A little over a year ago I did a month-long research project on the "Purchasing" profession. In that month I interviewed over 25 purchasing professionals, went through numerous online classes, and read every negotiation/purchasing book the national association recommended. When I decided to start this project, I had no idea what I was getting myself into. In this blog I am going to share, with you, a few of the tactics and strategies that purchasing professionals, around the world, use to influence sales professionals!
Some thoughts to consider before we start...
1. This information is not industry specific. I interviewed purchasing professionals from wide range of industries.
2. Not all purchasing professionals fall into these categories. When searching for purchasing professionals to interview, I asked for the toughest, most aggressive purchasing professionals out there. The reason for doing so is so I could illustrate the extreme...which would make everything else a cake walk!
That being said...let's get started!
Who are these "purchasing professionals"?
- They are some of the most intelligent and passionate professionals I have encountered.
- Purchasing professionals live, eat, and breathe negotiating. This is not a hobby for them...it is their life!
- They are some of the most consistent learners I have ever seen. Purchasing professionals are regularly reading, going to workshops, and listening to industry audio programs.
-They are extremely competitive! Almost every individual I interviewed had some history of playing a highly competitive sport. They don't only want to beat us...they want to dominate us!
In the next section we will discuss 3 things...
1. I will illustrate the strategy used....
2. What the purchasing professional hopes to gain by using it...
AND
3. How we, as sales professionals, can defend these tactics!
Price Is Too High - This is one of the most used and most effective strategies used in the purchasing profession. This might as well be an introduction for some PAs. Purchasing professionals sometimes have not even considered the price but they feel it is a great way to start the conversation!
Goal of PA- To get the sales professional out of their comfort zone. The number one goal of a purchasing professional is to identify 3 things... - Will the sales professional break on their price? - How fast will the break? - How far will they break? The more price is addressed or defended...the more power it has in a negotiation!
Our defense- stand our ground. If we break on our price right out of the box, the purchasing professional will say to themselves, "Wow, they are breaking already! If they are dropping the price this fast then they must have some significant room to move!" In response, we can also ask one of these three questions in response... PA Statement - "Mary, I am sorry but you product is too expensive!" Our Answer- 1. "Ok John...help me understand how you evaluate price. Is it cost of ownership or the initial cost? 2. "Compared to what?" (definitely an edgier answer but will let them know we are holding firm) 3. So! It's worth it! (very edgy response...but can be extremely effective in the right scenario)
Nice Guy- This is where a purchasing professional will attempt to create a friendly relationship right off the bat. They may ask about our family, compliment our professionalism, or even ask about our hobbies. They will do whatever they can to get us to like them!
Goal of PA- To get us to let our guard down. It is a very effective tool to get us to compromise our position...because we enjoy working with them. They feel that if we like them then we will be willing to give up a chunk of the margin.
Our defense- Think about our family, our home, our car. Will that individual send our children to college? Will that friend pay our mortgage? We get up each day to tend to our business and that is what we must focus on...our business. If that person has a genuine desire to establish a relationship with us, they will understand our position.
The Guilt Trip- Have you ever made a mistake during a meeting? Have you ever showed up late to an appointment? Quoted a customer the wrong price? Didn't know an answer to a question you should have? Have you ever forgotten to call a prospect back? If we have answered yes to any of these then we have given the purchasing professional a gift. They will take our mistake and use it as leverage in the negotiation.
Goal of PA- To make us feel so bad for our mistake that we are willing to drop the price just to make it up to them. This one is not used as often but, when used, is almost always effective! - Salesperson- I'm sorry...$150 is as low as I can go. - PA- That is as low as you can go?! You showed up 30 minutes late and you are lucky to be sitting in my office right now...and now you are saying $150 is as low as you can go? - Salesperson- I apologize for being late. I guess I can do this for you for $140. (their forgiveness becomes a concession they have given us. Now that they have given us a concession...they want one from us!)
Our defense- Apologize and move on! We will make mistakes and it is crazy for anyone to believe that we will be perfect. That being said, should we give away $10,000 of our company's profit for being 15 minutes late? I don't think so. We must apologize and jump right back into the negotiation...without baggage!
The Nibbler- is when we have come to an agreement, we are about to sign papers, and the purchasing professional says, "You do have a rebate program don't you? Do you give discounts for paying early? Training for our people is included in this price, right?
Goal of PA- is to give us a taste of the sale and drive us to start giving things away. They use this tactic to get us right on the cusp of the sale and begin asking for a few more things. Sales professionals can be much more giving when the salivation begins.
Our defense- When we begin giving things away it can become a slippery slope. Part of the reason this tactic is such a success is because is is almost never recognized, in the heat of the discussion. We must focus on the big picture and not get tempted by the idea of closing a sale. At this point in time we must pause and say, "Are these things important to you? If you would like, we can re-work the contract to make sure that you get everything you want. Would you you like me to begin re-working the contract?"
The WOW!!- If we have a product that is relatively pricey in the industry the purchasing professional may say..." $60,000?!?! WOW!!"
Goal of PA- To get us to begin lowering the price or start giving away concessions. They want us to feel like we are about to get kicked out of the office. This is really just a strategy to get us to question our position...and it is very effective.
Our defense- Stand our ground. We may say something along the lines of, "Yup $60,000 is right. I would sell it for $75k if they would let me." If we are confident in the price of our product they will hear it in our voice. If we second guess the price...so will they!
These are just a few of the many tactics used in the purchasing profession. I hope this helps and please let me know if you have any questions regarding the material.
Jason@aplayersonline.com
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