Getting to Yes with Procurement: Advice for Sales Professionals
by David Chapnick, Michael Kalikow, and Liz Rayer
Whether selling commodity products, new technologies, or
highly differentiated professional services, sales professionals
consistently report that procurement has an ever-expanding
role in the sales process. This is made all the more difficult as
end users have been moved further and further away from the
sale itself. At the same time, sales leaders must be keeping pace
in arming their organizations with the right sales and account
management processes, preparation tools, playbooks, data,
and skills to address the shifting selling environment. Below
are some of the key challenges sales people report they face
most often when working with procurement, followed by some
advice based on over 20 years of consulting to both sales and
procurement organizations.
they promised. Therefore, getting into their shoes and building
your relationship with them is essential.
There are two primary ways to do this. First, get to know the
procurement professionals who are responsible for the product
or service you sell. You can leverage your relationships with
end-users to do this. You might suggest that procurement play
an integral role, perhaps as a facilitator or convener in conversations, or just attend meetings you have with end-users, to help
procurement meet their interest of maintaining some degree
of control over the buying process.
Second, most procurement professionals care about satisfying their own customers — their internal stakeholders (some
of whom might resent being forced to work through procurement, as much as you do). Explore ways to help procurement
become trusted advisors to their end-users. For example, you
could provide them an overview of what you are seeing in their
industry or share with them what you are hearing from their
internal customers, or tell them about ways you have been a
resource to your other accounts.
Common challenges when negotiating with procurement
1. Procurement the gate-keeper
2. Selling value when procurement seems to only care about price
3. Negotiating when it feels like procurement has all of the leverage
4. Out to bid — managing procurement’s reliance on a RFx process
5. Dealing with threats, stalling, and other tough tactics
Of course, the degree to which you are able to have these kinds
of conversations will vary widely, but the essential shift is to
recognize procurement’s legitimate role, and position your own
role as an enabler for them.
Challenge #1: Procurement the gate-keeper
While end-users typically still play a significant role in decisionmaking, more and more corporate policy now requires end-users
go through procurement to make their purchases. This is nothing new, but the role procurement plays as the intermediary
between end-users and their sales representatives has increased
significantly in recent years.
Challenge #2: Selling value when procurement seems to
only care about price
One of the biggest concerns we hear from sales professionals
is that the only thing procurement cares about is price. And,
whenever sales tries to talk about the “value” of their products
or services – quality, customer service, TCO, etc. — procurement redirects the conversation back to price. Price tends to be
an easy factor with which procurement organizations can make
apples-to-apples comparisons. Additionally, as price and “cost
savings” are also often the main metrics by which procurement
is incented, they can obscure procurement’s other interests.
Sales professionals frequently ask us how to get procurement
out of the picture, or how to “go around” them. In our experience,
this goal – and really overall mindset — is counterproductive.
Treating procurement as “the enemy” will quickly make them
your enemy. You will get better results if you accept that working
with them is the new reality — after all they aren’t going away.
Procurement serves an important corporate function around
cost control, and ensuring suppliers deliver the quality and value
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multi-faceted and situationally-specific. For example, there is
significant power in understanding your customer’s portfolio of
interests (quality, price, ease of working with, support, customization, etc.), the degree to which your organization can meet
them better than your competitors, and being able to explain
why your pricing is fair, based on clear and widely accepted
market standards.
Advice in Action
To meet these interests, a Technology company’s Sales
function worked with closely with Sales Operations and
Marketing to develop the data they needed to make the value
case for their products and services. This information justified
why the “price” was what it is, and demonstrated the superior
ROI benefits their customers cared most about. In the end,
this data set them apart from their competition and gave them
significant leverage in gaining agreement with Procurement
on their terms. After the deal, the data was incorporated into
a “Seller’s Toolbox” and disseminated to the rest of the sales
team so they could use it too.
Nevertheless, it certainly feels like procurement has more power
when you need the deal and it seems they don’t — like when
negotiating to renew business with an account your company
simply can’t afford to lose, while competitors are offering unsustainable pricing to “buy” the business. Even in these situations,
power differentials are often more perception than reality. In
fact, Vantage research indicates more than 75% of all sales and
procurement respondents studied believed that the other side
has more leverage during negotiations than they do1. When
we feel we can’t walk away and losing the business would be
devastating for us, we quickly forget that losing the deal may
be equally unfavorable to them, as well.
Procurement organizations and their corresponding interests
will vary by their role within their own organization, and their
level of sophistication and maturity. For example, while some
may only focus on purchase price, others may consider metrics
such as TCO and the broader strategic implications of what
your products or services bring. Try to engage in conversations with procurement, as well as with end-users and other
“coaches” within the organization, to better understand what
the customer’s procurement organization cares about (both in
general and specific to what you are selling). For instance you
might discuss:
There may be hidden costs in moving to a competitor that are
not front of mind for a procurement buyer comparing proposals. For example, how long will it take for end-users to get up
to speed on a different supplier’s technology or get used to
working with a different service provider? What risks to their
supply chain are posed by a switch that doesn’t work out or
moving down the learning curve with a new supplier? Are there
costs with a competitor that will lead to increased total cost of
ownership that they have not thought through? There might
also be services that your organization provides, or a particular
uniqueness to your offering. These are all potential sources of
negotiation power that are often overlooked.

What end do they ultimately hope to achieve, and what
impact do quality, convenience, features, service or other
differentiators play in the organization’s ability to achieve
their desired results?

To whom is procurement accountable and what are they
being asked to deliver?

How are they being measured?
Such a conversation could come off as threatening or counterproductive, and we have seen salespeople overestimate the
value their organization truly brings. Therefore it is critical to
engage such conversations in a humble and tactful manner.

What are some of the risks they are concerned about in their
supply chain?

Are they open to working together jointly to uncover cost
savings, to refine processes, to innovate, etc.?
Challenge #4: Out to bid — managing procurement’s
reliance on a RFx process
The more you learn about procurement’s role and what they
care about, the easier it will be to frame your solutions, your
organization, and the data they care about from their perspective, not from yours or your end-users. The result should lead
to procurement being less resistant.
RFxs are tools in procurement’s arsenal with which salespeople
are all too familiar. It is no surprise that sales professionals find
RFxs challenging, and view the process as bureaucratic and
frustrating. If you have built trusting relationships with endusers and procurement alike you may at least know a request
for proposal is coming. You may even be able to get in front of
it and help shape the request by initiating a dialogue with your
customer about some appropriate criteria to use when making
buying decisions around your product/service, and sharing
any market intelligence you have with them. Though it may be
counterintuitive, helping procurement with their RFx, by more
Challenge #3: Negotiating when it feels like procurement
has all of the leverage
Sales people often view negotiation power as a function of who
needs the deal most. Since walking away from the deal doesn’t
typically feel like a viable option, procurement is perceived
to have the power. However, this definition of power is narrow and self-limiting; sources of negotiating power are more
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Vantage Partners Customer-Supplier Negotiation Study ©2009
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deeply integrating your expertise in the RFx itself can increase
your prospect of being successful.
then you agree to meet the demand without a clear reason for
doing so (other than because procurement asked), you set a
dangerous precedent 2. Conceding on price trains the customer
to hold out for (and demand) price concessions again in future
negotiations, and can set a market precedent that encourages
others to do the same.
That said, even the most well-established salespeople encounter RFxs from time to time. There is an easy way to frustrate
procurement in a response — submitting standard or canned
information, answering questions that you preferred were asked
versus ones that actually were, or even worse, submitting endless, unorganized marketing materials that were not requested.
It is important to consider the actual questions and make sure
these are answered directly. Procurement structured the request
in a way that made sense to them and which indicate what they
are looking for. Paying attention to what is being asked provides
valuable information about procurement’s interests and the key
criteria they are using to evaluate proposals, and your responses
should be framed accordingly.
Rather than making concessions, consider what arguments
can be made to defend what you are proposing. For instance,
to justify your price in the above example, you might do this by
demonstrating their request is inconsistent with the market,
or the pricing you have granted to similar customers (e.g., by
volume or spend). In addition, you should evaluate how well your
competitors can meet the full set of this customer’s interests at
the price they are offering. For instance, is the price so low that
the competitor will possibly sacrifice service, quality, etc. on
implementation of the contract so that they can actually make
a profit? Ultimately, you should not grant a price concession
on its face without connecting it to something you are getting
in return, or something they are now not going to get, to justify
the decrease — that might mean rescoping, changing volumes,
extending timelines, or decreasing add-on services.
Advice in Action
When procurement looked to consolidate spend, and put a
major Medical Device company out to bid, the sales team
developed a fit-for-purpose response that spoke exactly to
the interests procurement laid out in the RFP. This included a
targeted executive summary that laid out all of the key pieces
of their bid package, and the extraordinary savings and benefits
their health system customer would achieve by maintaining the
business. In the end, not only did the team win the business,
and defend their position, the health system shifted significant
spend to them from their competitors.
People persist in using tactics, whether consciously or unconsciously, because they have had good results employing the
behavior in the past. Above all, when responding to difficult
tactics, be persistent in holding your ground and be relentless
in your commitment to finding a constructive and fair outcome
to the negotiation.
Advice in Action
Challenge #5: Dealing with threats, stalling, and other
tough tactics
Facing some downright difficult procurement tactics, such
as should-costing, unrelenting insistence on unjustified
discounts, and constant disingenuous threats to move spend
to a competitor, a major tech hardware supplier developed
a “Tough Tactics” Playbook. The playbook gave their teams
the words to say and process to engage when procurement
was acting impossibly difficult. Perhaps most helpful, the
playbook also outlined Account Management strategies such
as developing a Value Scorecard, and engaging in Joint Value
Discovery sessions, which would preempt difficult procurement
tactics in the first place.
We often hear from sales professionals that procurement engages in some of the toughest negotiation tactics they face — threatening to put the business out to bid, insisting on excessive or
unreasonable demands, misrepresenting the facts, getting angry
or emotional, or even making personal attacks. Essentially, these
tactics are all trying to throw you off your game, intimidate you,
and get you to cave in to making concessions. Responding in kind
to the game they are playing can be a self-fulfilling prophecy,
resulting in damaged relationships, and lost deals. To counter
them effectively, do your homework, be well-prepared, and have
justification for what you are proposing and why.
The trick in responding to the difficult tactics themselves is to
first, not react, and then remain firm and constructive. Instead,
all too often sales simply gives in and makes concessions in order
to close the deal. This can be very costly in terms of revenue,
time, and reputation. For instance, if a customer threatens to
buy from a competitor if you don’t drop your price by 20%, and
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For the foreseeable future, procurement will continue to expand
its role in the buying and negotiation process. Getting into procurement’s shoes and developing skill in negotiating with them
are essential competencies for every sales professional working
Vantage research has shown that this can lead to a precipitous drop in ASPs over time. Within one year of granting a pricing exception, approximately 45% of companies see a
drop in overall ASPs to the concession price. Vantage Partners Pricing Exceptions Study. Forthcoming 2014.
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in the current environment. Likewise, sales leaders should equip
teams with the data, processes, and preparation tools they
need in order to standardize engagement with procurement,
and ensure positive outcomes are repeatable. Not treating
procurement as your enemy, learning what your procurement
counterparts care about and what their role is within the larger
organization, and being well-prepared to explain and defend
the merits of your proposal are just a few approaches that can
help overcome the challenges of working with procurement.
Vantage’s Getting to Yes with Procurement Negotiation
Course has been custom designed for sales and account
executives facing precisely these challenges. To find out
more about the course or how our Sales Advisory Practice
helps our clients build the capability to address them,
please reach out to us at dchapnick@vantagepartners.com.
About Vantage Partners
Vantage Partners, a spin-off of the Harvard Negotiation Project, is a management consulting firm that specializes in helping companies
achieve breakthrough business results by transforming how they negotiate, and manage relationships with, key business partners. To
learn more about Vantage Partners or to access our online library of research and white papers, please visit:
www.vantagepartners.com
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