they functioning in a particularly creative role. They are not just like you, nor do they necessarily see the business world through your eyes. They are expert negotiators, and should be treated as such.
It is often in the negotiation phases of a business deal that many novice sellers run into trouble. They start thinking, “Maybe I can do it for that price if we cut corners somewhere. Maybe I’ll give ground on this sale and make up for it in volume. That’s a very dangerous game. It’s better to get creative with your brand than to get too creative with your deliverable. Because your Brand is Your Armor. It is the intangible that the purchasing agent can’t factor in to his or her analytical process of vendor comparison.
At the end of the day, the buyer is trying to make a decision, trying to fit you into the grid of compatible suppliers in an attempt to compare apples to apples. This is hard to do if your brand looks more like an orange. Because an orange sitting prominently atop a barrel of apples simply doesn’t quite fit.
“But, that will put us out of the running,” you may be inclined to say. “We’ll lose out on the opportunity altogether if we don’t play by their rules.” I would argue that this may be the case, but only on the rarest of occasions. The goal of branding is to position your product, service or firm as the undisputed stand out. To represent a unique option to the buyer, one that the competition can’t possibly touch. It is your X factor. Because once that X factor is on the table, how does the buyer know if he or she is missing out on a chance to work with a remarkable provider that offers tremendous value?
By positioning your brand as the lone wolf instead of another member of the pack, you may very well give the buyer a moment of pause, or clarity. It is in that moment that a purchasing decision maker will see you for all that you are that is uniquely special, and all that the two of you might do together that’s equally special. The lone wolf commands immediate attention and respect. The lone wolf cannot be categorized, or duplicated, or compared. And while I’ve never encountered a lone wolf up close in the wilderness, I can only imagine that it would be a tough negotiation.
George Ross, one of Donald Trump’s key executives, once said: “Never negotiate a deal on a cell phone.” Why? Because when a buyer is in negotiation mode, their strongest resource is data. Spreadsheets and comparative studies, historical pricing, industry standards and any other information that can be used as leverage. It’s hard to sift through data when you’re doing 75 mph down the Parkway, talking on a cell phone, and already five minutes late to your destination.
As the seller, you too must come up with your own arsenal. But instead of being limited only to data, you can use brand power to emphasize value. And there are many ways to demonstrate brand value:
Critical value. If you needed life-saving surgery, and there wasn’t a moment to spare, would you ask for a second opinion?
Remarkable value. If you had a chance to gain a true advantage over the industry leaders, would you wait for the competition to make the first move?
Pioneering value. If you could be the first to market with a new product or service, and gain all the accolades that come with being the original, would you hold off?
Revenue-generating value. If you realized an opportunity to increase profit margins 10% by acting today, would you wait a few months to decide?
When a buyer tries to paint you red like the other apples, it’s your job to effectively explain how you are different – different in a way that has undisputed value. So have some respect for the role of the negotiator on the other side of the table. Play your brand card for all its worth. And play to win. Good luck!
What Purchasing Agents Are Learning These Days - To learn more about this author, visit Ed Delia's Website.
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I confess. Before I set out to write this article, I was guilty of buying in to the same stereotype that many sales and marketing people have of purchasing agents: they are heartless, evil people, placed on this world to make the lives of sellers an absolute hell.
I was wrong. As I started to peel away the commonly held misconceptions, I realized that the purchasing agents are not bad people. They’re simply serving a different function than sales and marketing. The exact opposite function.
What is the role of the purchasing agent? To increase a company’s profitability through efficient and effective purchasing of goods and services. To get the best possible products and services at the best possible price. After all, there are two ways to increase profits in business. One is to make more money. The other is to spend less.
So have a little respect. Any good purchasing agent will smell out a professional seller that comes to the table with pre-conceived disdain for his or her role as a professional buyer. And they will exercise their power. They will make you sweat. Because a good purchasing agent is well trained. And shame on you for coming to the table with the wrong mindset in the first place.
At the suggestion of Dan Shanok, a good friend and sales consultant, I took a close look at not just the role of purchasing agents, but at what they are reading and studying these days. After some reflection, it should come to no surprise that the most commonly emphasized subject in the modern purchasing agent’s curriculum is the time honored function of any business transaction… negotiating.
Here’s a telling excerpt from “Hold on to these Negotiation Truths” by Joe Auer:
“Never tell a vendor:
How much you’re willing to spend or what your budget is
It’s a strategic partner
You have a deadline for the project
You love its product
Your profit margins
Who its competitors are
Who won the bid
It’s the only vendor being considered, even if it is.
You need its product
The bids you received from other vendors.
That you prefer its product over competitors’ products
Anything that could give it leverage during the final decision-making process.
Exactly how much you plan to buy
You’re new to negotiations.
Its price is reasonable
It has “locked in your business” even after the deal is signed.”
If you’re the seller, you’re looking to win the project or contract at a profitable margin. The buyer is looking for the best quality at the best price. They don’t necessarily want you to work at low or no margin pricing. They are just doing their job, which is to negotiate a good deal.
I often hear marketing and sales professionals complain about the lack of “creativity” among purchasing agents. News Flash: They are not creative people, nor are they functioning in a particularly creative role. They are not just like you, nor do they necessarily see the business world through your eyes. They are expert negotiators, and should be treated as such.
It is often in the negotiation phases of a business deal that many novice sellers run into trouble. They start thinking, “Maybe I can do it for that price if we cut corners somewhere. Maybe I’ll give ground on this sale and make up for it in volume. That’s a very dangerous game. It’s better to get creative with your brand than to get too creative with your deliverable. Because your Brand is Your Armor. It is the intangible that the purchasing agent can’t factor in to his or her analytical process of vendor comparison.
At the end of the day, the buyer is trying to make a decision, trying to fit you into the grid of compatible suppliers in an attempt to compare apples to apples. This is hard to do if your brand looks more like an orange. Because an orange sitting prominently atop a barrel of apples simply doesn’t quite fit.
“But, that will put us out of the running,” you may be inclined to say. “We’ll lose out on the opportunity altogether if we don’t play by their rules.” I would argue that this may be the case, but only on the rarest of occasions. The goal of branding is to position your product, service or firm as the undisputed stand out. To represent a unique option to the buyer, one that the competition can’t possibly touch. It is your X factor. Because once that X factor is on the table, how does the buyer know if he or she is missing out on a chance to work with a remarkable provider that offers tremendous value?
By positioning your brand as the lone wolf instead of another member of the pack, you may very well give the buyer a moment of pause, or clarity. It is in that moment that a purchasing decision maker will see you for all that you are that is uniquely special, and all that the two of you might do together that’s equally special. The lone wolf commands immediate attention and respect. The lone wolf cannot be categorized, or duplicated, or compared. And while I’ve never encountered a lone wolf up close in the wilderness, I can only imagine that it would be a tough negotiation.
George Ross, one of Donald Trump’s key executives, once said: “Never negotiate a deal on a cell phone.” Why? Because when a buyer is in negotiation mode, their strongest resource is data. Spreadsheets and comparative studies, historical pricing, industry standards and any other information that can be used as leverage. It’s hard to sift through data when you’re doing 75 mph down the Parkway, talking on a cell phone, and already five minutes late to your destination.
As the seller, you too must come up with your own arsenal. But instead of being limited only to data, you can use brand power to emphasize value. And there are many ways to demonstrate brand value:
Critical value. If you needed life-saving surgery, and there wasn’t a moment to spare, would you ask for a second opinion?
Remarkable value. If you had a chance to gain a true advantage over the industry leaders, would you wait for the competition to make the first move?
Pioneering value. If you could be the first to market with a new product or service, and gain all the accolades that come with being the original, would you hold off?
Revenue-generating value. If you realized an opportunity to increase profit margins 10% by acting today, would you wait a few months to decide?
When a buyer tries to paint you red like the other apples, it’s your job to effectively explain how you are different – different in a way that has undisputed value. So have some respect for the role of the negotiator on the other side of the table. Play your brand card for all its worth. And play to win. Good luck!
What Purchasing Agents Are Learning These Days - To learn more about this author, visit Ed Delia's Website.
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