If you want to differentiate yourself from the competition as a salesperson, what do you do? How do you make your product or service stand out? Tom Williams argues that you need to start by understanding where you fit in the process. How is your procurement counterpart looking at the sale? Take a look at the Kraljic matrix.
The Kraljic matrix
The Kraljic Matrix is a four-quadrant matrix that plots financial results versus supply risk. It’s a way to segment spend from procurement’s perspective. Procurement people segment spend based on profit impact and supply risk. It determines where you sit in the mind of procurement people sourcing that product.
Are you a non-critical item (i.e., low supply risk and low profit-impact)? Are you a strategic item (high supply risk and high profit-impact)? Are you a leverage item (low supply risk and high profit-impact)? Or are you a bottleneck item, which is high supply risk and low profit-impact? It’s a simple matrix that you must understand. It helps you determine how procurement people think about you as a salesperson. It also tells you the strategy that procurement will use against you in a dialogue.
Where a salesperson fits in the process
You need to look at the matrix and determine where procurement has put themselves. What questions are procurement asking you? What language are they using?
Secondly, you have to understand what their metrics are. How are they being judged as an individual and a department? How can you provide value to them that’s measurable and can drive the results they’re looking for?
It’s about looking at procurement as a colleague trying to do a job that’s counter to what you do as salespeople. Salespeople think that they don’t get it, and procurement thinks that salespeople aren’t listening. You have to be open-minded and have a conversation to meet in the middle.
The discovery process is continual
It’s about understanding the company’s challenges—but also understanding the people you’re negotiating with. So what questions should you ask?
In a typical sales process, most people talk about discovery as a stage that you go through. But you should never stop the discovery process. It should continue through buying, implementation, reordering, renewal, etc.
You should always ask questions about their current state, future desired state, the cost of an action, and the root cause of the problem.
- What is the organizational priority? Sometimes a problem isn’t important enough.
- Who else is involved? Who does this decision impact? Those people need to be involved.
- Have you ever bought this before? Would it help you if you outlined a buying process?
Tom uses a mutual action plan. If someone has never bought the product or the service you’re selling, you collaborate to create a plan to make an effective decision—whether they buy your product or not. When you present a mutual action plan to show them what to look for and how to look for it, you position yourself as a trusted advisor.
Differentiate yourself from the pack
Tom always asks sales reps, “Were you memorable? Or forgettable?” Answering that question can provide immense insight. A procurement person may see 10, 12, 15, 20+ salespeople in a day. Will that person remember you?
One of the easiest ways to differentiate yourself as a salesperson is by learning to present well. As a procurement person, I saw upward of 500–1,000 salespeople per year. I saw around 150–250 proposals a year. I can count on one hand the number of people and proposals that stood out. It’s shocking. So how do you differentiate yourself?
Differentiate yourself by practicing your interpersonal and conversational skills. Practice your presentation skills. It’s the lowest hanging fruit available, yet it will immediately set you apart. Practice is one of the things sales professionals need to spend more time on. You need to get feedback from your colleagues. You can learn your idiosyncrasies that may be harming the process. Practice is so fundamental—arguably the mother of all skill—yet so neglected.
How else can you stand out in the sales process? By understanding the mind of the procurement person you’re selling to. Learn more about that process in episode #209 of the Negotiations Ninja podcast!