Are you in B2B sales and do you often feel that your negotiations with procurement professionals could have gone better? If so, you are not alone. Procurement functions in mid-sized and large companies have steadily gained more influence and power. And to ensure they deliver results, procurement people are now very well trained in the art of negotiation. So, where does that leave you as a B2B sales person? How do you get the upper hand in negotiations? That’s the question I’m answering in this article.
Negotiations with Procurement is, in fact, one of the things I spoke to award winning B2B Sales performance coach Rick Lambert about when I was invited as a guest on the SMarketing Show podcast. The show is co-hosted by Melissa Theriault, and in addition to discussing negotiation, the three of us also talked about Requests For Proposal – how sales people can influence the requirements and ultimately win the deal.
Rick estimates that less than 5% of sales professionals have had any negotiating training whatsoever. And yet 80% of them have some variable component to their compensation that’s driven by profit. On the procurement side the picture looks very different. My estimate is that almost all procurement professionals will have received some form of negotiation training. So, what can B2B sales people do to stand up to the better skilled procurement folks? Well, there are 3 key things that I’d like to highlight.
Know the other side as well as you know yourself
The first is getting deeper insight about Procurement. Knowing as much as possible about the person you negotiate with is always good advice. It’s no different when the person on the other side of the negotiating table is a procurement professional. And these are the types of things you need to know:
- What makes the procurement professional tick
- What they are rewarded for achieving and how they are rewarded
- What misalignment there may be between Procurement and stakeholder views
How do they think?
Secondly, getting inside the head of procurement professionals – understanding how they think – is very helpful. The biggest change that has shaped procurement thinking over the past 20 years is the evolution of Category Management. Category Management is a strategic way of looking at all the company’s external spend. This common, and almost universally adopted, methodology has helped create widely adopted paradigms around things such as collaboration with the Economic Buyer, supplier performance and supply related risks.
NOTE: This webinar will only be available until 10 January 2023. Don’t miss out – register now!
Understand their most common tactics and ploys
The third thing you can do before facing Procurement at the negotiating table, is to be aware of their most common ploys and tactics. Think of all the tactics you have already been at the receiving end of and brainstorm more effective ways of dealing with them the next time around. When you come across a new tactic, add it to the list and do another brainstorm. These could be tactics such as: the good cop vs. bad cop routine; presenting you with unfair contract terms or; the salami tactic of extracting concessions from you slice by slice.
If negotiations with Procurement is an area where you want to improve on, then you could really benefit from subscribing to my LinkedIn newsletter called, “Selling to Procurement”. I share new tips and insights every week and you will NOT be asked to enter an email address to subscribe. Just click here, and once you are on the LinkedIn platform, hit the subscribe button.
