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Ian, welcome to the same side selling podcast. I am

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your host. Ian Altman. On this episode, I want to talk about

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procurement and how people deal with procurement and some of the

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biggest mistakes that they make, and what you can do instead. So

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during one of our live coaching sessions in our same side

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selling Academy, someone brought up this notion, and they said,

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Look, I'm dealing with procurement. I gave them some

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different suggestions to handle. And they said, well, we can't do

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that because their procurement people insist that we do things

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a certain way. They insist that we give them line item pricing.

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They insist that we tell them what our cost is so we can

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justify why we're charging more. And the question I asked was

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this. I said, So, so what are the things that are non

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negotiable from your perspective as a vendor, as a supplier, as a

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seller, what are the things that you demand? And they said, Well,

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what do you mean? I said, Well, so what you just told me is you

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have to provide line item pricing for every single item,

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and you have to disclose your cost basis for each of those

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things. Presumably, they also need to know your shoe size,

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your inseam, whether or not you dye your hair, and when's the

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last time you had a physical examination? Because if we can

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let our customer make unrealistic demands, then there

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must be no limit to what demands they can actually request. But

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instead, what if we start thinking about what is in our

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customer's best interest? So if we allow ourselves to be

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commoditized, then we could easily say, look, here are a

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bunch of line items, and here's what I charge for each one, and

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here's how much profit I make for each one. And now our our

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customer, their procurement people, in essence, now dictate

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what your profit margin can be and what your value might be.

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That's a trap. It's a mistake, and that puts you into the role

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of an order taker, not as a subject matter expert. So the

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first thing is that we can't get into this situation where we

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accept unrealistic demands from our clients or prospects,

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especially from their procurement people. The second

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thing is that people will say, Oh, and here are the rules. You

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have to follow our rules. Well, that's fine. Those are their

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rules for procurement. But what are this? What's the structure

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that you suggest to your clients that helps them achieve the

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greatest results overall? Well, that's a totally different

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discussion. So how do we do that? Well, early on with we

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want to engage the line of business people. And if you

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start with procurement, you might say, look, here are some

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things that we look at that really dictate success with our

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clients. We want to understand how they're going to use this

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what's worked and hasn't worked in the past, because it might be

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that our organization would just replicate the same mistakes you

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had in the past, or there might be things that we would do

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differently to give you a better outcome. But if we can't

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understand those, there's a chance you could spend money

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with us and not get a great result. How could we engage

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these other people to make sure that what we're doing is

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actually going to move the needle? Otherwise, you're better

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off just using whoever used in the past. More than half the

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time, the procurement people are going to say, No, we can't do

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that. And the reason why is they already have a preferred vendor,

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and it's not you, but a subset of the time they're going to

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say, Oh yeah, that makes a lot of sense, which now shows that

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they actually might have a genuine interest in what it is

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that you do. Now we want to start articulating what those

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things are, what matters to your client, what would you measure

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for success? What worked well and didn't work well in the

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past? What do they wish they would change? And that allows us

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to now focus on the things that could be the differentiators for

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your business compared to what they've experienced in the past.

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Let's think of it this way, if you're 5% cheaper, but your

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client doesn't have a good outcome? Was it a good deal? The

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answer is no, it wasn't a good deal if they don't get a good

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outcome. So we need to shift the focus from price to results. So

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how do we do that?

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Well, it's simple. We ask questions like, just because you

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spend money with us doesn't mean we're successful. What would you

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and I measure together six months down the road, a year

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down the road, to know that we're successful? And they'll

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give you an answer that question and then say, Okay, so let's say

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we did everything we said we would do what might prevent you

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from getting those results down the road. And they'll use. You

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identify their own deficiencies, in which case you might have

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services that would complement or overcome those deficiencies.

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Now, when procurement comes back to you and says, Well, I need to

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get a line item of every single thing, you might come back to

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them and say, look, here's what you said. You're going to

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measure for success. That's what we want to be held accountable

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for. So if you want us to be the single point of accountability,

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then delivering all of these products and these services

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together and delivering those results, here's what the cost

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is. Now I will give you line item pricing for every single

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thing on there, which I'll probably list the retail pricing

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for everything, and the combination of all those is

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going to be less. So it might be that I, with you, listed

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everything individually. It might total $200,000 you might

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tell the client, if you do all this through us, it's $175,000

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and procurement might say, Well, how's that broken down? Say,

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Look, if you want, you can say it's 175,000 or $174,900 for all

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the product and it's $100 for the services, or you can flip it

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the other way. Really doesn't matter, but if we're ultimately

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accountable, we're going to be accountable for the whole thing

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at that rate. And what you're doing is you're showing that

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you're really buying the solution, not just the items.

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Now you might get a client who truly is coming to you just to

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buy commoditized items. They're just trying to buy widgets from

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you. Now you have to decide, are you okay selling based on price?

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Because if you don't provide any services, if you don't provide

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any differentiation, then why would they pay more with you

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than with somebody else? So when you get in that situation where

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your client says, oh, here are the rules that we have, what you

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want to counter with is, here's the path that we have found

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drives the greatest results for our clients. How do we need to

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adapt that for your purposes? So their non negotiable was, here's

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the way we want to buy stuff, and your non negotiable is,

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here's the way we deliver success. And now let's have a

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discussion about how we need to modify our formula for success

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to fit the way you want to buy. And more often than not, your

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client will come around to see that the way you're approaching

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things for success is actually in your mutual best interest.

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There are topics you'd like me to cover. Just drop me a note to

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Ian at Ian altman.com I'll see you on the next episode of the

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same side selling podcast. So long you.