A typical Old School Procurement function has a reputation for treating everything they buy as a commodity. Most Procurement functions in large companies have evolved and are now much more advanced than that. Nevertheless, are they still treating the services you sell as a commodity? Sometimes that may very well be the case. So, what can you do about it as a B2B sales professional? That’s the question I’m answering in this article.
A while back I had exactly that same conversation with Florian Faes and Esther Bond on SlatorPod, the weekly language industry podcast. Being treated as a provider of commodity services by Procurement is a challenge that language translation firms in particular face. On the podcast we also covered a number of other topics, such as:
- Misconceptions service providers have of Procurement
- The concept of Category Management
- Trends in Procurement
Does Procurement truly understand your industry?
So, why are language services particularly prone to being regarded as commodities by Procurement? They are often regarded as commodities because they look like commodities – at least at first glance. The industry uses a per-word rate as a key component when pricing its services. So, it almost looks like a standard item you are buying for a standard price.
Then there’s the fact that there are thousands of translation agencies out there. And on the surface, they appear to be offering more or less the same thing. So, Procurement professionals can be forgiven for concluding we are talking about a commoditised market.
If you are a vendor or a user of translation services, you know better. It’s not a commoditised market. There are many other variables than the per-word rate to take into account when determining the total cost of a translation service. And when you dig deeper, you’ll see that what vendors are offering is often not directly comparable. However, the average Procurement professional doesn’t know that.
“Educate Procurement”, is the answer
And since they don’t know, it falls upon you as the B2B sales person, with the insights, to educate Procurement. You may not be in the translation industry. But if you are facing a similar challenge of your service being considered as a commodity, you also need to educate Procurement – show them a more accurate picture.
You may wonder why Procurement professionals don’t already have an in-depth understanding of all the dynamics in your industry. Well, what you sell may not be at the top of the list of what Procurement buys and, therefore, their level of knowledge will be shallow.
Translation services, for example, are typically a small part of a category that the procurement professional is looking after. It may be a sub-category of a sub-category. It’s therefore not feasible for them to invest too much time in proactively getting a deep understanding of the industry. It’s much easier to take a quick look at it, notice a few characteristics and conclude that it’s a commodity.
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…and you have to keep on doing it
What I sometimes hear from B2B sales people is that they do educate Procurement, and eventually their contact realises that the service on offer is not a commodity. But then a new procurement person takes over and you are back to square one. There doesn’t seem to have been much going on in terms of handover, so the education process can start all over again.
And that’s just the nature of the beast when it comes to Procurement – people move around to advance their careers. So, sales people who don’t want their services to be treated as commodities need to be prepared to continually educate Procurement.
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