Our purchasing software is designed to make purchasing managers more effective. That’s why many of our blog posts focus on sharing tips that can empower purchasing managers to reduce their stress and be even better at what they do. While we generally write with purchasing managers as our target audience, we thought it would be interesting to shake things up and write a post that’s targeted at a different audience.
Specifically, we want to talk to salespeople about what they can do to find more success with purchasing managers. We’re well aware that purchasing managers are often perceived as cutthroat buyers who only care about price. We also know that salespeople may view some purchasing managers as an impenetrable fortress. Although there can be some truth to those stereotypes, it’s important for salespeople to put themselves in the shoes of a purchasing manager.
In a typical small to medium business, a purchasing manager is going to be juggling numerous tasks every single day. Because purchasing managers already have so much on their plate, a salesperson who shows up out of the blue and starts aggressively pitching is probably going to be viewed as unwanted distraction.
If you want to connect with purchasing managers in a way that will lead to more positive interactions, here’s what you can do as a salesperson to find success:
Start By Building Rapport
Purchasing managers are often under a lot of pressure from their organizations. In many cases, what’s viewed as “unreasonable” by salespeople is simply purchasing managers following what’s expected of them as they make buying decisions. This is why it’s important for salespeople to take the time to build rapport with purchasing managers. By doing so, they can understand what a purchasing manager truly needs, and then frame their pitch in a way that addresses the need.
Understand the Perception of Price
The reason so many purchasing managers are viewed as extremely price sensitive is because it’s their job to do things that way. Although that’s not something that’s going to change anytime soon, it doesn’t have to create an impossible roadblock. Instead, it’s something that salespeople can address by focusing on the value provided by what they’re selling. By being able to clearly sell the benefits of a product, a salesperson can find more success by changing the perception of price.
Just as salespeople often stereotype purchasing managers as cutthroat buyers, plenty of purchasing managers stereotype salespeople as being insincere. The main reason many purchasing managers feel that way is because they’ve had interactions with salespeople who aren’t sincere. So if you want to break that stereotype and build the type of trust that’s needed to close a sale, it’s important to find opportunities to show that you care about what you do and always try to approach interactions in a genuine way.
When a company discovers that they’re either purchasing something significant in an unstructured way or the need arises for a new category of purchases, it’s common for multiple suppliers to be evaluated. During the evaluation process, everything from best price to expected reliability will be taken into account.
As the role of purchasing continues to expand and grow, it’s easy to get caught up in all of the latest trends. While there is definitely value in knowing what’s new, it’s now more important than ever to have a really strong grasp on the fundamentals of effective purchasing.
The reason that fundamentals are so important is because many organizations are looking to enhance their purchasing through efforts like automation with purchasing software. Since automating different tasks can provide a major boost to what’s currently being done, it makes sense for companies to explore the different options that are available.
However, the key thing to remember is if there are currently processes in place that aren’t optimal, automation isn’t going to magically solve them. So before a company can reap the benefits of things like automation, they need to ensure that purchasing is being done in the best way possible. That’s where the three cornerstones of effective purchasing come into play:
It wasn’t that long ago when most forms of automation were only accessible to very large companies. But thanks to all the rapid advances in technology that have brought costs down over the years, businesses of all sizes can benefit from automation. One area where automation can be very helpful for small to medium businesses is with purchasing. Specifically, a more automated purchasing process can help take a business to a new level of efficiency. Not only will this help save time for everyone who is involved, but it’s also a proven way to help keep costs at an optimal level.
How can a business start transitioning towards an automated purchasing process? That’s exactly what we’re going to answer in this post, so be sure to keep reading:
It’s important for purchasing departments to maintain professional relationships with suppliers. That being said, it doesn’t always make sense to conduct business in an overly formal manner. The reason is being too formal can get in the way of effective communication. By finding smart ways to overcome that barrier, it becomes possible to reap the benefits that go along with having more personal relationships with suppliers.
As anyone with any amount of purchasing negotiation experience will tell you, this practice is part art and part science. While purchasing negotiation may seem a little intimidating at first, the most important thing to remember is it’s something that anyone can learn. Although there are people who make this process seem like magic, the only reason they’re able to do that is because they have so much experience with it. So as long as you’re willing to practice how to negotiate with suppliers on a regular basis by actively engaging in the process, it will likely take less time than you expect to get very skilled at it.
What’s the Key to Successful Purchasing Negotiation?
As mentioned above, a big part of purchasing negotiation success is practice. Since there are a wide range of scenarios that can come up during this process, it takes a little time to become fully familiar with everything you may encounter. In addition to practice, there’s one other component that can take you a very long way.
That component is preparation. The reason this component can have such a big impact on the outcome of purchasing negotiations is because knowledge really is power. By entering a negotiation with as much information as possible, a purchasing manager can put themselves in the driver’s seat of the negotiations.
Setting the Right Expectations for Different Suppliers
One of the most common mistakes that people make with purchasing negotiations is taking the exact same approach with every supplier. The simple reason a blanket approach doesn’t work is because your business doesn’t have the same relationship with all of its suppliers. That’s why it’s important to classify suppliers into A, B and C categories. By understanding the dynamics of a supplier relationship, you’ll be able to craft the right approach to negotiations with them.
Lose-Lose vs Win-Win
While entire books have been written on how to negotiate with suppliers, the most common approaches can be boiled down into two basic categories. With lose-lose negotiating, all someone cares about is bringing the price down as much as possible. Although saving money may sound like a win, the reason that’s not necessarily the case is because it comes at the expense of things like delivery times or quality.
Even though win-win is the less common form of negotiating, it’s the one that purchasing managers should strive for. While this approach still makes it possible to save money, negotiations are handled in a way that also ensures other aspects like quality and delivery are done in the best way possible.
Since getting really good at purchasing negotiations takes practice and time, you may be looking for a way to free up more of your time to focus on this very valuable activity. If that accurately describes your current situation, find out how Bellwether’s Purchasing Software can give you the additional time you need to hone your negotiation skills. Contact us to learn more today.
A PunchOut provides a way to connect directly to vendors’ catalogs. By using a procurement software to set up PunchOuts, buyers have the ability to order directly through the web. Given all the benefits that this type of system can provide, it’s not surprising that usage of PunchOuts has seen an increase of 31% over just the last year.
While that is a notable amount of growth, many businesses still aren’t utilizing this system. When asked why, one of the most common responses is that businesses are concerned that the process of setting up this type of system is going to take too much time or require a large amount of resources. Although it is true that some setup is required, the process is simpler than most businesses expect. And given all the benefits of having PunchOuts in place, it’s an investment that businesses end up being very happy they made.
Whether you’re already on board with this concept but need some concrete points to help build your case or you’d like to know more about exactly what can be gained from PunchOuts, we want to take a look at look at the exact benefits that this practice can provide to a business:
No Maintenance Required for Purchasers
Once you get PunchOuts set up, you won’t have to worry about any ongoing maintenance. The reason is because any required catalog maintenance will be handled by the supplier. Since this isn’t something that your business will have to spend time doing, it will save you both time and money.
More Detailed Information
Not only are PunchOut catalogs really convenient, but they’re also very useful. Since being online means it’s easier for suppliers to properly maintain these types of catalogs, they provide purchasing managers with more detailed information. From current discounts to correct shipping costs, the fact that suppliers can do real-time updates is something that’s quite helpful for buyers.
Centralized and Simplified Purchasing
In addition to concerns about setting up PunchOuts, one of the other hesitations that purchasers have is that this system will get in the way of them being able to negotiate. However, thanks to the fact that negotiated prices can be hooked directly into the system, PunchOuts actually provide a way to promote purchasing consolidation, which in turn helps to maximize spend management.
Save Time and Increase Productivity
Since most purchasing managers already have a lot on their plate, there’s no reason that they should be spending their valuable time trying to navigate broken systems. By making the transition to PunchOuts, buyers will be able to save time, increase their productivity and focus their energy on the types of tasks that will have a very positive impact on the business as a whole. Bellwether Purchasing Software can help you make this transition easier. Contact us today to learn more.
One of the things we’ve noticed over the course of working with a wide range of purchasing managers and suppliers is that the majority of purchasing managers don’t negotiate. This observation is based on our own experiences, as well as conversations with numerous suppliers. While suppliers aren’t complaining about the fact that more purchasing managers aren’t trying to negotiate, almost all of them have made it clear that they would be open to negotiating a deal.
Since this trend marks quite a bit of missed opportunities for most purchasing managers, we want to cover some tactics that any purchasing manager can use to easily negotiate more of their deals:
Take Time to Prepare
Research has found that 62% of people who engage in negotiations spend less than 60 minutes getting prepared. While that may not seem like a very big deal, the reality of negotiating is it’s all about how you go into this situation. Without proper preparation, the experience is going to be much more stressful than necessary. By taking the time to do all necessary research and really get yourself ready for the conversation, you’ll find that you have the confidence needed to be highly persuasive.
Utilize Open Questions
Because negotiations can take many different forms, there are numerous strategies that someone can utilize during the course of striking a deal. Open questions are one of the most underutilized forms of negotiating. The reason this type of question works so well during a negotiation is because it puts you in control by making it very difficult for the other party to evade what you’re asking.
Know What You’re Trying to Accomplish
Although this may sound obvious, plenty of people enter into situations involving a negotiation without first defining their specific objective. Since negotiations are all about give and take, it’s generally best to set an ideal objective, as well as a realistic objective. And depending on your willingness to work with a supplier, it may also make sense to have a walk away limit.
Don’t Be Overly Competitive
While negotiating can provide you with a rush of excitement, that doesn’t mean you want to get too caught up in the competitive aspect of this tactic. When people enter a negotiation with the outlook that they’re going to win every single deal point, they end up sabotaging what could have otherwise been a very positive experience for both parties.
As you can see from the above tactics, negotiating is a skill just like any other. As a result, it can take some time to feel really confident as a negotiator. But as long as you commit to negotiating and make an effort to continuously improve, you’ll be very happy with the results that you begin to get from this practice.
One of the big advantages of Bellwether Purchasing Software is that all vendor, price, procedural and other updates are automatic. That means these changes are seamlessly implemented without any need for technical support. The problem with many other types of purchasing software is automatic updates aren’t possible. Instead, all updates have to be pushed out in a manual and time-consuming manner.
With other forms of software that don’t support automatic updates, developers have a reason to avoid improving their software on a regular basis. But as anyone who works as a purchasing manager knows, this field continues to expand and evolve. As a result, many types of software quickly become outdated and end up making life harder for purchasing managers instead of helping them save time.
Since Bellwether Purchasing Software isn’t constrained by those types of limitations, we spend a lot of time speaking with purchasing managers about their workflow. By making these conversations a priority, we’re able to come up with new ideas that we can implement to make Bellwether Purchasing Manager Software even more useful. And because talking to purchasing managers allows us to stay on top of what’s happening in this line of work, we thought it would be helpful to spotlight a few of the best procurement practices for the current calendar year:
The Current State of Procurement
If you’ve been in this field for awhile, you probably remember a time when your primary mandate was to keep costs low. And your secondary mandate was likely along the lines of ensuring that supply is available at all times.
While we can all agree that thinking along those lines is outdated, the reason it’s worth bringing up is to show how far this field has come. In its current state, there are over a dozen responsibilities that professionals like purchasing managers must consistently deliver.
Identifying opportunities for savings, prioritizing improvement initiatives, delivering applicable quick win savings, improving spend visibility, ensuring proper integration and improving performance management are just a few examples of what’s required of modern purchasing managers.
How Procurement Best Practices Have Evolved
Since this field has seen such significant expansion, it’s not surprising that current best practices have evolved as well. While you could fill an entire book with the procurement best practices for 2015, the key takeaway is that this department needs to function in a way that’s active instead of reactive.
For example, procurement professionals now need to have a detailed understanding of their suppliers’ business practices. Although that’s a task that can take some time to accomplish, it’s the perfect example of the type of practice that needs to be in place so that a procurement department can run at optimal efficiency.
If you want to ensure you’re following best practices because you want to maximize your productivity, be sure to take a minute to contact us at Bellwether Purchasing Software to look at all the different ways we can help you achieve that goal.
At Bellwether Purchasing Software, we’re committed to improving purchasing managers’ professional quality of life. Whether that means easily automating purchasing processes or providing clear information that can easily be shared with others, we consider ourselves advocates for this field.
Since purchasing isn’t a practice that exists in a bubble, we’ve found that employees from other departments often have questions about different topics that fall within the scope of procurement. One of those topics is what’s meant by the terms strategic sourcing and tactical sourcing. Because we know from our conversations with purchasing managers that this question comes up on a regular basis, we wanted to create a resource that purchasing managers could point people to or even print out as a resource.
What is Strategic Sourcing?
Holistic, long-term and systematic are the three terms that best describe strategic sourcing. The approach to sourcing focuses on both the current and future needs of a company. One of the main focuses of strategic sourcing is having both the lowest TCO and lowest supply line risk. A big part of how strategic sourcing operates is by creating a closed loop link. Since this loop exists between the supplier and customer, it becomes possible to improve elements like delivery on an ongoing basis.
In order for strategic sourcing to be carried out in the most efficient way possible, it needs to properly address relationship management, supplier evaluation and spend analysis.
What is Tactical Sourcing?
Whereas strategic sourcing takes a longer-term outlook, tactical sourcing focuses on activity that’s transactional and short-term. Although there are some aspects of tactical sourcing that can be reactive in nature, it does take a proactive approach to ensuring that purchases are made at optimal prices, as well as that supply is available when it is needed.
This type of sourcing is most commonly found within manufacturing companies that are small to medium in size. Another area where tactical sourcing significantly differs from strategic is there’s no emphasis placed on understanding a company’s overall requirements. The same goes for really digging into what a vendor is capable of doing in terms of helping a company. Instead, most of the quick quote and order processes used in tactical sourcing are focused on providing production operations with the support it requires.
While strategic sourcing may seem like the obvious choice for a company, there are plenty of companies who have found that tactical sourcing best fits their needs. That’s why Bellwether Purchasing Software is designed to fit into a company’s workflow instead of requiring them to change all of their practices. By offering this type of flexibility, our Purchase Manager Software makes it easy to get everyone on-board and subsequently enjoy all the rewards of a properly optimized procurement process.
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