Winning With Procurement
I have seen the enemy.
And it is procurement.
So says pretty much anyone who has had anything to do with procurement departments of larger clients/prospects.
We’ve too have grumbled under our breath many times when we’ve been forced to fill in seemingly endless pro-forma documents because “that’s what procurement needs”.
From the outside looking in, procurement seems to run counter to the ideal of building relationships and bringing creativity and innovation to companies that desperately need it.
While it’s easy to view procurement as a speed bump on the road to landing whales, there’s more to the procurement process than meets the external supplier’s eye.
There are four fundamental tasks that procurement departments have within a corporate:
No mention of price.
A simplistic view for many of us questing suppliers is that procurement is looking for the cheapest price.
Maybe not.
Grosvenor’s ‘2023 State of Procurement’ Research of Australian procurement executives, found that ‘Enhancing the Value we Deliver to External Customers’ (24%) is more important than ‘Reducing Cost (13%).?
Another worthwhile insight on how you’re viewed by procurement is to understand where your offering sits on the Kraljic Matrix.
As with most matrixes, you want to be in the top right. The more strategic your offering is, the more important you are to the organisation.?
On the other hand, If you’re selling pens and reams of printer paper, it’s the bottom left for you.
Not that it’s break out the bubbly time if you’re offering consulting or creative services.
There are literally thousands of competitors trying to get your potential whale’s business at any one time.
Here’s what you can do to get the jump on most, if not all of them:?
1. Get to Know The Wonderful People in Procurement:
Before engaging in negotiations, take the time to understand the procurement department's objectives, challenges, and decision-making processes.?
Research their industry, get to know their purchasing guidelines, and identify key stakeholders within the procurement team. What’s their background and professional experience.
No matter what processes are in place, business still comes down to people choosing to work with other people.
You should – ideally - establish relationships with the procurement executives that are relevant to you and give them the respect that they deserve.
Doing this makes it SO much easier for your internal champions to sell you in.
We’ve picked up business with several whales by going to the key procurement contacts and formed positive relationships with them BEFORE we even spoke to any internal marketing prospects.?
You need to understand where the power lies.
And in many organisations, it lies fairly and squarely with procurement.
2. Offer Something Unique:
Here’s advice I received from a senior procurement executive: “Identify what brand you’re passionate about and come back to us with ideas / strategies / opportunities that no-one else has thought of to help us to grow that brand.”
While this sounds like a genius way in, there are risks associated with this approach.
You may be off strategy, the brand team may have no available funds, they may be locked in with existing suppliers, and, heck, they could think that your ideas suck!
But conversely, the proactive approach could also get your toe in the door and help you to form a relationship with that company that could last for years and generate millions of dollars.
There are lots of ways to do it.
One of our clients negotiated to get two free cars from a vehicle manufacturer as prizes if they could find an FMCG company that was willing to run an on-pack promotion, with the cars prominently featured.
It took virtually no time for our client to find a new client willing to stump up the $100,000 needed to run the promotion.?
3. Prepare to be Scrutinised:
If you want to work with bigger clients, you will be scrutinised.
It’s the job of procurement professionals within those companies to review potential vendors and their offerings rigorously.?
Anticipate what they may want, need and/or object to and you’ll be better prepared for the inevitable inquisition.
Ultimately, you need to be armed with data, case studies, and testimonials to support why they should work with you.
4. Start 18 Months Ago:
The best time to start romancing your prospects is 12-18 months before you expect to close the deal.?
Yes, we all want to make a call today and start working with them tomorrow - or even this afternoon - but the reality of many whales is that it takes time to get in the door.
Think of it as a romance (I wrote a book about this strategy: Customer Romance. How to Build Your Brand One Customer at a Time).?
You didn’t ask your spouse to marry you the very first time you met.
The same applies for your prospects in procurement and any other relevant departments.
The simple calculation is this: the more relationships you start building today, the more opportunities you can look forward to in the future.
5. Highlight the Value You Offer:
While we don’t want to focus on price too much, convincing any potential client that you offer value for money is the reality for everyone.
With procurement in particular, you need to emphasise the broader value proposition of your product or service. Highlight the tangible AND intangible benefits you offer, such as increased efficiency, improved productivity, or enhanced quality.?
As long as you’ve done a good job of differentiating yourself - see above - price can become less of an issue.
If you have any issues in reviewing your point of differentiation, getting around the pricing requirements of the procurement department, or need help to ensure this is not a roadblock to landing your whale client.
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