You’re in a sales role? You meet with professional buyers on a fairly routine basis? You think you understand them, and their interests…. really understand them? Well, let’s take a few minutes to think about that.
Salespeople rightly take pride in their ability to build new relationships, deepen existing ones, and influence a wider set of decision-makers at the customer. Some are seen as the ‘hunters’ of business, encouraged to think independently in the chase for new business from prospects, and where personal resilience is one of the keys to success. To a large extent, this also goes for the so-called ‘farmers’; the professionals focused on protecting and retaining business with existing customers, whilst also being on the lookout for growth opportunities in the account.
However, one of the toughest Sales challenges in business today (certainly in relationships – although it’s fair to say that digitisation and the shortest product life cycles in history are at least equally challenging) is in suppliers’ ability to deal with procurement professionals; those who seemingly perpetually demand improvements in value for money. That requirement for greater value for money, to sales people, often feels more like a crude demand for price reduction (and in truth, sometimes it is).
So what should sales and key account managers do to respond to this challenge? Well first, procurement is certainly not going to go away. The supply chain management and outsourcing revolution of the last twenty-five years is arguably the modern day equivalent of the industrial revolution, and procurement professionals are at the heart of that revolution. When your business model is heavily reliant on third party suppliers, and most businesses are (the estimated average is around 70% of the cost of sales), then it’s no wonder that the procurement profession continues to grow in status and influence.
Moreover, the way the procurement profession has developed, it has created a set of business practice norms where customers are increasingly ‘joined-up’ in their approach to the supply base. Cross-functional category management, negotiation, and supplier management have increasingly become features of today’s customer landscape (although my procurement colleagues will admit that there’s much progress still to be made in this regard). Nevertheless, it’s hardly surprising that relationship-focused salespeople are finding their roles even more challenging than previously.
One recent example from one of my sales training workshops came from an experienced account manager who reported that, despite months of effort nurturing relationships with contacts within the customer’s technical and aftersales departments, Procurement entered the scene. Very quickly the buyer started to dismantle the account manager’s value proposition, whilst virtually ignoring pleas from the other departments not to compromise on the technical specification or the promises that had been made to collaborate on aftersales marketing. It was evident that the goal of the buyer was simply there to secure a discount or cost reduction to hit a seemingly arbitrary savings target.
The account manager’s frustration was unrestrained, claiming that procurement “just don’t get it; they show little interest in what we do, and they certainly don’t appreciate the value that we can bring to the relationship”.
However, I think my account manager friend is missing an important perspective.
Unlike the typical account manager, procurement people are more often than not generalists rather than specialists. This notion of buyers being like a ‘Jack of all trades, master of none’ is often missed by sales people who themselves are frequently assigned to a single account or a low number of customers to manage. Their procurement counterparts are more likely to be interested and active in a much wider range of categories and suppliers. For instance, a buyer (or even a CPO) may be negotiating with a telecoms supplier one week; a facilities management company the next, and a components supplier a couple of days later. Unless the buyer develops category-specific knowledge (and there are some, often consultants or interims), then the typical buyer cannot hope to match the product and service understanding of a supplier’s salesperson or account manager.
Whereas an account manager often has such knowledge and relationship-building skills in abundance, the buyer instead relies on the process-oriented method of category management; taking the measured, step-by-step approach to understanding supply markets, sourcing options, the tendering process, followed by negotiation and contract award. Consequently, buyers are pretty agnostic when it comes to the choice of supplier, except in respect to amount of quantifiable value that can be secured.
With procurement adopting standardised and consistent process-oriented approaches at the same time as the sales person is looking to build the relationship, then it’s hardly surprising that each sometimes fail to understand the pressure and priorities of the other.
So what should the salesperson/account manager do to bridge this divide, and engage more effectively with procurement?
For a start, it might be useful for account managers to accept that buyers will rarely be excited by the supplier’s product or service, or be that interested in developing a deep relationship. Being realistic about the scope for relationship development can enable the account manager to make wiser interventions with the buyer. Furthermore, if you are an account manager, accept that you may have to repeatedly educate a revolving door of different buyers who take on responsibility for the spend category you serve. It will get frustrating from time to time, but recognise there are limits to the buyer’s appreciation of what you and your business can bring to the customer’s business.
Secondly, it is worth knowing that procurement’s preferences will most frequently be towards low risk or ‘no-risk’ value propositions that are easy to implement and gain advantage from. Given a choice of a simple quick-win, versus a complex supplier solution requiring a lifetime to implement, the buyer will most vigorously pursue the former, even though the latter may promise more significant long-term benefits. So think about how impactful your value proposition is in the here and now, including its impact on the buyer’s goals.
Thirdly, and more generally, salespeople would do well to work to better understand procurement’s agenda; the buyer’s priorities, difficulties, challenges, targets, and the like. I still find it remarkable how little interest some key account managers take in procurement, despite knowing the function has an increasingly major role to play in the buying decision. Be more enthusiastic in your engagement with the buyer and, perhaps, a little more curious.
Those account managers who do engage and seek to understand the procurement world will learn some valuable lessons, and even (at least potentially) create a new ally in the customer’s business. Don’t expect just more and better ‘relationship selling’ though; it’s going to take time and serious effort to see your world from the buyer’s perspective.