In this first of five series on the different levels of decision makers, Paul lays out the strategy for selling to procurement buyers.
Show Notes
The procurement buyer’s job is more challenging than ever before.
They are the most price sensitive of all the decision makers. They’re just doing their job.
If price becomes an issue, call on your internal champions.
Be patient and supportive.
“Focus on making them….”
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How do I sell to procurement buyers?
(Transcribed from podcast)
Today we are kicking off a series. We’re going to talk about different types of decision makers. Now, most of my clients that I’m working with, they are selling to different types of decision makers, so, over the next five episodes, we’re going to dive deeper into each one of these different types of decision makers.
Before we do that, though, a quick shout-out to Andrea over at The Creative Impostor Studios. You know, when it comes to even starting a podcast, I know many of you might have ideas out there of a podcast you want to get started, or you’re a podcasting fan, and you wonder, ‘How did these things get started?’ Well, how they get started is, you call someone like Andrea. Andrea does an amazing job helping you launch the podcast. Everything you need from tech advice to just advice on what to do, she is there for you. So reach out to Andrea. We’re going to have a link over to her website on this episode’s webpage.
Also, in Value-Added Selling, we go into much more depth on the different types of decision-makers. We’ve got so much content in there. It’s your go-to guide on how to sell to any type of decision maker. We have a whole chapter dedicated to it. So make sure you pick up your copy of Value-Added Selling. Available on Amazon or wherever you get your books.
Let’s get back to the show. How do I sell to procurement type of decision makers? That’s what we’re going to focus on today. So many of you are selling to procurement-type buyers. These are professional buyers/purchasing agents, whatever you want to call them: material managers. Their primary role and responsibility is to procure product. When you think about what it’s like to be a procurement manager, what their concerns are, remember that for these individuals, they’re not your technical types, they’re not the end user or influencer typically. These are individuals who are receiving requisitions. They’re receiving material orders all day long, and they are constantly in this transactional world where they’re trying to take care and make sure that they have enough product on hand to get things done—to get things taken care of.
They live in this logistical, transactional type of world. So naturally, their needs are going to be short term. They’re going to be short term. They’re going to focus on the acquisition of product, not on the research of it, not on the usage of it, or the long-term value. They’re going to focus on the short-term concerns, which is basically, “Do you have it in stock?” “Can you get it here soon?” And then, “What’s the price.” Delivery is going to be key with them as well. Especially right now. I mean, their supply chains are disrupted. Their job is more challenging than ever before.
Typically, this is the most price sensitive of all the decision makers that you’re going to interact with. In addition to pricing though, they’re going to be concerned about ordering options, compliance to spec, terms, things like that. These are all the transactional things. And during normal times, when supply chains are humming along like they normally are, price is going to be one of their primary concerns.
I remember selling in the construction industry, and I went to go meet with one of my largest customers. And this customer was very interested in a new product that we had just launched. So I showed it to all the engineers, and we’ll talk about them next. I showed it to some of the higher-level decision makers. Everybody loved the product, including the end users—the people that were actually using it. But guess who didn’t like the product, the procurement person. And the reason why was because, first of all, it was going to create more work for them. They were going to have to switch out the material. They were going to have to create new purchase orders. They had to switch from ordering from a previous supplier to me, because we’re the only ones that had this product. They didn’t want to switch all this. And not only that, our product was more expensive. Our product cost more—the price was higher, and so that didn’t make them happy either.
In fact, I remember in meeting with this procurement buyer, she gave me the purchase order, and I said, “Well, the pricing on here is not correct.” And she said, “Well, no. I mean, that’s basically what we paid for this product before.” I said, “Well, it’s a newer product. It’s different.” I go, “Here’s the quote that I showed the engineering team as well as the project managers.” She looked at it and she said, “Well, the price is just too high. We’re not going to pay this.” And I’m kind of stuck in a hard spot, right? This is the person who issues the purchase orders, and she gave me one, but with the wrong price. And so I said, “Well,” I go, “This is the price. We’ve already had, approved through engineering. We’ve had it approved through the project management team.” And she goes, “Well, we’re just not going to pay that price.”
And so I had a choice. What am I supposed to do? And so what I decided to do was lean on my internal champions. These are the people that I showed the product to already that were on board with it, that liked it. They were able to talk to the procurement manager and convince her that, “Hey, this is the product we need to go with.” And then she paid the price. The key is, when you’re selling to a procurement buyer, it’s not that they’re being combative. And in that example, the procurement manager was not being combative. In fact, she was doing her job. Because what’s going to happen, they’re going to look at this, some of her purchasing decisions, they’re going to get audited occasionally, and if someone comes to her and says, “Hey, why are you paying more for this product we used to pay less for?” she’s going to have to explain that. She doesn’t want to have to do that. So, in that scenario, what we’ve got to do is we’ve got to stretch that buyer’s time horizon. We have to get them to think long term. If they’re thinking long-term, for example, if this procurement buyer could think long term and how our newer product was going to save on labor, then it would be easier for her to say yes. The key is, when you do sell to those decision makers, you’re going to need other decision makers on board—on your side—to help convince him or her to invest in your value-added solution.
What they really want—. When you think about what they need versus what they want; what they need is, they need on-time delivery. They need shorter lead times. They need favorable terms. They need ordering options. They need all those things. Price is going to be one of them. They’re going to focus on price. What they really want is they want something that’s easy to understand. They want something that’s going to be safe to purchase. And for this type of decision maker, remember, if they’re paying more for a product on paper, that may seem risky to them. So they want that stability, that security. What they don’t want: they don’t want a crisis; they don’t want you to make their life any harder than it already is; they don’t want complexity. They want it to be easy. So, they’re going to buy products that are easy to understand, that are safe to purchase, that are going to operate smoothly. Price is tied directly to its benefits—that’s what they’re thinking. So, you’ve got to be aware of that.
And as the supplier, as their partner, you’re going to have to be sincere with them: patient supportive. Those are the things that they want. So, hey, remember that. When you’re selling to those Level-I procurement-type buyers, that’s what they need; that’s what they want. You know what to avoid. They don’t want that crisis. They don’t want the call at 10:00 AM, or 2:00 AM rather, I should say, saying, “Hey, we’re out of product.” They want things to go smoothly. Focus on making them look like a hero and you’re going to build a great relationship.
Make it a big day.
