New procurement teams introduce big challenges and new opportunities into the customer relationship. As a supplier you need to adjust fast and build a foundation of trust.
Help! My old contact has been replaced
A new procurement team introduces fresh dynamics and relationships. The working environment will undoubtedly change from what you were used to with the previous procurement team.
And that creates significant challenges and new opportunities for suppliers that call for smart thinking and swift action.
The topic of how to respond when the complete procurement team is replaced and a new internal team steps in was submitted by Alexandr Zhilinkov, a listener of The KAM Club podcast.
He asked. "What are the best practices to build relationships and ensure they are not bringing their suppliers in replacing you?"
This is a situation I've been in many times and I know Alexandr and I share this with many of you too.
- Your procurement contact is replaced and the relationship goes back to square one.
- Your new procurement contact starts to take advantage of you. They know you have some fear about what this change means and worry the new contact has something to prove. You client becomes an opportunist:
- Forcing you to consider a price reduction ("If you want to keep our business, we need a discount).
- Exposing quality or delivery problems ("I don't care that my predecessor was fine with it, I'm not.")
- Undermining personal/professional boundaries ("Let me talk to your boss", "If you don't do this, I'll have to terminate our agreement."
- Increased pressure due to changing expectations (things like revising deadlines forward, demanding more from you, pushing you to deliver beyond your scope of work, but for no extra money).
- Pre-existing relationships with competitors that may jeopardise your current status as a supplier.
- Biases based on assumptions, not facts. They start picking over little details. Challenging you on choices that were made months or even years ago.
First things first: find out what they want
You can't adapt your account strategy until you understand what the new procurement team want. Schedule a discovery meeting as soon as possible to figure out what their priorities are.
Don't dwell on the past, look to the future. There are new people in charge, and what was important before may no longer be in focus.
Thinks you want to know about the new procurement team:
- Find out primary motivations (relationship, price or value).
- Find out their focus (functional/supplier or strategic/partner)
- Evaluate the relationship type: personal, demanding and difficult, or partner
- What do they think of your relationship? Is it critical, important or unimportant?
- Who are their internal stakeholders?
- How do they want to manage supplier relationships?
- What is their role in optimizing costs?
- Find out their KPI drivers. For example:
- Savings realised
- Spend Controls
The goal of this meeting with the new procurement team or contact is to:
- Understand their business, situation and needs.
- Demonstrate the ROI of your partnership.
- Share your expertise and perspective.
10 steps to become a supplier of choice
Gartner released a study on procurement's response during the pandemic and came up with a flywheel on how to be a customer of choice.
We can apply this equally to being a supplier of choice. Here are the ten steps you can use to prove yourself a valuable partner to your clients new procurement
- Share strategic information.
- Be open to your client's ideas.
- Take the long view.
- Plan ahead and execute well.
- Live up to your commitments.
- Be easy to do business with.
- Respect your margins. (essential for credibility and long-term partnership)
- Spend time with your client's procurement team.
- Provide performance feedback
- Recognize and reward success.
Whenever you interact with your client's procurement team, always think:
How can I help them achieve a gain, or remove the pain, from some aspect of their business?
If you focus on what better solutions look like and the path to achieve them, you'll create a strong foundation on which to build your relationship with the new procurement team.
Check these out
+ The Art of Procurement Podcast. As a supplier, if you want to sell to procurement, you really need to understand things like the buying process, supplier management, supply chains, decision making and more. This is an informative and entertaining podcast that will improve your knowledge of how companies buy.
Favourite episode: Procurement Takes the Leap and Embraces 'Vested'. Discussion on why so many of supplier relationships are win/lose and how procurement can - and should - create relationships based on the notion of shared value.
+ One Page Key Account Plan Guide & Template. Say goodbye to complicated account plans that don't work. Grab this free easy-to-follow guide that will have you writing a successful key account plan in no time! Templates for Word and Trello included plus a completed example for inspiration.
+ The Seller's Challenge: How Top Sellers Master 10 Deal Killing Obstacles in B2B Sales. One of the only sales books I've read that has a dedicated chapter on partnering with procurement. It explores in depth the realities of selling to a committee, the changing role of procurement and how to build collaboration, plus a procurement ready checklist!
+ The KAM Club. The world's most amazing community of key account manager. Inside you'll find all the tools, templates, guides, workshops, training and coaching you need for a successful career in key account management.
Quote of the week
"Cooperation, collaboration and coordination are together more powerful than competition." ― Hendrith Vanlon Smith Jr
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