Let me explain...
Procurement typically represents a company's buying department. Procurement can be a part of someone's role (IT/Finance/BizTech) or can be a standalone department. Nonetheless, the duty remains the same: evaluate and buy things, efficiently. But, your company now uses hundreds of different software products, which becomes a significant burden from the team tasked with purchasing.
It is no longer scalable to buy "the old way", where procurement is introduced at the last moment to play hardball with the salesperson. This approach dampens the relationship between buyer and seller, requires too many negotiation calls, and is overall inefficient for both parties.
There's a new way to buy software and it's rooted in outcomes vs. tactics, transparency vs. surprises, and a mutual respect for efficiency.
Here are 5 ways to start improving your relationships with salespeople, to help you buy and renew software, better:
Step 1: Start with a discovery call
Slow down to speed up. Discovery calls have an important role in the sales process, and, they also play a role when procuring software. A discovery call is an opportunity for both parties to understand if a company is a good fit for a product or service. Currently, discovery calls are traditionally viewed as redundant when a deal has entered procurement ("all of these details have already been discussed"). However, starting a negotiation with a discovery call can add incremental value to both the buyer and the seller.
On your discovery call, be genuinely curious. First, learn about the company (the company's story and the value that the product delivers to customers). This will help you understand why your team is interested in the software. Secondly, learn about the salesperson. Understand what they are motivated by (price, timing, etc.) and ask if there are any deal blockers that they foresee.
Performing a discovery call will allow you to identify ways that you can help the salesperson and will also bubble up potential deal challenges to get ahead of.
It is the duty of procurement to be diligent (and at times, skeptical), but lean into curiosity to uncover how you can help the salesperson. By offering assistance, the salesperson will likely feel inclined to help you.
Step 2: Focus on outcomes
When buying software, focus on the outcomes that you are hoping to receive vs. the tactics. This will allow you and the salesperson to spend your time on the macro goals vs. the minutiae.
Here are 4 questions to ask yourself, to focus on deal outcomes:
- Product Outcome: What product tier does your team need, in order to accomplish their goals?
- Timing Outcome: When does your team need access to the software and when do they expect to receive X amount of value from the purchase?
- Price Outcome: What price (either total cost or price per unit) does your finance team expect? Why do they expect this price (ie: budget, price-to-value)?
- Terms Outcome: What legal and security terms are required for the current contract and what future protection is expected?
Once your outcomes are defined, compare them to the outcomes of the salesperson. Are they similar? If so, you're aligned. If not, this is an opportunity to problem solve, together.
Focusing on outcomes will allow you to work with the salesperson as a partner vs. an adversary.
Step 3: Speak the same language
For both the buyer and the seller, time is money. In order to buy and renew software efficiently, the buyer and salesperson need to speak the same language. Procurement teams can gain efficiencies by learning the language of software sales, and ideally, the language of the particular software provider. If you are able to learn the ins-and-outs of a specific vendor, you'll be able to navigate the conversation fluently.
More and more, procurement teams are hiring former software salespeople to join their teams to help buy and renew software. This is a forward-looking approach taken by companies who need more time back in the day. Typically, this approach is taken when your software stack surpasses 200 products.
Step 4: Steer towards the deal-breakers
Instead of avoiding deal-breakers in a negotiation, try to find them. Remember, both the buyer and seller care about efficiency. So, if there are deal-breakers, they should be discussed early and often. A 'no' is the second best thing to a 'yes', as it allows the salesperson to focus on other opportunities. This is one of the reasons why discovery calls are so important.
When talking about potential deal-breakers, be direct, transparent, and empathetic. The salesperson likely put a lot of work into your account and if it doesn't end successfully, they will be disappointed.
Here are a few common deal-breakers that you may encounter when buying software:
- Cost: Proposed cost is out of budget set forth by finance, or, the cost is above the expected perceived value.
- Timing: The salesperson needs a deal signed by a certain date, which is not possible for your team.
- Terms: Misalignment on term length (single year, multi-year); legal clauses (ie: indemnity, etc.); or security (ie: product does not meet security requirements).
Once your deal-breakers are cleared, the level of stress will be reduced between both parties. Now, you can focus on "the easy stuff", which are the less critical remaining needs and requirements.
Step 5: Treat the salesperson like a customer
Never underestimate the value of relationships when buying and renewing software. People prefer to do business with people they know and trust. In fact, people are 6 times more likely to do business with someone they like. Every buying process is a great opportunity to learn about a new company, bridge a relationship with the salesperson, and find ways that you can accomplish their goals.
In return, they will be more receptive to helping you accomplish your goals. Once you both successfully achieve your outcomes, you'll have built a strong foundation to work together in the future.
Ok, so now what?
In order to reach successful outcomes, we must rethink the relationship between buyers and sellers. Salespeople need to change their mindset about avoiding procurement, and procurement can make significant steps to pre-empt issues by building relationships, understanding the goals of the salesperson, and finding creative ways to problem solve, together.
Overall, the best buyers are those who are empathetic, direct, and helpful to the salesperson. Owning this mentality will pay dividends every time you purchase software.
By the way... Vendr helps companies like DraftKings, HubSpot, Gainsight, & InVision buy and renew software, better.