Salespeople meet with those that buy their products and services. So, if someone has the words buyer, purchasing or procurement in their title, you’d assume he or she is your contact. However, the words buyer, purchasing or procurement indicates authority to buy, but not willingness to buy. This creates a paradox for value-added salespeople. Your contact might be in purchasing, but they are less willing to purchase your value-added solution, because purchasing focuses more on price than value.
Procurement people are professional buyers. They know the job of a salesperson is to sell at a certain price. Their goal is to chisel away at your margins. Procurement departments withhold certain information. They won’t reveal underlying issues. They know revealing their pain mitigates the importance of price.
Procurement employs several techniques to focus the conversation on price versus value.
Procurement will commoditize your solution. As hard as you sell them on your differences, they sell you on your sameness. As enthusiastically as you promote your value-added extras, they discount the importance of your value-added. Procurement tries to convince you that all solutions are the same. When you’re the same, price is all that matters.
Once your solution is stripped of its value, procurement begins pricing ping-pong. You’ll go back and forth negotiating price. They’ll try convincing you that they’re acting in your best interest by sharing the competitor’s pricing or giving you last look. They’re not. Procurement is attempting to squeeze every ounce of margin out of the deal.
Procurement will block you from the rest of the organization. Procurement builds walls in their department. They discourage you from contacting other decision makers. When other decision makers are involved, procurement loses control. If other decision makers buy in to your value-added solution, price becomes less important.
How does procurement prove their worth to the organization? They get a discount. A discount is a tangible outcome they can report to management. Procurement has to prove their worth to the organization, as do you. Salespeople prove it through performance, procurement proves it with a discount. This is the fundamental challenge of selling value-added to just procurement. It’s a tug of war between price and value. If you’re just selling to procurement, a cheap price wins.
Here are a few tips to sell your value-added solution and get past the procurement trap.
Avoid Procurement From The Beginning
Salespeople take the path of least resistance. Procurement is more accessible than any other department. There is a reason procurement is more accessible. Since it’s easy, most salespeople start with procurement. Procurement people are willing, able and available to meet. Once initial contact is made with procurement, they discourage you from talking to other decision makers. They block you from other departments. To get past the procurement trap, avoid the trap from the very beginning. Take the road less traveled.
Start the process with other decision makers involved. In addition to purchasing, there are influencers. This group’s opinion is their power. Establish first contact with this group. Influencers and end-users are impacted the most by the decision. They are more open to a value-added solution. They’re less concerned about price and more focused on performance.
Make Joint Calls
Make a joint call with your company’s counterpart. If you’re trying to meet with a senior manager, bring your senior manager. If you’re meeting with an engineer, bring one of your engineers. The easiest way to get a meeting with a technical influencer is to bring along your company’s technical influencer. Joint calling opens more doors and facilitates deeper customer relationships making price less important.
Joint calls are important when meeting with high-level decision makers. When your high-level decision maker meets with your customer’s high-level decision maker, it’s a different conversation. In this meeting, you discuss partnerships and not just products. When you have a partnership, price is less of an issue.
Help The Buyer Achieve A Personal Win
Since procurement is part of the process, you have to work with them, not against them. The next time you meet with procurement, ask yourself, “What represents a personal win for this buyer?” People are more open to a value-added solution when you help them achieve their personal objectives.
Everyone has personal wins. Consider these personal wins for procurement:
- impressing a new boss
- getting promoted
- total cost savings
- supplier development
- cost-cutting initiatives
- supplier diversity
- better logistical support
The goal of procurement is to manage total cost and minimize risk. A cheap price is a tangible way to manage total cost. It is easily shown as proof on the invoice. Procurement people, like salespeople, will take the path of least resistance. A cheap price is the path of least resistance. Help the buyer take the road less traveled. Provide procurement with proof that your solution is worth more than a cheap price.
Procurement is not the enemy, they are the customer. They want to do what is best for their company. As a value-added salesperson, your objective is to help the customer make better long-term purchasing decisions. Help them do the right thing.
Paul Reilly is president of St. Louis-based Reilly Sales Training, a privately-owned company specializing in training sales professionals, sales managers and service professionals by offering public seminars, in-house sales training programs and hiring and training assessments. Contact Paul at 636-778-0175 or [email protected].