how to avoid being commoditized by procurement

5 Tactics to Use with Procurement

SALES NEGOTIATIONS:

• Dealing with third party negotiators

• Blind RFP’s

• Reverse auctions

• Commodity pricing

• Hardball sales negotiating tactics

Sales negotiations with Procurement is an ongoing struggle:

By understanding Procurement's objectives…

It’s easier to work with Procurement and achieve a successful sales outcome

5 Common Negotiating Tactics

used by Procurement and their

Counter-Tactics

Deflect or Discredit your Value Proposition

1PROCUREMENT TACTIC:

To deconstruct your value proposition so that they can then compare prices among vendors

PROCUREMENT GOAL:

Build stronger relationships with the business unit buyer

COUNTER TACTIC:

Develop strong customer coaches and present a

compelling business case for your solution

COUNTER TACTIC:

Commoditize and Control Responses

2PROCUREMENT TACTIC:

Procurement want to do an apples-to-apples comparison with your competition

PROCUREMENT GOAL:

You need to convince the business unit buyer

your product is different

COUNTER TACTIC:

Employ a value based sales approach that quantifies the overall value of your solution

COUNTER TACTIC:

Present a total solution that can’t be dismantled into component pieces and

commoditized

COUNTER TACTIC:

Limit Access to Business Contacts

3PROCUREMENT TACTIC:

Procurement doesn’t want a business decision that undermines or supersedes the procurement process

PROCUREMENT GOAL:

Build a strong network within the business organization

COUNTER TACTIC:

Leverage inside and outside resources before Procurement

puts a gag-order on the vendors

COUNTER TACTIC:

If you’re told you can’t contact anyone outside of

the RFP process...

...you have a business decision to make in terms of the

risks and rewards of following those rules

Use Past Performance Against You

4PROCUREMENT TACTIC:

Procurement likes to have information about vendors to drive down prices and negotiate a commodity deal

PROCUREMENT GOAL:

Be proactive. Anticipate issues and concerns that may come up and have your responses prepared

COUNTER TACTIC:

Good Cop/Bad Cop and Mystery Decision Maker(s)

5PROCUREMENT TACTIC:

Procurement present additional decision makers or hoops to jump through late in the process

PROCUREMENT GOAL:

Determine who all the decision makers are and how the decision will be made

COUNTER TACTIC:

Procurement wants to keep all of the vendors in the

game as long as possible in order to provide

leverage against the competition

Sales professionals typically have more power in this situation than realized

Don't let your sales solution be diminished or commoditized by Procurement

As a sales professional, you must be prepared to

counter these tactics…

…by planning, leveraging your relationships, and reinforcingthe shared interests and value proposition for your customer

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By Ray Makela

@RayAMakela