Why procurement and service businesses are natural allies

Selling services is never going to be completely transactional and all about price. It is always about something more. Buyers need help to navigate complex problems that weren’t conceived of a year ago – let alone 10 years ago – and service providers can help them.

Unfortunately, many people find selling to procurement complex, adversarial and intimidating. It doesn’t have to be that way. In fact, if you sell services you will actually benefit from cultivating a relationship with procurement.

According to procurement expert Adel Salman, procurement doesn’t “own” services expenditure (although they are responsible for raw materials) and has to satisfy many other stakeholders who are actually using the service and paying for it. Therefore, it is part of procurement’s job to engage good service providers and help them deliver exceptional performance.

Increasing expectations of the procurement function are also driving this trend. A survey of 70 chief executive officers by brain.net revealed that CEOs expect much more from procurement departments in areas like innovation. In his book Selling To Procurement, Christopher Provines says that “…increasingly, particularly for more mature organisations, procurement is being asked to help the company grow.” He explains that innovation needs to be thought of in the broadest sense – process/business model innovation and product innovation – and that often, suppliers can contribute significantly to both.

Provines cites a survey of more than 300 chief purchasing officers by CAPS Research, a supply chain research firm, which revealed that about 60 per cent saw innovation from suppliers as “extremely important”. This is encouraging news for suppliers, and especially for suppliers of complex services.

Robyn Haydon is a business development consultant specialising in business won through formal bids, tenders and proposals. She is the author of two books on proposals and sales, including Winning Again: a retention game plan for your most important contracts and customers http://www.winningwords.com.au/winning-again/

Five characteristics of clear winners

It’s no longer enough just to be a good supplier. We must strive to become great suppliers, and this doesn’t just mean being great at what we already do for our customers.

Something that I’ve noticed over many years of working with incumbent suppliers in many different industries is that the most successful ones share a very clear and focused pattern of behaviour that helps them retain existing their contracts, while others are setting themselves up to lose. The most successful suppliers are those that I call the ‘clear winners’.

For me, the term clear winner describes the mindset of the business development leader as well as the course of action that the organisation follows to win and retain business.

Here are five ways that business development leaders demonstrate the mindset of a clear winner.

  1. Clear winners love what they do and speak eloquently about their business and its opportunities.
  2. Clear winners have great ideas with the potential to deliver genuine value for their customers. They focus on serving their customers first and themselves second.
  3. Clear winners are truly excited about the opportunity to work with customers. They see this as a privilege and not just a ‘numbers game’.
  4. Clear winners believe that there is always a better way of doing things, even when there are already great at what they do.
  5. Clear winners have a lot on (like everyone else) but always seem to manage to focus on just the right thing. You’ll never hear them complain about being ‘busy’ – instead, they are energised by the work they’re doing.

Clear winners may seem lucky – like they are 'on a roll' – but they know the real story; to achieve at this level takes courage, investment and hard work.

This is an extract from Robyn’s new book Winning Again: a retention game plan for your most important contracts and customers. To order your copy, go to http://www.winningwords.com.au/winning-again/

Why gratitude wins business

When we first win a customer or contract, it’s natural to be on a high and very excited – a bit like the first flush of love. But when business as usual kicks in, it doesn't take long before we are taking the customer (our partner) for granted. In doing so, we tend to forget what a risk it was for them to choose us in the first place, and the gratitude we felt during the honeymoon period.

Last year one of my clients was bidding for an important government contract. The Department in question was looking to reform this part of the market, so we had several bids in place and the team was braced to expect change. The first call we received was to notify us that we had lost our (small) current contract. The CEO, always gracious under pressure, was genuine in thanking the Department rep for the opportunity to participate and assured him that she understood the reasons for the loss. He was grateful and surprised to receive such a reaction, having made similar calls to other unsuccessful suppliers and been given a much more aggressive and angry reception.

Not long afterwards, our team got better news. We had won a much larger contract that not only replaced the revenue (and jobs) of the first one, but increased both exponentially.

No matter what business you’re in, long-term contracts are a game of strategic relationships.

When there is a setback, think carefully about the future and don’t burn your bridges.

Expressing true gratitude for the opportunities we've already been given in business actually helps us to win even more. We never know what lies ahead, and we can achieve so much more with the customer’s backing and support.

This is an extract from Robyn’s new book Winning Again: a retention game plan for your most important contracts and customers. To order your copy, go to http://www.winningwords.com.au/winning-again/

How we block ourselves from being good negotiators - by Bri Williams

Bri Williams runs People Patterns Pty Ltd, a consultancy specialising in the application of behavioural economics to everyday business issues - http://www.briwilliams.com.au  Negotiation is all around us because it is really about relationships. We fear negotiation because we think it is adversarial, and our behavioural biases get in the way of us getting into the headspace of our customers.

Here are five behavioural biases relevant to negotiation, and how to recognise and overcome them so that you can negotiate a decision to help all parties.

Not Invented Here Bias

We love ideas but struggle to take those of others on board. You may have heard this described as the Toothbrush Principle – everyone knows toothbrushes are important, but no one wants to use someone else’s! For negotiation this means you need to work extra hard to understand and consider an idea that the other party proposes.  Better, try collaborating on a mutually beneficial idea, building it together to ensure all parties feel like they own the idea.

Loss Aversion

It’s likely we enter a negotiation more worried about what we stand to lose rather than gain.  This can make us defensive and panicky. To overcome loss aversion it can be helpful to draft your worst case scenario and then what you would do to survive if that happened.  It means you will enter the negotiation without fear and being able to concentrate on a solution.

Actor-Observer bias

We tend to blame the mistakes of others on their character, and our mistakes on the situation.  For instance if someone cuts you off in traffic, they must be a bad driver.  If you do, it’s because you needed to get into the other lane to make the turn. For negotiations this means we are prone to attacking the person and their motivations, overlooking the situational factors that may have caused the issue. To overcome Actor-Observer Bias (also known as the Fundamental Attribution Error), focus on the situation not the character.

Confirmation Bias

Noticed that it’s easy to find stats and facts that support your view? Confirmation Bias is our tendency to zone in on information that confirms our understanding of the world, ignoring, distorting or rejecting contradictory input. In a negotiation it means we are blinkered and may miss facts that actually disaffirm our position. To overcome Confirmation Bias you need to do a 360 degree assessment of the issue. In other words, how would you argue the case for the other party? Remove yourself from the situation, step into the shoes of the other party and you’ll suddenly find a world of new data that can be used by you both to construct a solution.

Revenge It is deeply ingrained that we seek revenge for actions we see as unjust. Despite our best selves, when someone cuts us off in traffic there is that little part of us that wants to tailgate to let the other driver know how dangerous they were. Sadly that little part of us is too often the foot on the accelerator.  In a negotiation there is likely to be a lot of negative emotion, a desire by some for revenge.  To overcome revenge – your desire or theirs – takes a lot of deep breathing and distance. When things get heated (known as a “hot state”) you are extremely likely to make poor decisions so take a break, calm down and refocus on the issue not the motivation.