
Customers are wising up. Today’s procurement people are smarter and better trained than ever before. What’s worrying for some print firms is that many are better trained than salespeople. With more companies now managing suppliers through centralised procurement or purchasing departments, it puts pressure on printing sales teams to raise their games. Savvy clients are out-thinking sales teams and getting better deals.
Procurement has become a sophisti-cated skill because of its impact on the bottom line; at big corporate clients, a procurement department might be responsible for millions of dollars of expenditure. Procurement people use a range of tools to weight the scoring around the responses they get from suppliers. Employers will send their procurement teams overseas for specific training in supply chain management.
There’s a perception that procurement people are only interested in beating down the price. Cost is a big part of the task, but procurement people aren’t solely fixated on dollars. After all, it’s not their money. And there is no point in buying the cheapest if the supplier is unable to
deliver on time and to specification.
The problem is that too often, procurement and salespeople speak different languages. Printers need to learn how to translate. They might have to adopt new strategies to make the sale.
Challenger Sale
The US-based Corporate Executive Board surveyed more than 6,000 sales reps to capture this trend in its book, The Challenger Sale: Taking Control of the Customer Conversation, published last November. Written by Matthew Dixon and Brent Adamson, the book makes the point that the skills of the procurement industry have advanced much more quickly than selling skills.
The authors say salespeople are less skilled at their job than the buyers to whom they’re selling. In a market that’s fast becoming commoditised, that’s a danger signal. Your products might be “faster”, “newer”, “smaller”, “bigger” or “greener” but so are everyone else’s. An excellent brand, product and service is now the minimum requirement. If clients see little or no difference between offers in terms of quality, delivery or service, price is the only lever left. The deal will come down to a bidding war.
To get around this, a salesperson needs to understand everything about their industry and prospective client. They then need to challenge the client’s thinking and have truly relevant conversations.
The Challenger model identifies five types of salesperson (see box p35). Relationship Builders focus on developing strong personal and professional relation-ships across the customer organisation; Hard Workers go the extra mile, put in more calls per hour and conduct more visits each week than anyone else; Lone Wolves are self-confident and who follow their instinct rather than the rules and who want to have things their way; and Problem Solvers are detail oriented and focus on post-sales follow-up.
Finally there are the Challengers, who use their deep understanding of the customers’ business to take control of the conversation, even if it means sharing potentially controversial views by raising questions about the challenges the customers face and offering solutions. They challenge customers’ thinking and provide insights that increase competitiveness. Challengers approach each customer in a tailored way, aligning their insight to the customers’ needs and priorities. They are assertive enough to push back when customers express scepticism about their insights and resist the pricing.
According to the US research, on average, 40% of star performers were Challengers. In complex sales, that rose to 54%. Relationship Builders were least likely to achieve star performance because relationships, while important, are no longer enough to ensure customers are happy. When it comes to growth, the best sales reps challenge the status quo, not reinforce it.
Simon Lane, national manager for graphic communications at Fuji Xerox, says the Challenger Sale approach shifts the power of the conversation to the seller, not the buyer. Fuji Xerox sales teams are now trained to use the model.
“The skills of the procurement industry have advanced more than the selling skills,” Lane says. “Salespeople are typically being trained to ask questions. It’s the old ‘What’s keeping you awake at night, Mr Customer?’ Procurement people have got savvy to that very quickly because they know where it’s leading. They know it’s a dance to getting an order.
“The amount of training that a procurement person is provided now is night and day compared with what it was 20 years ago.”
He says that this means having a completely different conversation.
“If your procurement professional knows more about how to buy than you
do about how to sell, then there is only one way the conversation will end up and that’s going to be a price-based conversation.”
“Unless you find a way to have relevant conversations with clients in a much more sophisticated way than salespeople are typically having now, it’s only going to get worse in terms of price positioning. If you’re selling print and a purchaser doesn’t perceive any value in what you’re trying to do for them, you’re in trouble. If you’re selling the solution that addresses a client’s need, it might be a need they never realised they had, or it might be framed in a way they had never thought about, you’re selling an outcome that is unrelated.
“There is no point going to a client unless you have some value proposition that makes sense to them. If you’re going to sell your capability, you are falling into the trap. Your capability is pretty vanilla compared with your competitors, which means you will have a price-based conversation.”
Good salespeople need superb intelligence to navigate organisations and ensure that the procurement people are not the first and last ports of call.
“One of the things we do is spend a lot of time understanding the requirements of our clients,” Lane says. “The most valuable piece of intelligence you can get about an organisation is the organisational chart. It’s about the relationships between the operating areas of the organisation and the kind of functions that operate.”
Some procurement professionals have pet hates about salespeople. One buyer from a big Australian corporate, who did not want to be identified, said salespeople are often more interested in new customers than existing ones. They are working on the next deal as soon as
the new contract is finalised. Another problem was that suppliers would send
in the ‘A team’ to secure the deal but once that was stitched up, the less experienced ‘B team’ would take over.
Bill Healy, chief executive of the Printing Industries Association of Australia (PIAA), says printers will have to make tough choices. “Like a lot of these things, when the market changes, there are winners and losers.”
He says the nature of the change with procurement is to ensure organisations drive their dollar further and get more value out of what they spend. “You’re immediately behind the eight ball.”
Recognising the problem, the PIAA is now running three-day courses for salespeople and a nationally accredited Diploma of Management/Sales from the Printing Industries National Training Package and funded by the New South Wales government. Ian Walz, national manager for commercial services at the PIAA, says: “When we have surveyed the industry, sales has come through as one of the top priorities.”
But there is some way to go.
Andrew Price, the former head of print management company Stream Solutions, says procurement people often leave salespeople for dead in negotiations.
“Salespeople don’t understand what procurement people are going through. They don’t understand what the profession is. They don’t understand their motivations and they don’t understand the results they are trying to get. The salesperson will talk about what kind of machines they have got and at the end of the day, the procurement people don’t care.
“All the salespeople are interested in is trying to get the sale and talking about their company. They like to talk about how many presses they have got, how many hours they have worked and show them pictures of their factory. Procurement people don’t care. They
are just interested in the final product.”
Gut vs graphs
Tony Di Stefano, who has run procurement for the Sydney Olympics, Commonwealth Bank, American Express and the NSW government, says procurement people are trained to think holistically. Di Stefano personifies the process-driven attitude of the modern procurement professional, using specific models rather than gut instinct alone. During his time at American Express, he was privileged to be trained by the WP Carey Institute at Arizona State University. He uses the Kraljic Portfolio Purchasing Model matrix, which assists procurement professionals with defining spend category strategy and further adapts it to define the corresponding
sales strategy that salespeople use.
He says procurement people have to know what makes sales teams tick.
“It’s important for the procurement professional to understand the sales process. There is something of incredible value in understanding what is diametrically opposed to your profession. There is a real science associated with that. A great conversation between a buyer and a salesperson would invoke a series of questions that are similar but diametrically opposed.
“The best practitioners of procurement are those that can easily move between being a gamekeeper and poacher. You have got to be able to understand both spaces.”
He says procurement people are also trained to look at the “five forces” developed by leading management thinker Michael Porter. Porter’s strategic analysis says there are five threats to business: the threat of substitute products given the customer’s propensity to switch over to a competitor’s offering; the threat of new competitors entering the market; the intensity of the competitive rivalry between competitors; the bargaining power of customers that puts the firm under margin pressure; and finally, the bargaining power of suppliers.
This forces procurement people to look not only at the company but at the industry itself. In printing, one of these forces is the impact of digital technology.
Asked whether he thought salespeople understood and appreciated these forces, Di Stefano says: “I think there is a greater sense urgency on the procurement profession to understand those elements. It’s not that I don’t think the sales profession is not capable – I have come across players in the printing industry sales space who are very capable and very insightful and they do take the time to really understand all the demand drivers and the market dynamics – but it is consistently impressed upon the procurement profession, you have to know your stuff in your industry.”
The smartest sellers
Andy Franks, a former procurement manager at News Limited, says good salespeople are the ones who know their customer’s business thoroughly. They are the ones who raise questions about the challenges facing the customers’ business and offer solutions. When they do that, they can often out-think the client.
“It’s about the ability to listen. Listening is one thing but being able to interpret it into a realistic solution is the bigger challenge. The really capable and talented salespeople can do that and articulate it in a way that it becomes beneficial not only to their organisation but also to my organisation.
“The best salesperson is the one who can act as a translator for sometimes vague notions from the buying side. The salesperson can articulate that and turn it something that will have a meaningful impact on the final outcome of the job. They are the ones you take a lot more
time with and work more closely with.
“I don’t think you can disguise the fact that salespeople are always there to sell but they can potentially take a longer time around that and they take care and have the patience not to force the situation.”
Dark art of print
Aaron Spooner, national sales manager at print management firm PMA Solutions, says it comes down to relationships. That is the key for print management companies to help clients understand the minutiae and dark art of printing.
“For a salesperson, it has to go back to the building of relationships with procurement people,” Spooner says.
“From my point of view, we have to create relationships with procurement people as we did with marketing people or any other area of the business. Selling is about relationships.”
How do they do that?
“It’s similar to any other area, it’s about good service, it’s about being in their face, it’s about being there regularly and talking to them regularly, rather than avoiding them. I think there has been a little bit of avoidance of procurement,” he says.
“They are more attuned to numbers, especially in this market. But it’s similar to any sales process. It’s about relationships with people and doing the right thing; it’s about building trust,” says Spooner.
Michael Schulz, a director of SOS Print & Media Group in Sydney, says one of the big issues is that procurement people are not necessarily across everything that’s important for print. They speak a different language and salespeople can find that disconcerting at times.
“When they deal with people who come from a procurement background, there can be room for misunderstandings because procurement people have totally different angle for discussing projects.
“Traditional print buyers have almost died out, apart from some exceptions. In many companies, they have been replaced by young people who say: ‘Don’t give me any of that print jargon, I don’t understand it, and I don’t think I need to.’ Very often, all the procurement person is interested in is saving costs and buying according to budget,” says Schulz.
“They buy all kinds of stuff, whether it’s pencils or print, and a lot of it is done by focussing on the deals that are the most attractive financially. They often don’t value relationships with print suppliers that much and often don’t understand the complexity of the custom manufacturing we are performing.”
Trained to sell
Schulz says SOS has taken steps to address this. First, it is inviting in as many procurement people as possible to show them the complexities and intricacies of printing. Secondly, it is training sales reps to work with procurement and understand exactly what their drivers
are and where they are coming from.
“We here at SOS need to train our people to deal with those knowledge gaps when dealing with procurement people. We need to train our people in dealing with buyers, for whom print is only one of many channels to market and only one of many items they buy. They are procuring lots of other materials.”
Some printers say the rise of procurement is not that bad a thing.
Scott Print business development manager Rio Chard says sales are not necessarily harder these days, but it does create a different service environment.
“It’s a different market from what it was a while ago and customers are more astute to different printing techniques and methods. It is a different sort of relationship; it’s more two-way. A lot
of people come to us now and we work together to get a project completed and they might have different ideas and we can work with them on that.”
It also means offering completely different goods and services, she says.
“Coupled with the evolution of management information systems, companies are having more streamlined systems in place to increase overall organisational efficiency.
“This means there is a need to adapt your services to the requirements of individual clients to fit in within their corporate structure and objectives. Today’s procurement people are often after a partner more than a supplier that can offer a tailored proposal to suit their systems. For instance, a lot of large corporates are now requiring that you assist with their triple bottom line, showing that you are doing your bit for the environment, for instance by having ISO accreditations, and have the right technology, service and products available.
“These components combine to lead to higher levels of accountability for the printer so, therefore, there are these hoops to jump through when first getting on board with the savvy procurement manager… It does mean though, that once you have successfully completed this induction, you are able to have a successful long-term partnership.”
She says printers could handle it by increasing what they offer clients.
“We are finding that you really have to expand your product offerings to sell auxiliary products and services to be able to offer the complete print solution. Clients are seeking this ultimate partner to really offer the whole process from print through to warehousing and online ordering, and if you can provide this all in-house you are already on your way to get over some of the hurdles that can make it difficult with savvy print buyers.”
Nick O’Sullivan, a director of Lithocraft, says he finds procurement people are sensible and good to deal with. He says the conversations are not about price but issues like the guarantee of supply, quality and account management.
“I welcome those conversations, I want more of it,” O’Sullivan says.
He also rejects suggestions that salespeople don’t have the skills, pointing out that it’s impossible to generalise.
“Some salepeople are great; some are absolute morons.”
Typecast: salespeople
Relationship Builders The people focus on developing strong personal and professional relationships across the customer organisation.
Hard Workers These salespeople go the extra mile, put in more calls per hour
and conduct more visits each week than anyone else
Lone Wolves Self-confident operators who follow their instinct rather than the rules and who want to have things their way
Problem Solvers Detail-oriented people who focus on post-sales follow-up
Challengers This group is the most well-represented among star performing salespeople. They use their deep understanding of the customers’ business to take control of the conversation, even if it means sharing potentially controversial views by raising questions about the challenges the customers face and offering solutions.
From The Challenger Sale: Taking Control of the Customer Conversation, Matthew Dixon and Brent Adamson, 2011
Top tips: Understanding procurement
Salespeople need to invest time in understanding procurement, how it operates and sets it priorities, and what its goals are.
The single biggest opportunity to drive growth and build on customer relationships is the quality of the insight that the printing company delivers as part of the sales process. It’s about identifying the challenges the customer is facing and offering solutions.
It is important for the printer to conduct deep research into customers’ current challenges, priorities and strategies. That provides the raw material for the insights and challenges.
This will require work from around the organisation, not just the sales team. Marketing needs to ensure the insights generated are effectively packaged, product teams need to create products that meet the customers’ unappreciated needs, engineering teams need to ensure the products meet the customers’ stated needs and financial teams need to account for the increased amount of time required to sell based on challenges and insights.
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