Procurement, Part II: A view from the other side
Friday, June 27, 2008/
The world of procurement is changing, and we’ve got to keep up. SUE BARRETT
By Sue Barrett
Following last week’s piece on procurement, I promised I would delve further into the view from the other side of the table and how, we, as sales people, view procurement and some of the practices that help or hinder sales and partnership effectiveness. And what our common enemy is.
So let’s take a look at the other side of the table.
Many a seasoned sales person can tell you story after story about the “gunna” customers: “Gunna do this, gunna do that” but it never goes anywhere.
Customers who spend very little with us but take up enormous amounts of our time, or who are really nice but we know they do not have the potential to develop into long-term revenue generating accounts for our business, in effect keep us from working with customers where we can get a better return on investment.
And the cost of the sales effort escalates.
Fit sales organisations are really looking at the viability and potential of customers and whether they are worthwhile working or not.
Fit sales organisations segment their customers and their markets and then work out the most cost-effective way to sell and service these customers, or not as the case may be. We have to work out what it costs us to get a sale.
Depending on the industry, it can costs an in-field sales person and their company anywhere from $1000 to $1500 per client sales meeting (that’s taking into account things like the cost of travel and time in the meeting – approx 1 hour). Given this cost we want to be very discerning about;
- How long it took us to get a customer on board.
- The value and potential the customer could give our business.
What we are guarding against is trying to sell to those customers who do not and never will meet our criteria for high potential and high value.
In sales it is just as important to know when to say no and walk away. It’s about how you use your time and effort.
I am sure you are aware that today business is a two-way street, and while customers have often been in the driver’s seat around choice of supplier, the balance of power is being readdressed and shifted to a more partnership arrangement.
Suppliers are now weighing up their options as well. For instance before we accept an RFP (request for proposal) or client brief many of us weigh up is it worth it working with that organisation or not?
Personally I believe that procurement is a public relations exercise.
Goods sales organisations will weigh up the cost of getting the sale. If your procurement process portrays your organisation as smart, easy-to-deal-with, enlightened, focused and disciplined, and you fit our criteria for potential and value, then we will put in the effort to work with you. If not then we will often go elsewhere for better quality sales. Unless we are working in a very limited market, we often have many customers to chose from in this global economy.
Making procurement processes too hard or unnecessarily complicated may limit a business from accessing the very tools, products, systems or advice they so desperately need.
For instance some of the recent e-procurement experiences I have had have been less than favourable. Meaning they failed to do the job. And wasted a lot of time, money and effort. Time, money and effort we could have been investing in better sales opportunities.
Just because a big company has a name doesn’t necessarily mean we want to work with them.
What good sales people would like is to be given a chance work with people in partnership not competition.
For all the “us” versus “them” that gets said about sales and procurement, we should all recognise the common enemy.
Isn’t men against women or sales people against procurement people. The common enemy is WASTE.
- Wasted resources.
- Wasted time.
- Wasted relationships.
- Wasted opportunity.
- Wasted ideas.
That is why I am finding more and more people saying they want to work with others (suppliers, partners and customers) in a spirit of cooperation, consultation and respect not competition or deceit. This personal insight and awareness makes for much better business relationships and much better business results for all concerned.
As the Buddhist saying goes: Without the cooperation and kindness of others, we cannot exist.
Sue Barrett is founder and managing director of BARRETT, a boutique consultancy firm. Sue is an experienced consultant, public speaker, coach and facilitator. Sue and her team are best known for their work in creating high performing people and teams. Key to their success is working with the whole person and integrating emotional intelligence, skill, knowledge, behaviour, process and strategy via effective training and coaching programs. Click here to find out more
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