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Decoding Procurement’s Pricing Myth

Sales Training Article: Decoding Procurement’s Pricing Myth

By John Holland, Chief Content Officer, CustomerCentric Selling® – The Sales Training Company

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Few sellers look forward to working with procurement to finalize transactions. Besides delaying orders, agents have the advantage of being unaware and uninterested in knowing much about offerings, how badly they may be needed, potential paybacks, etc. They try to have sellers believe it’s all about price.

When buying commodities (products lacking differentiation), there are some areas of potential concern. Procurement doesn’t want to choose vendors that:

  • Provide poor quality
  • Don’t meet delivery commitments
  • Provide poor service
  • Try to enforce tight payment terms
  • Provide poor support

People within their organization are their customers and procurement wants to avoid any complaints about suppliers that are awarded transactions. With commodities they may well be able to dictate which vendor to do business with.

If a buying committee has done an extensive evaluation and has chosen a vendor whose offering and support are not commodities, the items listed above are in play but there is another concern for procurement. While they can ask for better pricing, they don’t want to alienate the seller. It isn’t an option to say they couldn’t come to terms with the committee’s vendor of choice and suggest choosing Vendor X.

If/when Procurement delays decisions, it’s helpful if sellers have gotten buyers to agree to a compelling cost vs. benefit.

Action: My suggestion is to:

  • call the most senior person involved in the buying decision
  • remind him or her of the potential value being deferred
  • ask if they can check with procurement to expedite the P.O.

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