We’ve all been there – at the five-yard line and there’s one more conversation that needs to go down successfully before getting that ever-elusive signature. But, before the deal you’ve been working on for the last six months can become official and the dollar signs dancing in your head can make their way to your bank account, you need to get past the final hurdle. Ah, procurement. Wouldn’t it be awesome to hear that legedary Star Wars line uttered by the checkpoint Storm Trooper that Obi-Wan so famously mind-f@cked? “Move along. Move along.” Unfortunately, it’s not going to be that easy. Like you, the procurement officer you’re trying to navigate past has a goal – and unfortunately, it’s directly contradictory to yours. He or she is looking to shave a few more bucks off the price of your product. Heck, some of these folks are even commissioned on how many dollars they save their organizations. At the end of the day, procurement professionals are salespeople too – and you’re going to have to put yourself in their shoes to avoid giving away an ounce of flesh in this staredown. Well, either that or consider spending a few months on Degobah training with Yoda so you can drop some Jedi mind tricks of your own. In the case that you don’t have access to an X-wing fighter and a ton of unused PTO, perhaps the suggestions below will be useful the next time you find yourself selling to procurement…
Don’t fall for the old sneak attack. Involve procurement early in the negotiation so they can’t save their cards (and keep them hidden) until the last hand. I’ve found that it can be helpful to require customers to bring their procurement representation to the table before going beyond rate card pricing – or at least prior to discussing any kind of significant discount. This way, by involving them EARLY in the sales cycle, you have the best chance of addressing a prospect organization’s pricing concerns holistically – as opposed to in two separate vacuums.
Tie incentives to concrete dates. Setting a time bomb can be helpful. Remember that scene in Return of the Jedi where a disguised Princess Leia brought about a quick compromise from Jabba the Hutt on the bounty to be paid for a captive Chewbacca? She was holding a thermal detonator – with a ticking timer. In cases where appropriate expectations have been set regarding the expiration of offered discounts, delays created by unduly difficult negotiating positions taken by procurement can harm the business. Your dance partner’s job is to save money for their organization. And as such, the last thing they want is to lose money – either in the form of discounts expiring or delayed implementation start dates that could be the result of them holding too firm a stance. These situations often wind up coming down to who will blink first. Take guesswork out of the game by clearly aligning your pricing incentives to an expiration date early in the sales cycle – and regularly communicating (with acknowledgement) that date every step of the way.
Make sure the business is represented in your conversations. The business wants your product. There’s a reason they’ve given you vendor of choice. Make sure this is obviously clear during your conversations with procurement. Try your best to keep your POC/DM involved throughout the latter stages of the sales cycle and procurement process – CC them on emails, invite them to calls, etc. Some organizations are hesitant to “allow” this as they choose to exercise “separation of church and state” between the business and procurement. That being said, a little creativity can go a long way here, and I’d rather apologize after being slapped on the wrist than ask for permission that I’m unlikely to get.
Leave some meat on the bone. Purchasing organizations have been there before. They’re likely to try taking two bites of the apple – one during the business’ negotiation, and another during the procurement process. Knowing this up-front, be sure to leave some room between what you’d consider to be a successful commercial outcome and your final offer to the business during price negotiation. Obviously, this won’t be possible every time. But, it feels good when you can float a small win to procurement (which often helps get them in your corner when it comes to driving for a quick signature) and even better in the rare instance that you don’t wind up needing to go any deeper.
Understand their priorities. Every company emphasizes certain elements of a negotiation. Understand their priorities and try to determine early what it is that they value most. Are they trying to give you a haircut on total contract value? (Typical of Fortune-500 type businesses who operate with plenty of cash in reserve). Or, are they trying to reduce year-one spend to free up money for an upcoming strategic initiative? Have the CAPEX vs. OPEX conversation. The better you understand how they define their own success, the better chance you have of preserving as much of your commission as possible. There’s nothing wrong with being direct – ask up front what their goal is, and you might be surprised at how well they’ll define it for you.
Shoot for the top of the food chain. Negotiating with Darth Vader is pointless when you know the Emperor is the true decision maker. Try to determine early on if your procurement POC is a boss or an underling taking cues from up the org chart. Understanding who makes a decision can be just as important as understanding why they make a decision. “Titles” often prefer to deal with “titles,” so, in the case where you can’t personally gain access to your procurement contact’s boss, try suggesting a meeting between your manager and that person – or better yet, invite your head of sales or CFO to the party. If nothing else, this will show your prospect how important they are as a customer to your firm.
Do your research. What good would a raid on the Death Star have been without knowledge of its structural instabilities? Someone has sold to this organization before. Chances are, someone you know has sold to this organization before. Gathering intel for the upcoming negotiation with procurement sounds like a great way to get meaningful value from your LinkedIn network. Personally, I’d receive a message soliciting information as a welcomed change of pace from the typical spam and recruiter outreach that plagues my LinkedIn mailbox these days. And why not take it even one step further? Seek out and ask for advice from procurement folks previously employed by your target organization. Strangers can be eager to assist if approached in an appropriate manner.