Good old Kenny Rogers, he gave us some great advice through the lyrics of the ‘The Gambler’: advice that stands true beyond the gaming table. Sometimes the best advice comes from the least expected place, and I have some advice for procurement professionals – from sales.
Every week, I take a break from supply management topics to learn about sales through webinars, white papers and blogs. Officially, I do it for ‘The Flip Side’, a Buyers Meeting Point resource that helps procurement professionals better understand their sales counterparts. Unofficially, I do it because creativity and objectivity can be elusive, and listening to sales’ perspective helps.
This perspective has changed the way I see the role of the individual procurement professional, the role of the department, and how we should leverage non-traditional approaches in search of better than usual results.
We are all in sales.
I used to see sales people as professionals compensated for closing deals. But contracts are a side effect of an effective sales process. The core of the sales process is quickly and accurately diagnosing opportunities for improvement and then winning over prospects to the recommended solution.
Procurement does this all the time – or at least we should. We ‘sell’ finance on a new opportunity to drive efficiency. We ‘sell’ the executive team on the strategic advantage we represent as an in-house dedicated function. We ‘sell’ internal stakeholders on the merits of a new supplier or a standardized specification that will save money.
The key is to be a quick study, sometimes adapting mid-meeting, in response to organizational requirements. We must prove we understand the challenges at hand, sometimes to colleagues that don’t have a clear perspective themselves. Once you accurately articulate a problem, brainstorming can begin on solutions to be ‘sold’ to internal customers.
Sales people believe buyers have the advantage.
I benefit the most from the Q&A that takes place during sales webinars. What do sales people really think of procurement? What kind of advice do they get from their mentors?
I’ll over-generalize to make a point: sales people see procurement professionals as a steely cold bunch. (One webinar participant commented that procurement conference rooms and offices are the coldest places on earth…) Our poker faces have apparently done the trick, because many sales people would like to check our backs for control panels to make sure we are human.
Sales believes procurement holds all the cards in the negotiation process. I have heard our advantages repeated multiple times from different sources: “Procurement already has access to so much information that we struggle to appear well-informed about our own market.” “We can’t enter the sales/buying process until they decide it is time for us to start participating.” “Procurement is so active in their use of social networking during the purchasing process that we are outpaced by our customers.”
Sales can compete on value creation.
We know that negotiating cost savings is no longer enough. We need to create value for the organization. We hear it from executives, associations, publications, and thought-leaders. Knowing how to get started is a challenge because every situation and opportunity is different.
Successful sales organizations evolved in response to the need for value creation a long time ago. With strategic sourcing came apples to apples comparisons on price alone. Suppliers couldn’t refuse to provide pricing, so they tried to influence the decision-making process by proving themselves of such value that they broke the mold.
The time has come to recognize supplier innovation. The increased focus on value by our corporate leadership, and the ability of sales to speak their language, will either open a door for procurement or clear a path right past us. If a sales person sees an opportunity to bypass procurement and reach the right execs, they will take it. Capturing value does not mean surrendering in the battle over price, just balancing costs and benefits. In that scenario, I want to be the one holding the scale.
Looking back and ahead.
The big-picture realization from my year of visits to The Flip Side is that the procurement/sales relationship is not about us v. them but about all of us. They feel the same stresses we do, and often see us in the driver’s seat when we think they are driving. They aren’t terrible people (mostly) any more than we are bloodless cost reduction zombies.
We can’t fully collaborate with sales in every category, but when the conditions are right, partnering with a supplier is the only way to a better solution. It goes against most of what we know about creating competition and harnessing the forces of the market, but recognizing opportunities for collaboration can be the difference between tactical and strategic category management. After all, ‘Every hand’s a winner, and every hand’s a loser … the secret to surviving is knowing what to throw away and knowing what to keep.’