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Selling to Procurement

Guest post by: Tibor Shanto

Article Overview: Even during the best of times procurement or purchasing specialists are a reality sales people would rather not deal with. As the economy tightens and companies reexamine their spending, reclassify things in terms of crucial or discretionary, the role of these professionals becomes even more critical and frequent. They make more decisions in a vacuum where value is a distant second to price, Procurement Specialist wield more power than ever before.

Selling to Procurement

Question: Why bother?

No really, why bother?

Even during the best of times procurement or purchasing specialists are a reality sales people would rather not deal with. As the economy tightens and companies reexamine their spending, reclassify things in terms of crucial or discretionary, the role of these professionals becomes even more critical and frequent. They make more decisions in a vacuum where value is a distant second to price, Procurement Specialist wield more power than ever before.

There is no minimizing the impact they have on sales and the success of sales professionals. Sales professionals are constantly looking for ways to sell to these procurement folks, that special technique or special words that will help them overcome this perceived hurdle. How do we sell to Procurement? A question we hear over and over.

Well the bad news is there is no special incantation, technique or anything else that will magically change this "bad" reality. These people are there because they have the skills needed to succeed in their task.

Trying to sell to them using conventional means is analogous to one trying to inflict pain to an inanimate object like say a stump, or someone with no nerves in their body. You can kick, punch, stab, pinch slash, bust or burn. No nerves, no pain, no progress. Since they are immune to value, your value prop will fall on deaf ears, and you frustration level will rise to the point where you will make mistakes and greater harm to your ability to meet your objective.

This why we say "why bother?"

Your time is much better used employing a strategy and tactics to neutralize their impact and minimize their ability to negatively impact your efforts and objectives. How do you do this, by selling to the people who truly derive the "value" from your product; once they are sold, enlist them in helping you manage and marginalize the "procurement man" from with in.

Despite rumors to the contrary, procurement specialists are people, and as such you can talk to them, and learn many things, this is not going to happen in the middle of a transaction, but you can talk to them in other environments (conferences, trade shows, even those in your own company). What you learn is that they do have standards, and they do have objectives, and are measured on their success.

One thing I learned is that it is not just price that drives the whole thing, price is big, but there is more. One is the "real" need for the product and/or service you sell, will it really help in their company's success. Key here is the "company", not the individual. Often, as sales people we sell to individuals within a company, but those same individuals are unable to sell the 'powers that be', unable to show that there is a company need, rather than a nice to have. No matter how nice it may be for that one individual, they are unable to present a case that the benefit serves the broader need of the company, and as a result the initiative dies. The cause of death is reported as a number of things: "budget cut backs", "other priorities", "more cost effective solutions", the reality however is that your "chumpion" was unable to generate enough support elsewhere in the organization, and gave up for fear of spending too much political capital on the wrong initiative.

I hear sales people tell me all the time that their "chumpion", inside person really wants to buy, but they can't seem to get past procurement. Yet when you ask them who else they have involved in the decision they say they don't really want to "go around" the "chumpion", it may cause them to get upset. Really? So what? It's not like they are exactly getting you to where you need to be now, how much further behind can you get, if you are not getting the deal now, how can things get worse?

The key is to build broad based support. Go and find the people who benefit from your product, directly, and even more importantly indirectly. Let's say you sell research reports, you usually sell to research mangers, analysts, the occasional marketing director. Who do they work for? Who gets benefit from their output? After all your data may be part of some broader report, it is raw data that is processed by the above that makes its way into the decision process, say if, when, and how to launch a product. Who benefits if the decision is right, who suffers if the decision is wrong? On this level, who has a direct stake in the quality of the data and insights that go into the report on which they are betting their own and company's success?

If you reach out to those people, their peers and dependents, you will find the type of allies that have the ability to influence, move and marginalize Procurement. You will also find that when successful, your original "chumpion" will thank you, since they still get the halo effect of your success, and continue to benefit from the access to your product or service.

Same can be done in software, hardware, logistics, you name it, and anywhere where your product can be tied to "critical" aspects of success, rather than labeled as a "nice to have".

The key is do you know who is the ultimate beneficiary of the output, will your "chumpion" attest their need to have your product or service, or can you make a compelling enough argument to the real stake holders that can help influence or manage procurement.

One company we worked with began to target CFO's, the strategy was to align their product, considered by most a commodity, to the company's financial objectives: reduced over all cost; and to the company's productivity objectives which included consolidation, automation and outsourcing of non-core or essential activities. Their competitors who continued to target their traditional buyers all lost business, all got stalled, and all had sympathetic "chumpions". Our client was able to elevate their sale, and by engaging the CFO and positioning the decision to other criteria, found a real Champion when it came to procurement, the procurement director's boss: the CFO.

It is not easy, it does take work, not only in hunting down the right people and getting in front of them, but also in reinventing how you position and pitch your service and value to a client/prospect. On the other hand, once you do accomplish this reinvention, the dividends are big, long lasting and repeatable. One added bonus is that once you redefine yourself in this way, with the expanded more powerful audience, the size of your sale, market and wallet share also improve. It's up to you, you can rationalize why you lost, or take the same effort, resources and energy to win.

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Article Tags: execution, Procurement, renbor, sell better, Selling value



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