A myth is an idea or story that is believed by many people but is not true. An example is the myth that the Great Wall of China is visible from space. It’s not true. A myth can also be a story told in an ancient culture to explain a practice, belief, or natural occurrence.
In business, there are a lot of myths. Myths can be an outdated view of a cause and effect relationship. Or a myth can simply be a mistaken view of how things work. In speaking to sales teams, I find that there are many myths about the buyer-seller exchange and professional buyers.
Some of the procurement myths held by sales teams are artifacts from the past when procurement was not as strategic as it is today. Other myths result from a lack of understanding about the role, goals, and sourcing strategies of the modern procurement organization.
Across industries, organizations are investing in building a strategic procurement capability and becoming smarter buyers. With this changing buying behavior, there are common selling myths that need to be dispelled. Some of these myths deal with professional buyers and value. Here are five common myths of selling value to procurement:
Myth #1 – All procurement cares about is price.
While reducing costs – whether through price or other means – is a key goal of procurement, buyers need to keep other priorities in balance in the buying decision. This is why surveys show factors like quality, service, and total cost of ownership ranked higher than price by buyers. Smart buyers know that supply disruption and quality issues can destroy much more value than can be gained by some price savings.
The buyers’ focus on price is not static and can be influenced by the actions of the seller. In studies, researchers have found factors that cause professional buyers to focus more or less on price in the buying decision. These factors include:
- Whether the buying goal is focused on staying within a budget or managing total cost of ownership
- The quality of evidence to support value
- How much value is shared with the buyer
The seller has a role in educating the buyer and managing these factors to influence buying behaviors.
Myth #2 – Procurement people are combative by nature and don’t seek collaborative solutions.
Another myth is that procurement people are combative – focused solely on a win-lose style of negotiations and supplier management. This is not the case. In fact, in research, about two thirds of procurement people self identify as preferring a collaborative relationship with suppliers. The style of supplier engagement also depends on the level of the person in procurement you are engaged with. More junior people tend to be less strategic and less collaborative.
The seller can influence the buyers’ supplier management approach and negotiation style. Engaging early in the buying process to educate the buyer, pricing fairly, pushing for collaborative solutions, and engaging at the right level in the organization are key success factors.
Myth #3 – Procurement people are Machiavellian.
Many procurement people can be seen as Machiavellian, which is associated with deceit, deviousness, ambition, and brutality. While there are occasions when some buyers are deceitful, most buyers are just doing their job. What might be viewed as Machiavellian is often just a normal part of the change process or part of the negotiation exchange. Buyers, especially progressive ones, are usually trying to find new ways to drive value in supply management. This can be viewed by the seller as being brutish and ambitious.
Myth #4 – Procurement is just a gatekeeper.
In any buying process, there are a variety of roles. The roles include users, gatekeepers, influencers, deciders, and purchasers. An individual or group can take on one or more of these roles. Salespeople, sometime, mistakenly believe that the procurement person is just a gatekeeper and has no real influence in the buying decision. While this may have been the case in the past, in many industries, it is quickly changing.
Procurement people are playing more of a role in the buying process and their influence is increasing. In addition, in many industries, committees are making buying decisions. The individual leading or driving the committee is typically someone from procurement. Buyers are not just gatekeepers any more.
Myth #5 – Procurement people don’t want to see sales.
“I try to avoid procurement at all costs. I sell around, behind or over them,” is a comment I hear from sales teams. Comments like this, many times, demonstrate a lack of understanding. Research shows that professional buyers want to be educated. They want to engage with sales people who can add value. Buyers want to interact early in the buying process. If you are avoiding procurement, you are missing an opportunity to educate them, influence buying criteria, and be part of the solution.
A more in depth discussion of this topic, along with a rich Q&A session, can be found in this recent webinar.
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