Do you find navigating the procurement process to be challenging? If so, you are not alone. Gartner reports that 77 percent of B2B buyers say their last purchase was complex or difficult. In fact, “complex sales” is a term that is synonymous with enterprise sales. According to Sales Hacker, a complex sale meets three criteria:
- Number of decision makers
- Length of sales cycle
- Buyer’s perceived risk
Ironically, all those factors that make the sale complex for the salesperson, also make it complex for the buyer. Gartner also reports that 75 percent of buyers say they must juggle people from a variety of roles, teams and locations in order for decisions to be made. How can buyers navigate a procurement process that is increasingly challenging?
You must first understand that procurement is more than simply negotiating contracts and saving money. Procurement is a process that strategically assesses and manages an organization’s external spend. Buyers play a critical role in finding innovative ways to partner with vendors that will positively impact the company’s bottom line.
Filling that vital role will lead to successful procurement. When shareholders see the impact on the organization, sign-offs become easier. Consider these five best practices to help you successfully navigate procurement.
1. Define Procurement Objectives
Before any buying project starts, general procurement objectives must be in place and defined. A procurement team’s objectives are usually divided into three parts:
- Business objectives: These focus on the “what.” What are the organization’s overall objectives? For example, a business objective might be to improve profits.
- Operational objectives: These focus on the “how.” How are we going to achieve the business objectives? If the business objective is to increase profits, the operational objective will explain how to get there. For example, operational objectives might involve increasing sales or reducing overhead.
- Personal objectives: These are the objectives of the person or team mostly affected by the purchase. When looking at SalesTech, the personal objectives might be to boost the sales team’s productivity, book more appointments or close more deals.
Clearly defining the procurement objectives at every level will help buyers navigate the sales process and get sign-off. When stakeholders see how the purchase affects the entire organization, they are more likely to give approval.
2. Practice Team-Based Buying
Put together a procurement team that includes a cross-section of key players from multiple departments. Cross-departmental involvement is key to successfully navigating any procurement project, and getting management buy-in. Consider it like gathering allies. Build excitement among various team players.
The first piece of research should be internal. What’s your internal process or playbook for determining if a solution is what you need? Outline a roadmap to identify and qualify prospective vendors. Will the solution only support the sales team or do you need to consider the effects on finance, customer service or marketing? How will the solution meet the overall company mission? Define the expected ROI. How much risk are you willing to assume?
“After-all, the decisions you make here will impact your sales playbook, other tools and reps immediately. But long term, they could impact your team’s pipeline and closed revenue numbers.” Here’s how to nail your own vendor research!
Note what IndustryWeek had to say on this subject: “Successful companies achieve greater savings by creating a collaborative partnership between procurement and the business, and making both accountable for results. Collaboration enables smarter, proactive purchasing decisions.”
Not only will you make smarter decisions when input is gathered from multiple departments, but it will be easier to get management sign-off when the benefits to the organization are clearly represented from multiple sources.
3. Embrace Social Selling
While this is often a tip aimed at the salesperson, it’s equally beneficial to the buyer. What is “social selling?” It’s the process salespersons use to find and engage with prospects online. Vendors connect with prospects via social media, providing valuable answers to questions and relevant content. In short, they are giving you free information without you having to go through a lengthy sales pitch.
How does this benefit you, as the buyer? Think of it like test-driving a car. You’re establishing relationships, getting to know the vendor. Test their knowledge. Evaluate their approach. Do they come across as a trusted advisor or a pushy salesperson? Do they have a loyal online community? Test out various vendors through online interactions to see which one has a business approach that closes matches your organization’s.
When it comes time to seriously evaluate options, you will have narrowed down a short-list of industry leaders. Additionally, the vendor will already have a proven track record to show your shareholders. You’ll feel confident endorsing your choice and asking for sign-off.
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4. Evaluate Total Cost of Ownership
When comparing software and vendors, calculating the total cost of ownership (TCO) is critical. TCO encompasses more than the cost of the software, subscription fees, etc. It is a comprehensive assessment of what the purchase will cost over time. For example, if you were buying SalesTech, TCO would include the hardware and software acquisition costs, management and support, end-user expenses, training, possible downtime, and productivity losses during the transition.
This comprehensive analysis will help you determine if a purchase is really worth it. By looking at direct and indirect costs, organizations get a complete picture of their financial investment. Additionally, you can more accurately compare vendors. While one vendor might be cheaper in the short run, long-term their product and service might cost more.
5. Get Outside Opinions
In Gartner‘s B2B Buyers Report, one of their key findings is that buyers “have access to more high-quality information than ever before.” Take advantage of the plethora of information available. Listen to the online chatter about potential vendors. What kind of reputation do they have among your industry peers?
Analyst reports are a great way to get under the hood and find out exactly what you need to know with any technology. The stamp of approval from a reputable 3rd party often helps ease concerns and fears, which is why case studies and social proof are such common sights in modern sales.