Much has been written on differences and similarities of B2B sales and procurement professionals. Sometimes these two types seem to come from two different planets, but then we hear talk of synergies and the need to cooperate more closely. Let’s first discuss the “Women Are from Venus; Men Are from Mars” perspective. The saying comes from a book title of John Gray (1992) who claimed that men and women are psychologically speaking fundamentally different. This then (according to Gray) has an impact on how the two sexes communicate and tackle problems.
So let’s assume for a moment that sales people come from Mars and procurement people live on Venus. The below table summarizes some characteristics as I recollect them from my practice*.
Starting in the academic realm: B2B sales (& marketing) seem firmly positioned in the domains of commerce and entrepreneurship, whereas procurement (purchasing) is in the domain of operations management or at best in supply chain management. Still following the two planets concept: Procurement struggles with executing corporate strategies, with demands from internal customers and stakeholders, and with growing requirements on sustainability and risk management. Public procurement additionally must be transparent and adhere to strict regulation. Sales people struggle with the digitalization of procurement systems, with increased competition, margin pressures, shorter product life cycles, and complexity & volatility in market demands.
Sales training programs still use the AIDA model (Attention, Interest, Desire, Action; Strong, 1928) and recent research suggests this model still works (Hassan, 2014). Fortunately, sales programs also use more modern models, such as the SPIN model (Rackham, 1978). Via this model, the seller tries to determine problems of the buying organization via four types of questions on the Situation, the Problem, the Implications, and the Need-Payoff. These four questions combined help the seller to make a buyer aware of his problems, and then the seller can offer his/her solution. An alternative is using a selling technique presumably based on Socrates (400 bc) via open questions that should stimulate critical thinking with the potential buyer.
These models have proven their value in practice but then ignore tendering processes in large-organisation procurement. Such processes (though sometimes perceived rigid and formal) are demand-driven (pull approach in SCM jargon) and do not always fit the push approach of a sales organization. Hence we have a contradiction: we need to listen to the voice of the customer (marketing orientation, e.g. Kohli & Jaworski, 1990) and try to understand the customers desires, insights and opinions. Versus we need to push products & services and hence push sales for the continuity of our own organisation (sales or product orientation). But that’s not the point I wanted to make in this Saturday blog.
The point is the mismatch between the potential value that the seller can offer versus the value for money that the buyer needs in a particular case. In part, this mismatch relates to differing (short term or long term) personal or organizational objectives, in part to different processes or timeframes. Take for example Dutch public procurement: a massive 60 billion euros of annual sales goes via the digital portal TenderNed. One important sales competence “building personal relationships” does not work via this portal. This competence is only effective after the seller has submitted a winning bid; but then the rational contract and supplier management phase starts with KPIs, agreed quality levels, progress meetings, etc. As most public tendering organizations chose the so-called open procedure, the opportunities for suppliers to discuss specifications and options are limited. Luckily there are more procurement routes, each offering limitations and possibilities for a sales force (e.g. for construction or healthcare in the UK; or for public procurement in Scotland).
Executive sales training programs sometimes recommend bypassing the procurement department and going straight to the decision maker. Whether this is a good strategy may depend on the procurement maturity of the client or the type of organization. Paesbrugghe e.a. (2017) for example has found that as purchasing evolves (i.e. from price-focused, cost-focused, solution/innovation focused, to strategy-focused) each purchasing stage requires a different sales strategy. In more advanced purchasing phases bypassing attempts may have detrimental effects. Moreover, procurement in for example public organizations acts as a dominant gatekeeper, and tender legislation or company policies forces such organizations to involve the procurement department.
Interested sales teams could then better try to understand the process and write a winning bid. (See e.g. the suggestions from this Australian consultancy firm). Especially for the non-transactional stuff, both sales and procurement need a better dialogue on their roles.
Two To Tango
As the 1950’s song aptly said: It Takes Two to Tango: both the seller and the buyer need to agree on an optimal relationship. Since long this has been done via simple account management models or 2×2 supplier portfolio models (e.g. Kraljic, 1983) which have their benefits and limitations. Gelderman and Van Weele (2003, p. 212) have for example recognised nine supplier strategies in the Kraljic’s matrix of which several are of a win-lose nature. Other research (e.g. Dubois & Petersen, 2001) have concluded that the Kraljic’s matrix is not suitable for managing partnerships. Recent research in the US has popularised the vested business model that focuses on win-win relations. (More on Vested in a future blog).
In summary, my guess is that sales and procurement people can benefit from an understanding of realistic relationships or business models. Both parties must possess & exercise their ethical values. (See also one of my blogs). Both need to reflect & learn from best practices. Both parties need to master relevant strategies and tools e.g. in buyer-seller negotiations. (For Dutch blog readers – check our digital negotiation book special in Shoppen Voor Professionals; published Mid-July 2017).
Things of beauty are not only a joy forever (John Keats, 1818) but also contextual as Beauty is in the eye of the beholder (Margaret Hungerford, 1878). The same seems true with the application of relation management tools. At Hanze University we recently worked on an SME management tool that assesses capabilities and ambitions in SME buyer – seller relations. Such risk-based assessment tools exist for simple to complex relations between large organisations (e.g. Zsidisin, 2004). However, we developed this tool in action research and inductive from the SME context. Hence, we posit that our tool gives a better allowance for this SME context, which at least the SMEs participating in our research have confirmed. We plan to test this tool with more SMEs. Such tools can help sellers and buyers to assess the quality of their relation.
Or More Together?
SME buyers do not live on Venus and SME sellers do not come from Mars. They know they live on the same planet earth and both want to remain in business. Recently I saw an SME owner decide to continue his business with a current logistics supplier. The pricing was higher compared to known competition but this SME owner trusted his intuition. The SME value proposition was product leadership and he believed the current supplier could provide several (non-quantifiable) benefits. To finalize: one of the critiques on the Gray book is that he stereotyped us humans too much. (Kimmel, 2017 link to an interesting youtube vid). Let us not make the same mistake in buyer-seller relations. Enjoy the weekend.
* Most of these stereotypes are not true.
** At Hanze University, in September 2018 we again run the honors minor of B2B Sales & Innovation Talents; with nice interaction between sales and procurement. In February 2020 we will again run the International Procurement minor, with some advanced buyer-seller negotiations. Hanze is becoming more entrepreneurial in its teaching and applied research.
*** I’ve also published this blog via my LinkedIn profile aagstaal. Suggestions and feedback are much appreciated. TXS.
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