Four lessons from sales for procurement

Showing empathy with the challenges suppliers face in a negotiation can help relationships go further.

Beth Loudon, head of procurement development and sourcing at NHS Shared Business Services (SBS), said she had worked in both business development and purchasing at the organisation and the two functions faced many of the same internal blockers.

Speaking at the CIPS UK Conference, Loudon said: “[Sales] are battling a lot of the same issues that I am, it’s just a different perspective.

“I’m getting far more from the relationships with suppliers by showing empathy for their challenges. I find it much easier now to disarm those difficult discussions with suppliers, partly because I understand their pain.”

Loudon headed up business development at NHS SBS for a number of years before moving back to her “spiritual home” of procurement.

Here are four lessons Loudon shared from her time in sales:

1. Sales have to deal with internal stakeholders too

When working in business development, Loudon said the biggest sales she had to make were internal. At times she “had to beg” to get reductions she could pass onto her clients.

Working in sales was also the first time Loudon saw the profit and loss structures suppliers built into their products and realised how inflexible they were. “I couldn’t negotiate anything on overheads, that was stuck, I had no chance of negotiating that to get the prices down for my clients,” she said.

2. Sales have data on you

“They’ve invested in you as the customer and know everything about you, far more than I’ve ever been exposed to in procurement around understanding the spend,” said Loudon.

Sales also segment their customers in the same way that procurement segments suppliers, so don’t be guilty of over-inflating your importance as a customer, Loudon cautioned.

“Of course a supplier will tell you you’re the most important person in the room at that moment, but really understand how important you are to those suppliers and why,” she said.

3. Sales are better at the internal sell

Being able to sell the value of their function to their own business often helps sales get more investment in their teams, including in training and development, said Loudon.

Part of this is because it’s easier for sales to draw a line between its function and business growth. “Our organisation had growth targets and everyone understood how sales contributed to that. It is less understood how procurement contributes to a growth target,” said Loudon.

All business functions should be able to draw that “really straight line” so that everyone in the team understands how they’re contributing to the business objectives.

4. Sales don’t always understand bidding processes

There are a lot of misunderstandings in sales around how procurement decisions are made, particularly in the public sector. But this creates an opportunity for procurement to support the sales teams to develop bids, which can raise the function’s profile.

“That sales team has to deal with people like me and my team on a daily basis, so supporting them around what a good bid looks like and how to build a team to respond to bids just makes sense,” said Loudon.

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