What makes a salesperson stand out from the crowd? Creativity? Understanding? Perseverance? Preparation? Read the opinions from 7 Procurement Experts and learn some tips on improving your sales competencies.
This article was based on research conducted by Conti Advanced Business Learning (www.cabl.ch), a Swiss training company that specializes in Negotiation & Influencing training.
Thinking outside of the box
It’s important that salespersons have the ability to think out of the box and can come up with creative ideas. During a renewal negotiation with the caterer for our staff restaurants, we got stuck on the question on how to run them. We had quite a strict plan in place that worked well for us. However, the supplier wanted to have more flexibility.
After discussing some variations of how to run them, the salesperson suggested that one restaurant could be run based on their suggestion and all other restaurants would be run “the old way”. We agreed to this suggestion and it has become quite a success for both parties. Now we are thinking of amending the contract so the supplier can run all our staff restaurants the way he suggested.
Lukas Wyder, Director, Rogers Communication
Active listening changes perspectives
Once a strong salesman joined my meeting room knowing he has a much higher price than his competitor with the same quality and T&C level in the last 7 digits RFQ. I was going to reject his offer and explained to him why. He was an amazing listener. He asked me why we don’t change the perspective and think like there isn’t a box restricting us. Instead of throwing the old parts away we developed a refurbished system with nearly the same warranty level. Savings were around 70%. My team won the Group Procurement Award with that project in 2016 thanks to that great sales guy.
Know your counterpart’s business better than they know theirs
Once, in the course of a Business Transformation program, I was the lead negotiator to secure an “off market” commercial deal with one of our long-standing Japanese raw material suppliers. My demand was aggressive (-40%), it was clear that if they rejected it, we were prepared to move to an alternative (but inferior) Chinese product. They did agree to our request and in return, they requested contract changes valuable to them. These included the ability to trial new product technologies in our plant, a secondment of Japanese personnel to our business, technical and information exchange all of which amounted to a significant marketing advantage.
They succeeded in coming to an agreement as a result of being able to read the market correctly and understanding the suppliers’ economics. For instance, they understood the very favourable terms from other Chinese suppliers that wanted to get a toehold into lucrative Western markets (the US, Australia where we had a business), suppliers who offered significant discounts to us to underpin say 40 – 50% of their production capacity for 3 – 5 years. The learning in all cases was the supply base knew our business better than we knew theirs, so they knew what was in my mind and what would “win the deal”.
Alan Hustwick, Senior Executive Global Supply Chain, SCCR Pty Ltd
Creating new value and a win-win outcome
I once met a salesperson that had an extraordinary understanding of our business and our needs and was thus able not only to unlock a negotiation but to find a large win-win deal including real additional value creation for both sides.
The salesperson of the supplier was then able to enlarge the scope of our conversation in exploring the greater needs of functional chemicals we required.
It all started with a complicated negotiation on a speciality chemical. In the absence of a market price as a benchmark, we needed to move the discussion in a different direction to find a commonly acceptable deal. The salesperson of the supplier was then able to enlarge the scope of our conversation in exploring the greater needs of functional chemicals we required. Through this, we were able to identify new innovative material for our business and reduce the price of the initial chemical, it was a case of true value creation through close supplier collaboration.
Help me help you
One of the most interesting approaches I had was by the sales manager of a well-reputed medical insurance provider. His approach was very different from others. He positioned himself as a partner, as all sales representatives would do, yet he actually asked us to help him reduce the price he offered by participating in the negotiations with the service providers, i.e. clinics and hospitals. This was he ensured our engagement and eagerness to get cost reduction, that he would also benefit from in his other contracts. He was smart!
Selling with empathy and conviction.
Effective salespeople put themselves in the shoes of key people in my company. Instead of considering the fit of their value proposition with their understanding of our context (as expressed in our tender document), they made us constantly rephrase and reframe the problem at hand, making sure they were understanding the context.
Then, spontaneously, they broke the codes of the negotiation session, literally coming to our side of the table, sitting next to us, and exemplifying how they believed in their value, demonstrating by examples we could relate to, and not forcibly those described in the tender document.
Go straight to the top
In my opinion, the most powerful technique is to sell the agreement directly to senior management and position your company in their mind as the only one that can do the job. If Procurement is involved at this later stage, there is an imbalance of power in the negotiation. Still, the wise salesperson looks for opportunities to please Procurement and create additional value (for example, a strategy consulting firm offered me an interesting rebate and a number of free services as incentives if the deal got extended or broadened).
These answers were collected by Giuseppe Conti, Founder and Managing Partner of Conti Advanced Business Learning (www.cabl.ch), a consulting firm that specialises in negotiation & influencing. This article is part of a series aimed at collecting real-life negotiation experiences from Procurement executives.