Using Tailwinds to Your Advantage When Selling Into Procurement

One thing we’re always taught to consider from the start in evaluating companies for M&A purposes is to think about targets in the context of what are known as industry “headwinds” and “tailwinds''.?

Headwinds are somewhat obvious.?

If you want to go purchase a new Honda Odyssey (people mover) on the dealer’s lot in North America, one of the headwinds a consumer would encounter is not enough supply -- owing primarily to chip shortages impacting production capacity. Get ready to wait in line or pay $7,500 over MSRP for that mandatory dealer-installed clear coat paint, premium floor mats and rustproofing that you never knew you needed.?

That’s an actual headwind in the consumer and even fleet markets at the moment (and an unfortunate example of how dealers are getting away with obnoxious mark-ups to capitalize on the situation).?

As for me, I also like to think about using tailwinds in my personal life just to stay in practice.

Since my kids have gotten older, I sold my last and final minivan -- I confess to having owned three Honda Odysseys in a row -- earlier in the month.?

That chip shortage? A tailwind, at least for me.?

I took exactly $1,600 of depreciation over 50K miles in a little over 3 years thanks to an offer from Carmax I could not refuse last week.?

Granted, I’d call that a headwind for the ultimate buyer of that vehicle who is going to be paying more thanks to externalities that I even paid new. I’d also recommend OSHA certified disinfecting of the thing as part of their total total cost calculation (that goes for my previous minivans too).

But I digress. Tailwinds may be less smack-you-in-the-face obvious than the headwinds keeping you from that “car” you never wanted but desperately need with the addition of the latest little one.

Tailwinds work in favor of the target or opportunity you are analyzing or someone is considering buying from you (rather than against). Examples of tailwinds for a procurement technology vendor that targets risk management might be:?

• Policy trends that are currently favoring highly regulated supply chains and traceability?
• Declining credit ratings of suppliers
• Increased levels of fraud within a supply chain
• News headlines that can really impact whether the end customer decides to buy from you or someone else (e.g., a child labor scandal at a lower tier supplier)
• Extended lead times from current suppliers necessitating the qualification of new ones you have never worked with?

And so on.

But surprisingly, many technology providers -- including those selling procurement technology wares -- are not as strong as they could be at taking advantage of tailwinds in the buyer’s journey. Here are some tips:?

• Focus top of the funnel content (webinars, blog posts, whitepaper downloads, etc.) on meaningful (KEY WORD HERE!) examples of what organizations (ideally customers) are doing to address specific tailwinds. Bring the tailwinds alive. Don’t just say they exist. Personify them! Examples. Human and emotional elements. This creates affinity, trust, and starts the discussion based on transferring real knowledge the prospect can use.
• In the mid and later funnel, quantify the value of the solution not only in terms of generic returns (quantitative / qualitative), but as tied to the specific tailwinds for geographic, industry, organizational functions or other demographic elements. An example for an ESG solution when selling into finance might be the loss of potential capital market investors -- and its impact on equity values -- in countries/regions where CSR/ESG supply chain standards are becoming a consideration in investment in which certain organizations have made and attested to investments and others have not.
• Train reps when they engage to arm the prospective customer (very much an SQL at this point) with facts, stories and insight the prospect does not have (in one place) so they can fight the battles for you to push the deal forward internally. Make sure you are positioning them as teachers who can add value in the discussion of the impact of tailwinds vs. parrots of features/functions.

Make sense? Using tailwinds to your advantage in sales to procurement is one of those somewhat obvious things that is not obvious until you’ve actually done it.?