Five Strategies to Break Through Barriers When Selling to Procurement

Blog99_SellThruProcurement_1-1I often hear from my clients the challenges they face with procurement departments in the prospect buying process. Companies these days are setting up a buying process for everything they do. And it’s no surprise.

As an advocate of the goal to simplify complex sales, I’ve spent a lot of time decoding the complexities of procurement. Procurement departments are more powerful, more sophisticated, and more focused on commoditizing every aspect of our sales solutions. The sales professional who deals with procurement endures an ongoing struggle burdened by third party negotiators, blind RFPs, reverse auctions, commodity pricing, and hardball negotiating tactics from procurers measured on cost savings.

So what can sales professionals do to avoid having their solutions commoditized?

Let’s first try to understand the role of procurement and what objectives procurement managers follow to fulfill their roles. Walk in their shoes a moment. After all, they want to buy, and we want to sell. We want to win complex sales despite the dreaded RFP. Let’s find common ground and be better positioned to work with them and achieve a successful sales outcome.

Below are five goals pursued by procurement together with corresponding counter strategies you can use in response:

1. Procurement Doesn’t Grasp the Value Proposition You’re Proposing.

Procurement Goal:  Procurement’s goal is to get the best deal for the company. These managers do not have to live with your solution. Their focus is to get the best price based on the criteria for the solution that was set by an internal committee or the business unit.

They attempt to discredit or decouple all of the value you have worked so hard to build with the business unit buyer. Procurement’s goal is to demystify your value proposition so that it can then compare prices among vendors. Procurement would like to focus on pricing and get the “best” deal, rather than look at the value of the overall deal.

Your Sales Strategy: You need first to understand all of the buying influences surrounding your solution (users, technical and the economic buyer out of whose budget payment will come). You need to understand what each influencer’s vision or concept is for the ultimate solution. The user buying influences are going to have to live with your solution after the deal is signed, so it is really important to get these people on your side. In this situation, you also need to develop strong coaches and present a compelling business case for your solution. Start early, and cover all of the bases with the buying influences.

2. Procurement Wants Control of All Responses and Commoditize your Solution

Blog99_SellThruProcurement_1-2Procurement Goal:  I’m sure you’ve received direction from procurement not to contact others within the organization. This warning is their attempt to take control of every aspect of the sale so they can avoid surprises and do an apples-to-apples comparison with your competition. The problem is, your apples are different, and you need to convince the buying influences of this in the first place or you will never get past the comparison spreadsheet.

Your Sales Strategy:  Not all the features and benefits of your solution will be relevant to the prospect’s needs. In this situation, you need time with the other buying influences to increase the impact of your message. Of course, you do that by describing only the features and benefits related to the need you intend to satisfy.

Blog99_SellThruProcurement_1-3You need to quantify the overall value of your solution and present a total solution that can’t be dismantled into component pieces, and thus commoditized. Educate the business stakeholders and Procurement on why your solution is different and restate your value proposition often. To maximize the impact of your solution, link your features and benefits to the need behind the need (discussed next). By doing so, you will articulate how you can help the prospect achieve what’s most important to him or her.

3. Procurement Wants to Limit Access to Business Units and Other Decision Makers

Procurement Goal:  As we discussed, Procurement would like to control all aspects of the deal, including to whom you speak. It doesn’t want to get blindsided by a business unit leader making a business decision that undermines or supersedes the procurement process.  Procurement hates surprises.

Your Sales Strategy:  For the most part, Procurement doesn’t go out to bid without someone or a business unit wanting to fix, accomplish or avoid something. Prospects have needs because of circumstances that surround them. Examples:

  • Declining revenue

  • A new competitor

  • A new management team

  • Changing customer demographics

  • Rising costs

  • Need to retain employees

  • Need to conform with regulatory mandates

The more important the objective behind the need, the better you can position yourself with others within the organization.

When a prospect has a need, there’s a reason why the need is important. By asking questions of others, you can uncover the need behind and be confident you’re working on what’s really important to the prospect. This need behind the need is really what will drive your opportunity to attach your solution with differentiation. It is often related to one of three areas:

  • Finance: The need to increase revenues, lower costs, or improve sales.

  • Performance: A desire for improvements in efficiency or effectiveness of work processes.

  • Image: A need for improvements in how the organization is viewed by the public, current or potential customers, or other stakeholders.

Blog99_SellThruProcurement_1-4An example illustrates—A company considers outsourcing its payroll and employee benefit programs, with a stated need “to reduce labor costs.” But if you question and probe further, you might find that finance is under pressure to lower costs and improve the company’s margins. That’s really what is driving the decision to outsource, or at least consider it. I might ask finance, “It’s my understanding that you are interested in reducing labor cost, is that correct?” “Tell me, what is driving that?” Listen, you will hear the need behind the need.

This is why it’s so critical to build a strong network within the business organization in order to find out who is driving the decision process and what is the real need behind the need. Leverage inside and outside resources to help you get the lay of the land before Procurement puts a gag-order on the vendors.

If you are told you can’t contact anyone outside of the RFP process, you have a business decision to make in terms of the risks and rewards of following those rules.

Most business decision makers aren’t aware of these rules and may not agree with them, especially if you have had prior contact with them. If you find that you are responding to an RFP, and you don’t have any other business relationships within the organization or a complete understanding of the need behind the need, you should seriously consider your chances of success in this deal. Blind RFP responses seldom produce desirable results for the responding party.

4. Procurement May Want to Use Past Performance/History Against You

Procurement Goal:  Procurement would like to have as much ammunition as possible in their arsenal to use against vendors in an effort to drive down prices and negotiate a commodity deal. They are trained to research backgrounds on each vendor to determine if there is information that “can and will be used against” the vendor.

Your Sales Strategy:  If this is the case with your organization, you need to be proactive. Consider a pre-emptive strike to disclose negative information so that you are in control of the discussion.  Return the focus of the sales negotiation to the deal at hand and the overall value proposition your solution is bringing to the business.

5. Procurement Wants to Keep the Power and Leverage to Its Side.

Blog99_SellThruProcurement_1-5Procurement Goal:  Procurement would like to keep the power and leverage to its side, and they can do this by presenting additional decision makers or hoops to jump through late in the process. This power dance keeps the vendor guessing, and vendors are then often forced to renegotiate the deal late in the game when the clock is ticking to get it done.

Your Sales Strategy:  As we discussed earlier, you must focus early and determine who all the decision makers are and how the decision will be made. Map out a time line for the decision process and ask the prospect to respond to the schedule. This technique helps to highlight any additional steps that may need to be addressed, as well as helps prepare you for what ahead.

If you can develop a coach early in the process, you should cut down on surprise decision makers showing up late in the process. Procurement wants to keep all of the vendors in the game as long as possible in order to provide leverage against the competition. Remember Procurement wants us there. We typically have more power in this situation than we give ourselves credit for.

These behaviors above are just a few of the sales negotiating tactics commonly used by Procurement. RFPS don’t have to be barriers to your ability to win complex sales. As a sales professional, we must treat Procurement like any other buying influence. The mistake most salespeople make is to drop the step in the sales process of working with all the decision makers by simply responding to Procurement. Bad move.

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Remember, in professional selling, we are always selling a solution that will help your prospect fix, accomplish or avoid something. Your prospect has needs behind his need which you can solve. Please don’t let this symbiotic relationship be diminished or commoditized by an overzealous procurement department.

Your takeaway?  Build your case deep and wide in the prospect organization, keep Procurement and its needs in your side mirrors, and follow your map to success.

For more information dealing with the download and read our white paper, “Treat RFPS Like Unpolished Diamonds.”

See you on the upside,
Bill

For more information on how to simplify the complex sale, go to www.pleinairestrategies.com
Or call Bill in San Diego at 760.340.4277 or 213.598.4700

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