Understanding procurement professionals is a major step in the sales cycle. I have heard the words “It is a done deal. It is in procurement” uttered by many salespeople of varied skill sets and levels. Getting a deal to procurement is not getting it done. There are many ways a contract can die on the desk of a procurement person, let’s look at a few.
If you have a product or service that can be provided by other companies you still have a lot of work to do in pushing that deal to close. The first and most often reason sales die in procurement is, your deal is not the only offer being considered. Your contract could be sitting next to offers of your competitors as the procurement professional dissects each contract line-by-line.
The procurement professional will look at each line item on the contracts weighing the value of each entry. If your company is offering free training or free support with a product or service, add a dollar value to it. The training or support can then be balanced out later as a one-time promotion or discount. Free training or support could also be your final negotiating concession. Your competitor is probably charging for these services; this will further validate your cash assessment of these line items.
The second assumption many sales people make is thinking a procurement professional is a finance clerk rubber stamping contracts. This conjecture is, o-so wrong. Most procurement professionals are sent to many sales trainings. In some cases, procurement professionals get more negotiation training than most salespeople do. Trust me when I say procurement professionals have seen and heard every close.
Most procurement professionals receive promotions, bonuses and commissions based on the percentages they get sales people to slash their contracts by. With this in mind do not let you bottom-line deal get to procurement, leave yourself a little room for the final agreement to negotiate. If you can help the procurement professional show they were able to get an additional 5 – 10% saved on the deal it becomes a win-win for all parties involved.
The bottom-line is just because the deal has left the end user’s desk doesn’t mean it will get done. There are multiple places within legal and procurement a deal can die. My best advice is to prepare for these contingencies and do not assume there is a rubber stamp anywhere in the process.