Selling to Procurement 5 Strategies for Win-Win Negotiations Why Procurement Matters to You

SELLING TO PROCUREMENT 5 STRATEGIES FOR WIN-WIN NEGOTIATIONS WHY PROCUREMENT MATTERS TO YOU

In recent years, more and more organizations have shifted to their only consideration when making a purchasing decision.) procurement as a central driver, not simply to cut costs and On-time delivery, performance, and ability to meet required source supplies, but to streamline operations and even uncover specifications were ranked over price by survey participants. new sources of revenue. The key to working successfully with procurement is Dealing with procurement more frequently isn’t understanding the process they execute, their goals, well received by most sellers, who commonly “Price is and what they expect from a vendor relationship. regard procurement professionals as the no longer the Sales professionals must enter the buying adversary—there only to identify the lowest process early, develop a deep understanding cost provider and squeeze profit margin even sole driver of of an organization’s purchasing process, and further. purchasing sell and negotiate with transparency in order to come out on top. The conventional stereotype of procurement decisions.” professionals as “number-crunchers” is becoming We surveyed 138 procurement professionals to less relevant as organizations begin to rely more heavily understand their purchasing process and expectations on them to create value rather than respond to cost pressures. they have when dealing with vendors. In this research paper we’ll reveal our findings and the 5 strategies sellers must Price is no longer the sole driver of purchasing decisions (our execute to succeed and get to the yes faster when dealing survey results reveal only 7% of respondents cite price as with procurement.

INDUSTRIES REPRESENTED: Manufacturing Government MANAGER OTHER* DIRECTOR C-SUITE Healthcare Retail 57% 26% 10% 7% Construction Food & Beverage

Education <1 year Financial Services IT/Technology 1-3 years

Agriculture 3-5 years Energy/Oil & Gas OEM with Distribution 7-10 years Professional Services 10+ years Transportation Other PROCUREMENT EXPERIENCE

*Roles included procurement analyst, administrator, specialist, associate, etc.

© The Brooks Group. All Rights Reserved. | TheBrooksGroup.com | 800.633.7762 When does results reveal is the most common procurement enter scenario) sales professionals should the buying process? avoid entering negotiations too soon, even if procurement pushes Sellers must make connections for a price quote up front. They as early in the buying process as should focus first on understanding 67% 18% possible—ideally in the Awareness business needs and building value. or Consideration stage, in 1 which the buyer is beginning to When procurement enters later in understand their challenge and the process, a sales professional’s At the beginning of Midway through the explore potential solutions. opportunity to develop a relationship the buying process, buying process, during is diminished. To combat this, during the needs vendor solicitation and Through proper questioning, sales sales professionals should invite identification evaluation professionals can determine where procurement to the table as soon the procurement professional is as they identify they will play a role in the decision-making process, in the decision-making and even walk them Strategy #1: process (even if they’re backwards (if necessary) Make only there to observe.) to make a collaborative procurement diagnosis. relationship Regardless of which connections stage of the buyer’s Engaging in a early in the sales 10% 5% journey sales reps collaborative diagnosis process. enter, they must of the challenge gives ask smart, targeted questions sellers a greater chance of closing to fully understand the Late in the buying Other* the sale. They can focus on selling organization’s purchasing process process, once a *Other answers indicated value, instead of responding to a and procurement policies. solution and vendor being involved in every request for a quote or proposal. Understanding the process will has been identified stage of the process help them navigate it successfully. When procurement is involved from the beginning (which our survey

© The Brooks Group. All Rights Reserved. | TheBrooksGroup.com | 800.633.7762 How many Training for the complex sale will stakeholders are enable sales teams to navigate involved in the multiple layers of decision makers— purchasing process? ensuring they have a place at the table when purchasing decisions are made or RFPs are written. In today’s complex selling environment, multi-person decision What if procurement doesn’t2 allow making units have become standard. access to other stakeholders, even if the sales professional tries? In With more stakeholders involved, this case, sellers must be vigilant in sellers must be capable of quickly understanding the decision-making mapping out the decision-making process, as well as the needs and unit—and approaching each priorities of the other stakeholders. influencer in the most effective way. Successful sales professionals will seek to develop advocacy with Strategy #2: procurement and equip them to sell Understand the stakeholders and on their behalf. organizational dynamics, including decision makers at all levels.

Each person on the committee will play a different role and have a different set of motivators. It’s a sales professional’s job to identify these roles and cater to the wants, needs, and behavior styles of each.

© The Brooks Group. All Rights Reserved. | TheBrooksGroup.com | 800.633.7762 How important are the following elements when considering a purchase? On-time delivery, availability of product/ service when needed

Performance; ability to meet required specifications 3 Price

Manage risk and avoid mistakes

Lifecycle costs of product or service

How often is price the only consideration in Relationship with vendor salesperson making a purchasing decision? Post-sale customer service and support

Price is rarely the only consideration for making purchasing decisions. Flexible financing or payment terms

Each year the conventional stereotype of procurement professionals as “number-crunchers” is becoming less relevant as they play a growing and integral part of sourcing and securing value for their organization.

A mere 7% of respondents indicated that price is their only consideration. What the surveyed Strategy #3: procurement professionals value over price is on-time delivery, availability of products and Recognize the needs, services when needed, performance, and the ability to meet required specifications. However, wants, and priorities sellers may receive price push-back when they have failed to create enough value for these of procurement elements in the mind of the procurement professional. Sellers should ask enough questions to professionals, beyond thoroughly understand procurement’s decision criteria, then use this information to present a just the lowest price. more valuable proposal to justify a premium price.

Price cutting is avoidable as long as a sales organization is able to deliver on quality and value.

© The Brooks Group. All Rights Reserved. | TheBrooksGroup.com | 800.633.7762 Which benefits would justify a higher focused sales process, they are better able to level set with purchase price? procurement professionals about next steps and procedures and avoid coming off as manipulative or self-serving. There are several things that will justify a Strategy #4: higher price in the eyes of procurement—with Procurement professionals value working Sell and negotiate with transparency around the sale being at the top of with a vendor who saves them time and transparency. the list. frustration and is overall easy to work with. This speaks to the need for sellers 4to recognize Sales professionals must be upfront and transparent about buyer behavior style, adapt their communication approach their process when working with procurement professionals to match, and provide resources that align with a contact’s and any other stakeholders. When reps follow a buyer- personal preferences.

Vendor sells and negotiates with Vendor consistently delivers Vendor is easy to do business with; transparency on time saves you time and frustration 72% likely 66% likely 66% likely

Vendor salesperson helps you Vendor products/services perform as minimize risk or avoid mistakes promised 59% likely 59% likely

How easy is it to get a discount? CONCLUSION:

In order for sellers to come out on top when dealing with Strategy #5: Sales professionals give in too procurement, they must fully understand the rules that Don’t discount too quickly to discount requests. quickly. procurement professionals are playing by.

High-performing sales professionals are skilled at building The beginning stages of the sales process require sales value and negotiating strategically to avoid lowering price professionals to play the role of investigator: to ask and sacrificing profit margin. They recognize procurement questions in a way that uncovers the most information negotiation tactics and avoid the common mistakes that invite possible while making the procurement professional feel procurement to ask for discounts. confident and heard, not interrogated.

Percent of respondents Their investigation will shed light on the purchase indicated that they process, allow them to map out the decision-making unit, typically ask for a and build undeniable value in the eyes of procurement. discount or price Give sellers a process and a playbook to follow, and they concession 1–2 times will break through barriers and navigate the modern before receiving one. procurement organization with much greater ease and 70 success.

© The Brooks Group. All Rights Reserved. | TheBrooksGroup.com | 800.633.7762 Michelle Richardson Vice President, Sales Performance Research Michelle Richardson is the Vice President Areas of Expertise: for Sales Performance Research. In her role, she is responsible for spearheading indus- • Direct and Channel Sales try research initiatives, overseeing consulting • Sales Leadership and diagnostic services, and facilitating ROI • Coaching measurement processes with partnering organizations. Michelle brings over 25 years • Negotiation of experience in sales and sales effectiveness • Complex Selling functions through previously held roles in • Sales Strategy curriculum design, training implementation, • Talent Management and product development to the Sales Per- formance Research Center.

Deveise Gregory Senior Design and Development Strategist

Deveise Gregory is the Senior Design and Areas of Expertise: Development Consultant at the Sales Per- formance Research Center. Deveise plays a • Needs Analysis • Instructor-led Training pivotal role in conducting research initiatives • Web-based Training as well as collaborating and consulting with • eLearning organizational leaders to identify challenge • Gamified Instruction areas and solutions for overcoming them. • Microlearning Deveise brings a wealth of expertise to the • Multimodal Learning Sales Performance Research Center gained • Simulations from designing and developing training con- • Participant-centered Activities tent for global and enterprise organizations.

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