In this blog our procurement specialist - David Atkinson - explores the relationship between the Procurement professional and the Sales Account Manager.
The subject of professional procurement is complex and regularly negotiating contracts is a skill that Sales Account Managers need to develop and understand.
We often get asked how modern-day category managers think, and what is it about their practices that create such tension in customer-supplier relationships.
The role of procurement is to extract the maximum and sustainable value from external business relationships, appropriating value from the supplier (and supply chain) so that his or her organisation gains and sustains its own competitive advantage. This requires that products and services are secured at the lowest cost and price, the highest quality, fastest response and maximum flexibility possible, and a better functional specification than available to competitors at equal or lower cost.
As a Sales Account Manager this can be a tricky path to navigate with constant challenges from competitors and the risk of contracts not being renewed.
Here are some of our top tips to help Sales Account Managers to manage the negotiations in the right direction and head for success.
Identify the unmet and underlying needs of your customer
Knowing the underlying and unmet needs of customers is core to the activities of account managers responsible for strategic customer relationships, and sales people generally. The range of possible needs and expectations of customers can be vast, even unique, making every B2B sales situation different, and therefore requiring tailored responses from the supplier.
By consistently adding value and assisting your customer in a meaningful and effective way, this can add weight to the business case to procurement for continuing to use your company as a supplier.
Excellent customer service
Providing excellent customer service should already be a key component in your supplier-customer relationship. If it’s not, then it urgently needs to be addressed.
Through consistently nurturing customer relationships and developing an atmosphere of collaboration, successful account management teams can deflect the desire for procurement to investigate alternatives or start to build relationships with the competition.
Procurement teams are busy, so difficult supplier relationships will make those contracts a higher priority for review and to offer out to tender with alternative suppliers.
Understand the buyer’s perspective
When in discussion with procurement about the terms of the contract, good Sales Account Managers have a clear understanding of how the buyer positions their service or product in context of the overall business.
Understanding the customer’s perspective i.e. what they buy and how they classify their spend, will give the Sales Account Manager a 360-degree view of the relationship and an advantage over their competition.
By putting their product or service in context, Sales Account Managers are able to respond appropriately and offer more useful collaborations that add real value to the customer.
Present the details
Presenting a detailed plan to procurement in terms of costs, delivery and recommended relationship management protocols helps to build confidence in your business as a supplier.
Being specific about how the relationship will be governed and managed, with an outline of reviews and check-ins show the buyer there will be no hidden surprises and helps them to consider you as a collaborative partner.
Sales Account Managers ideally need to speak in quantifiable terms that can be measured and tracked. It makes their value propositions more compelling.
Perhaps our biggest piece of advice is to prepare, prepare and prepare some more. Time spent by Sales Account Managers investing in their negotiation strategy is valuable and can really help to build an advantage.
Paying lip service to preparation and ‘hoping for the best’ will mean missed opportunities for your business and could be the difference between success or missing out on the contract this time, or even for good.
By really doing the homework in terms of identifying what your customer needs, how your offering is perceived and where you can tangibly add value, you have the best chance of being successful and being considered as a trusted partner to the buyer.
J A Consulting works with leading world organisations to develop their account management teams with the strategy, tactics and skills needed for successful negotiations. Through our ‘Winning with Procurement’ programme, we upskill Sales Account Managers so that they are better placed to handle and succeed with sophisticated, customer procurement departments. Contact David or John to learn more.