May 12, 2025 • 45 mins
"Inside the Buyers' Minds | Revenue Mastery Series Part 1 – Inspire Your Buyers Podcast
Welcome to Part 1 of our special Revenue Mastery Series, “Inside the Buyers' Minds”! Join host Bruce Scheer and expert guests Dean Edwards (seasoned procurement executive), Todd Snelgrove (value-based selling authority), and David Svigel (value tools expert) as we dig deep into what really happens on the buying side-especially in times of economic uncertainty.
In this episode, you'll discover:
- What procurement teams are dealing with behind the scenes, and how that impacts your sales strategy
- Why most sellers fail to stand out-and the one move that can make you a true partner to buyers
- The massive opportunity for salespeople who proactively help build a clear, defensible business case
- How to move beyond price-cutting and instead become indispensable to procurement and executive decision makers
- Actionable ways to reframe your value proposition and sell more effectively in today’s challenging economy
If you’re a B2B seller or revenue leader aiming to win deals with high-consideration solutions, you’ll want to hear Dean’s candid insights on procurement’s “tug of war,” risk aversion, and the hidden dynamics that influence how and why decisions get made. You’ll walk away with practical tips to engage Procurement as an ally, create measurable outcomes, and ensure you’re one of the top 10% who actually shapes the business case-and wins the deal.
Subscribe, like, and leave a review to help others find and benefit from our show. For more resources and to access bonus materials, check out ValuePros.io.
Let us know your biggest takeaway in the comments!
#B2BSales #Procurement #ValueSelling #InspireYourBuy
00:00 ""Adapting to Economic Cycles Webinar""
07:07 Extended Buying Cycles in IT Procurement
10:00 Procurement Challenges in Economic Uncertainty
11:03 ""Procurement Drives Cost Savings""
17:35 Maximizing Return from Business Initiatives
19:09 ""Strategic Innovation as Safety""
23:11 ""Building Effective Procurement Cases""
25:57 CFO Approval Needed for Large Deals
30:03 Budget Strategy: Value Retention Key
33:48 Vendor Relationship Success Story
35:40 Concentrating Suppliers for Economic Advantage
40:33 Insufficient Supplier Management Resources
43:30 Optimizing Vendor-Buyer Partnerships"
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:01):
Welcome to the ValuePro Show, where value pros get value
ready.
Hi. My name is Bruce Shearer, the host of the ValuePro Show. What you're about
to hear is part one of our revenue mastery webinar series,
a special three part event for b to b revenue and value leaders
navigating today's uncertain economy. In this session
(00:24):
titled inside the buyer's mind, I'm joined by Dean Edwards,
a seasoned procurement executive who's managed billions in global
spend for companies like Levi Strauss, Kaiser, and Yahoo.
Dean now helps sales teams better engage with procurement and become the
kind of partner buyers can champion internally. I'm
also joined by Todd Snelgrove, a recognized authority on
(00:47):
value based selling and pricing, and the former global head of value
at SKF. And also with us is my cofounder
and friend at valuepros.io, David Spiegel, who
brings deep experience building value tools that help sellers
articulate and deliver measurable outcomes. In
this session, we unpack how procurement teams think,
(01:09):
especially
Thank you, everyone, for, making it to this webinar series. Thank you everyone for,
making it to this webinar series with us. We're super
excited. You're you're looking at, four guys that have put a lot of time and
(01:31):
energy into thinking through this. So we've all witnessed,
and we were just talking about the this morning how we've moved into, you
know, uncertain economic times. And all of us
here have been through multiple downturns. Myself, I've been
through four, including the Asian crisis. And
each time, you know, you have this economic contraction,
(01:53):
things happen, and we need to be aware of it. And based on our
collective experience, you know, we we know we're into that type of
cycle yet again. And how do you respond? How do you take advantage
of that and or or just play the best game you can based on the
chips you've been dealt or the cards you've been dealt, to use that
analogy. So, what we did is we designed this
(02:15):
webinar theory series. It's a three part series to
focus on well, because of this economic uncertainty,
what's happening on the buying side, especially if you have a high
consideration b to b solution. What's happening on the buy
side? And, we need to understand the dynamics that are
occurring there. And that's where Dean Edwards, one of our
(02:37):
speakers for today, he'll be talking about that as a former
procurement leader, of multiple, you know, big brands.
He's got the experience to talk about what what does
happen, what are those internal dynamics that we can expect, if
we're trying to sell into firms like this with a high consideration b two b
solution. The second part of our series is being led by
(02:59):
Todd, former, global head of value for SKF,
and, we'll be talking about how do we
respond by helping our buyers buy with a with a business
case. So how do we set that up, get buy in towards that, and make
sure we deliver on that promise when we're partnering with our
our our buyers? So, that's part two of
(03:21):
this webinar series. Then the third part, that's in June.
That's where the three of us will come back. I'll be introducing some
proprietary research that ValuePros.io has
commissioned to look at how do we influence the
buying experience. And I saw a study last year,
59% of the influence on a bold buying decision,
(03:42):
a high consideration solution buying decision.
59% of the of that consideration comes from the
buying experience, not from the offering. So, you
know, how can we as revenue leaders and revenue
teams influence that buying experience, especially in
these times of, you know, uncertain economic, you know,
(04:04):
situations here that we're all facing? So that'll be a round
out our series, our that three part series. So the procurement perspective
is one of the things we'll get into today, the business case perspective, and
then the experience perspective in June. So if you registered
and then, yeah, I think everybody here has, say, thanks for doing that, and you'll
be invited to the other two parts of this webinar series. If you make it
(04:26):
or not, we'll get the recordings out to you. We do have bonus materials for
everybody who registered as well. So we'll send that out as a a
thank you and follow-up, post the webinar. So,
let's do a quick, introduction, though, around. I'm I'm Bruce here. I'm
one of the cofounders of ValuePros. And, you know, ValuePros, we
exist to help revenue teams, you know, create buyers
(04:48):
that love them. We really wanna focus on helping revenue
teams both communicate and quantify value that they're delivering
on behalf of their customers. So that's Value Pros. We do that through
content, tools, and enablement to help revenue teams.
Dean, over to you. Hi. I'm Dean Edwards. I've
worked in many procurement organizations, as Bruce said, mainly Fortune
(05:10):
500 organizations, and managed up to $6,000,000,000
worth of spend for companies like Levi's, Kaiser Permanente,
Yahoo, Ingram Micro. So I've seen the good, and I've seen
the bad. And I'm gonna share with you some of those experiences today.
And then Todd? Todd Snelgrove, experts in
value and sales, marketing, pricing based on
(05:34):
value quantification. And one thing I learned is that procurement can
be our ally if we equip them the right way. That's a key learning over
the years. Absolutely. And David?
Yeah. Sure. So I'm, David Sprinkle, a partner at Value
Pros, and I bring over twenty years of experience. Bruce mentioned
kind of the the tools piece of Value Pros in identifying
(05:56):
value drivers for, our clients and configuring
intuitive intuitive value selling tools.
Thank you, David. Awesome. Well, Dean, I'll kick it over to you.
Let's let's get into what's happening on the buying side, the buyer's
minds, those buying dynamics. Yeah. I'm just going through a
few machinations on my screen here. So if everybody can bear with
(06:18):
me. Yeah. And, hopefully, that's coming through for
everybody. Is it Bruce? It's looking great. Yep. It's looking good. That's what I
like to hear. Okay. So we're getting inside the the buyer's
mindset. It's about seeing today the the business environment
through procurement size, in particular during times of revenue
and supply challenges. And I really want to emphasize, if you
(06:41):
don't understand and relate to procurement's pressure points,
your value just isn't going to land with them. It's
absolutely critical that you understand what's going on. So
the economic uncertainty, we've got paralyzed decision
making. There was a a study by Deloitte
in 2024 where 74% of CPOs
(07:04):
stated that the pressure to avoid mistakes is increasing.
And you've got more players coming into the mix as the focus
comes down on supply and cost issues. That just
leads to an extension of the buying cycle. Right now, it's
about eleven and a half months as a complete buying cycle.
And that really underscores the fact that delays are coming into
(07:26):
the system. And in fact, mission critical spending,
there was a study that said that 71% of IT
procurement organizations are only engaging in
mission critical spending. Any discretionary spend
is getting shelved, and that's got huge implications for people looking
to sell into new accounts. I wanna start
(07:48):
by stating this two broad approaches to value
realization. One is value capture. That's the
traditional way that people view view procurement. The
other is value creation, and that's become more
of a a a drive as procurement has matured as an
organization over the past years. But as you enter
(08:10):
into periods of economic uncertainty, there's lots of
pressure coming down on procurement to move back down into the
value capture quadrants. And they it's the all the old things that
you've seen before, the competitive bidding, the e
auctions, the demands for free services,
cash control, and I know Todd can talk extensively about the folly
(08:33):
of cash control. And that's taken away from
the real value, creation that can help
propel a company forward and make it successful.
So huge focus on value
capture coming from outside of procurement. And this,
chart here captures some of those dynamics for you. There's
(08:56):
a lot of pressures coming in. There's the budget cuts, stakeholder
demand, supply continuity, and that actually
plays into the procurement, buyers mindset.
They're asking, can they make their targets? There's huge demands being put upon
them in an inflationary economy. So it's not only a
case of controlling costs going up, they've been expected to
(09:18):
drive costs down as the companies themselves face revenue
challenges. They're looking to how do they defend their purchasing
decisions. What will finance response be? Will
they accept it? Will they, challenge them aggressively?
And what's their reputational risk as a consequence if something goes
wrong, if finance don't agree with them? And how do they tell
(09:41):
stakeholders no? They can't do things. They can't afford
a purchase. That's that's a huge issue for them. That
results in the ideas that are most likely to make it being those that are
low risk, fully justifiable, easy
to explain, and this is where sales can really, really help.
And from suppliers, the ideas from suppliers that
(10:03):
really install confidence into them. So in terms of
procurement's pressure points, there's a real internal tug of war. They're expected
to reduce cost, insure supply, meet ESG targets, and
not miss a beat. In a normal economy, about 40%
of procurement's goals are tied to cost savings initiatives
in my experience. The others make up the the
(10:26):
balance of the 60%. That balance shifts during times of
economic uncertainty, and a greater focus is put on cost
savings. But there's a quid pro quo. If they're after cost
reductions, how do you maintain supplier innovation? How do you set the company apart,
make it competitive? If there's ESG mandates, does that slow
down turnaround times? If there's a drive for compliance, does
(10:48):
that reduce the time to actually make a decision? And if you're driving
for supplier, continuity, does that prevent you moving to lower
cost suppliers? And if sales doesn't help lighten this
load, you're actually becoming part of the problem for us.
So we really need sales to come in, and help us be
effective. The cost control toolkit, you know all of
(11:10):
these things. They should be familiar fast, and
believe in me, procurement knows really well how to excel execute
these things. You'll see big, big
drives for cost savings, and this translates into more frequent
bidding cycles. Particularly with digitization,
procurement is accelerating the frequency with which it
(11:33):
competitively bids requirements, all within,
a framework of how does it actually reduce costs year on
year on year. Sometimes, multiple times in a year if they see
the opportunity because they're being driven by finance and the
business and the budget holders to actually free up cash so
that they can effectively run the business.
(11:56):
So as a salesperson, you need to bring a better playbook.
Otherwise, procurement will be playing you with this one.
And if I can't emphasize one thing enough, it's that
you need to be proactive. You need to start now.
You need to positively engage with procurement and show
them how you can be effective in delivering value, giving them
(12:19):
insights, teaching them something. And they need to be
practical solutions. They need to be executable. So you need to align
with procurement's pressure points. We talk about insights and values, practical
solutions. You need data backed flexibility.
It's not enough to say we can be flexible. We can help
you meet your demands. We can come up with
(12:42):
another process. We can come up with another framework for the contract.
You gotta provide data to help them justify this.
Then it's about, control tools, and transparency,
and give them internal credibility. Don't play
games with procurement because they can spot it really, really quickly.
(13:03):
Or if you do get away with it for a time, you don't wanna be
in a position where procurement's trying to play catch up because they feel
slighted that you haven't been open and honest with them.
Yours your reputation is absolutely key to them
having confidence in you. Stales,
needs to act as a stabilizer, the voice of clarity in in the
(13:26):
chaos. And that's about humanizing procurement
because they feel exposed, unsure, and
under scrutiny, and you need to actually bring clarity, not
noise, simplicity, not spin, and be the person they
can trust to make the complexity manageable.
Absolutely key for them. Now budgets
(13:49):
have been constrained. Budgets have been cut. Spend has been delayed.
And as a salesperson, you need to challenge the myth that there's
no budget. There's the opportunity
to redirect the existing budget,
and that's redirection of funds. How do you take existing funds
(14:10):
and put them to higher, better use that delivers more value
to the organization? Quantify the the
cost of delays of decisions. Many
companies take very, very short term perspectives. They're looking
to address the quarter. The next results are being published,
And instead, sacrifice the long term health of the
(14:33):
organization. So that's why it's imperative that you demonstrate
the expense of inaction. Provide them with
ROI models, and, Todd is expert at this.
Show them how they can justify the sales decision, the
spend, and give them the tools, models, and
(14:53):
communications to be able to convey that into the organization
with credibility. And then
solution as a strategic enabler for the business. Not
enough people do that. It's about, oh, okay. It's procurement. We're gonna sell a
product or service. I can't tell you how many
salespeople will come in and see a procurement person
(15:16):
and start installing the virtues of their product, why
it's the the best thing, and why they should buy it instead of trying to
solve for what the problem is. And I know that's motherhood and
apple pie to to sales organizations. You go in,
you identify the customer's problem, you understand it and
show how your solution matches up against it.
(15:38):
Somehow, when salespeople get in front of procurement, most of
them forget that learning, and forget
that the procurement organization has problems that is is looking to
solve as well and to help them with that. So in
order to be successful, you need to reframe your value proposition.
You need to expand from a cost focus to
(16:01):
an outcome focus. So look at the total cost of ownership, which is
the full cost view over time. You'll see
some procurement organizations look at it from a price
times volume equation. They're typically what I refer to as purchasing
organizations. As you move up the chain from
purchasing to strategic sourcing to category management,
(16:23):
value becomes more important as part of the equation for
them. So very important you look at total cost of own ownership, look
at the outcomes, Look at the outcomes in terms of linking
them to results that procurement can point to,
and then demonstrate your value. Show it's a good deal
even at a premium cost because of the value that's being delivered. Don't
(16:45):
be afraid to make that case because as much as
procurement is hitting on you to reduce the cost as much
as possible, they're also sensitive to, is this
gonna cost more in the short, medium, long term,
and how's that gonna reflect on me at the end of the day?
So we talked about anchoring every cost to an outcome. You
(17:08):
need to demonstrate measurable ROI. It's gotta be
concrete. You've gotta remove any ambiguity.
You've gotta show them how they can implement effectively.
And this is one of the things I find sales teams
tend to overlook in their dialogues with procurement. They come in with
(17:28):
a solution. They they believe passionately and can
demonstrate that it's better than the alternative. They miss
out on what is the implications for implementation, what are
the change costs, how they handle those, And you need to be very
proactive in engaging with procurement to address that.
And then speed of value. Show that they don't have to wait twelve months for
(17:51):
the value to be delivered. It's really important to
understand what the internal rate of return is that
finance measures projects by and show that you can at
least beat that. I I know in organizations that I've been
in, if there's been a proposal for a
new spend or an increased spend, it's always man
(18:13):
measured against the yardstick of, can we re get the,
return on investment within the current business year? Not even
twelve months within the current business year. Does it have a
positive rate of return? So be very mindful
of that. That's that's a mindset they have. One of the
approaches to, expanding business
(18:35):
is to come in with a right size solution. So
the trick here is to start small. Derisk the
decision. Make it very palatable for the organization
addressing just the immediate needs they have. And then
design for modularity. Make it easy to grow.
There's components they can bolt on as they need them. And then
(18:58):
plan for the scale. Develop a long term vision with
procurement and the customer for how this will roll out once the
economic tide turns positive again.
Innovation. One of the things that happens during times
of economic insert uncertainty is innovation
becomes deprioritized against risk,
(19:21):
and it's it's back to being the safe option. So you
need to unlock this resistance, and you need to
show that by actually adopting the innovative approach,
you're giving them a safe solution. It's safer than the status
quo. It's gonna meet their needs. So it has to
be positioned as giving them lower exposure than the
(19:43):
existing solutions they have, or there's gonna be a natural
resistance to sticking their neck out. And back to that statistic of
over seventy percent of chief procurement officers
reporting that, the the need to avoid
mistakes is actually increasing in their organizations.
(20:03):
ESG, make it a strategic differentiator. Just because
the priority is on cost doesn't mean that
organizations don't still have their commitments to their ESG
goals. And I know certain organizations are revising those, but
there's plenty out there that still have public statements around
ESG. And you need to leave with leave with proof.
(20:25):
Avoid greenwashing. It stands out really quickly, and
it kills your credibility. You have to show evidence.
You need to highlight compliance and how you do your reporting is
gonna make their job easier. And then really, really
important, it helps in the cost argument demonstrate
how, value is delivered through the ESG
(20:48):
programs, whether that's cost saving or risk reduction.
And then emphasize the reputational gains that it will make
them look good internally and externally if they go with your solution
because it fits with their ESG goals. Let's get
to working with procurement. You need to win,
by working with them proactively. Waiting doesn't help you at
(21:11):
all. You need to be proactive. You need to be
outcome orientated. You need to collaborate effectively with them.
And collaboration is not a soft term. It's
a strategic push. And Todd's
mentioned on many occasions, you can achieve an awful lot by
working with procurement. And they're under
(21:33):
pressure to save cost, to deliver
the supplies, to be effective and not make mistakes.
At the same time, they're dealing with this inflationary
economy, the supply constraints and everything else. Your ability to come in
and help them, support them is real value for the
procurement team and will lead them to champion you.
(21:56):
We talked about outcome focused. It's gotta be there. It's critical.
And offering flexibility. What are the different approaches you can
take? How can you structure the contracts differently? How do
you structure your payment in terms of milestones and
delivery? How do you, change
the the the processes that you're adopting to make it more
(22:19):
effective for procurement, and less costly for them to transact
with you? Absolutely critical. And then lastly,
give them the internal tools. If there's one thing that
drives me nuts, it's let
me describe the situation for you. Procurement people tend
to shift from categories of expended expenditure as their,
(22:43):
as their careers progress. And they have to learn a new
category as they move into that area, and there's a
learning curve. And loads of people trying to
influence them, loads of history in their in their own
company as to about how things should be done. There are very,
very few companies, suppliers out there
(23:05):
that provide buyer guides to help the procurement
folks navigate through that process. And to be effective, a
buyer guide has to be neutral,
unbiased, and factual. And,
honestly, the the suppliers that get the best credibility are the ones that
point out the areas where they're not proficient as well as the
(23:27):
ones where they are and why they're still a good choice. But
that honesty really resonates with procurement.
And that leads us on to the necessity of building
a business case that's robust. It's not enough to have
the value. You've got to help procurement sell it internally
because procurement are going into a closed door meeting with
(23:50):
finance and the stakeholders, making recommendations
on behalf of cross functional teams. And
they need to have a comprehensive effective
value business case to present to finance, and you
need to be confident they can represent you effectively
even though you're not in the room. And that's really the preview to the
(24:12):
next episode because Todd's gonna walk you through how to make
those business cases that get green lit.
And I invite you to reflect what internal tools are you
currently providing today to help your procurement,
counterparts be successful in championing you as a
solution. That's the main body. This is me
(24:35):
and my contact details. I am now working
with sales teams, trying to help them understand the procurement perspective,
how to actually engage effectively with procurement teams,
the different type of procurement teams, the different kind of procurement personas.
So welcome any dialogue there. That being
said, Bruce, I think we're open to any, questions people may
(24:59):
have. Awesome. Okay. Yeah. I I had a curiosity,
Dean. Just based on your experience, what percent of,
sellers show up and help shape that business case when once it gets
to procurement? 10% or less.
10% or less. Seriously. Most do the bid,
drop it with procurement, have an indication that they got
(25:23):
the business, maybe get into contractual negotiations, which is a whole
other night nightmare and can be easily fixed. But they
don't help build the business case to sell the proposition
in. A lot of the time, that's procurement's fault. They don't engage
the sales team to to come on board. But they again, sales
needs to be proactive in offering that to the procurement organization.
(25:46):
Well and, Dean, another question. What percent of deals,
for procurement to approve require a business case
even before this period of economic uncertainty?
It's driven by size, but, generally, anything over about
500,000 will require a business case.
Mhmm. And, typically, a million
(26:09):
dollars and up are landing on the CFO's table, and
procurement's expected to actually signal whether they approve or not. So
there's organizations I've worked for where the CFO would
not approve a deal unless I personally endorsed it. If it was
coming across his desk, I had to give the green light to it.
So the lesson there is sales teams that think it's
(26:32):
really cool to try and work, around procurement,
they they are gonna find it's a very tough road. I would tell
you in about 90% of the cases with the
CFOs where I've had to give approval, if I haven't had my
approval, the the the, project doesn't go ahead.
(26:54):
Yeah. Yeah. Absolutely. I think I you had mentioned to me that
if you if you say no, there's a 10% chance that might move
forward, 90% chance that it says dead on the vine right at that
point. And, so so interesting that one out of
10 sellers actually helped shape the business case that that
carries that internal dialogue. That's pre this period of,
(27:16):
economic uncertainty. I'm hoping some of the sharper
sellers might realize, gosh. Dang. You know? And you said
before that, you know, even before this period, such a high
percentage of deals require a business case, especially
over a certain number, internally, whatever that that rate
might be. But only one out of 10 sellers is doing that.
(27:38):
So there's a huge, huge gap there
in There's a helping buyers buy. Even
at the 10%, Bruce, not all of those are demonstrating
the value. They're they're just
helping with the the cost times the volume, maybe
TCO, total cost of ownership, as a criteria. But
(28:01):
what they're not doing is demonstrating the full bird value proposition to
the organization. Yep. Yep. Yeah. It's
so anyways, huge gaping opportunity
even before this period. Now that we're in times of economic
uncertainty, and then Dean just laid out, you know, what is that
response, especially with the cost oriented orient, focus.
(28:25):
How can sellers show up and do a better job of that? And, Todd, I
know you're gonna just really lay heavy into that in in our next,
webinar series. And, again, if I yeah. For everybody out here
listening, if you've, if if you need to get that job
done, no better guy to bring to that that knife fight than Todd,
I I must say. But, Todd, I'm sure you've got
(28:47):
questions too. You've been thinking about David as well if you've got any questions to
kinda fire at Dean. And and we've all got different industry experience,
but when Dean said 10% show up with a business case, my
experience is 90% of those I could drive a truck through. They're so
bad. And I've got a list because Sharon, so
I need to say what not to do. But that just because it's a business
(29:09):
case doesn't mean it's a believable one. It's accurate, and the
customer feels confident taking it up there. I've seen one I won't get into it.
Spelling mistakes and the likes. That's one comment. And then
this is going back a while ago, Bruce, but my colleagues would say,
the customer never asked for a business case.
Okay? Terminology is different in every company. Do they ask for justification?
(29:32):
Is there a budget threshold? I mean, ask the question in
different ways. Would it help you get the approval for this if I brought you
a business name or something? Because they might not come to you.
The bid didn't say we needed this, so why should I do it? And I'm
like, go in your own company and ask for a million dollars and not have
to write a business case. I wanna come work for you because odds are
(29:53):
your boss is gonna ask you why. And if you come in and say,
because I like the guy and he's fun, probably not a good enough answer to
get a million dollars. You bet. Yeah. The,
a thing I'd add on to that, though, is a lot
of times when the budget's been formulated, the the stakeholder
will talk with a given supplier to
(30:16):
try and build the budget up. Mhmm. And that becomes de
facto the business case that they run run with throughout the whole
project. And even if that supplier isn't successful,
nobody's practically going back or very few people are practically
going back to to the winner of the process to say, help me
justify this and show me where the value's coming from. And
(30:39):
that there's a interesting corporate executive board
statistic which showed that deals, that
weren't tended to or managed effectively lost
75 percent of their value over two years.
Whereas those where people actually try to realize the value,
work it, and drive the whole process forward,
(31:02):
saw a 25% increase in value over the original
value proposition. Hoping the customer get the the
value. The success is more than just, here's the business case. Thanks for
the order. See you around because, Yeah. You better
you better fortunately when you come back the next Yeah. I and this is an
area where both procurement and sales have to do a lot better
(31:25):
because they're always chasing the next opportunity, the next project,
and they need to spend more time on the ones that they've actually delivered
to realize that value because from the
sales perspective, that can lead to a lot more sales.
Mhmm. For sure. Hey, Dean. We do have a
question, Sebastian. Thanks for asking it in the chat. But,
(31:48):
Sebastian or I'll I'll read your question. Dean, you mentioned that there
is risk aversion when there is economic
uncertainty. How do procurement teams weigh up
the pain of change, cost, and their associated
risks when making decisions? Okay. Thanks for that,
Seb. Basically, what we're looking at
(32:09):
is what is the actual cost to affect the change? What is the time?
Costing also includes the internal resources, the amount of
focus it will take away from, other opportunities.
How could we have used those resources elsewhere?
And then what is the likelihood of the project actually failing
(32:31):
or not delivering against the the benefits that
it's supposed to realize for us as an organization.
And Hillman will certainly spend a lot of time trying
to appraise that, and we'll do so with a very skeptical
eye. They're they're looking to disprove things as part of,
the acid test for the supplier. Will it actually deliver what
(32:54):
we expect it to deliver? I love
it. Yeah. And we'll speak, towards our our third part of this webinar
series. But around the buying experience, it doesn't end
with signing the contract. It's delivering that value. And especially
in times of economic uncertainty, you wanna grow that value
within your existing client base. Make sure they're getting the value.
(33:16):
Yeah. Yeah. Yeah. So and and then you miss miss that memo. Yeah. One
of the things sales teams tend to miss is procurement
is really plugged into the organization and knows what's going
on. Mhmm. And if you've been successful with them, if
you've helped them achieve their goals, if you understand them and
align with them, they're much more inclined to identify
(33:39):
opportunities that you haven't realized in their
organization to increase the value to you as an
organization. Yeah. Dean, I'd mentioned to you in one of
our previous calls that, you know, I had and David had the honor
of being, you know, on a a vendor of record for
Alcatel Lucent. But because of our,
(34:02):
our winning streak and value streak for them and also working
with procurement on that, making sure our deals get got approved
and into play for the organization, that one of the heads of
procurement became a a, you know, a friend. And and
if something was moving in the account that we weren't involved with, chances
are we'd get involved invited to it. You know? So it was a it was
(34:24):
a blind spot for us, but procurement very often would help
us be invited to the table because they knew there was initiative.
And and that buyer, for that initiative, wasn't considering all the
best players, and, hence, we'd get invited to the table. So
here here's an interesting stat that sales really, really
needs to absorb. Procurement is typically
(34:46):
67% of the way through the process before they contact
suppliers. So it it's
imperative that you have a proactive relationship with
them that's actively managed so that you get
insight as to what's going on earlier in the process.
Because by then, we've researched the suppliers, we've understood
(35:09):
the market, we framed our specifications, and you've
missed all these opportunities to help shape the bid
documents, the selection criteria, and the outcome.
Dean, I have a I have a question for you. I'm hearing from some of
my clients that customers are looking to consolidate the
number of suppliers. Yep. And and and they're wondering,
(35:31):
like, you know, how do I get to be that supplier? What's driving my
customer's behavior towards that consolidation? Do you have any
insight into what's going on there? Totally. So
this is a lot about managing tailspin,
concentrating power into a select number of suppliers
in exchange for economic advantage. So,
(35:53):
if you take a typical benchmark of a couple
of years ago, it was,
benchmark was about 5,000 suppliers per billion dollars
worth of spend, best in class or somewhere between two and a half and
3,000 vendors. It's not uncommon to come
across organizations per billion dollars of spend with
(36:15):
25,000 supplies. So that's
one of the drivers. Reduce the tail spend, concentrate it in
exchange for better
terms, both for the the customer and increase revenues for
for the supplier. But to do that, you
need to become as much as possible stop shop within that category. What
(36:38):
are the all the services, products, capabilities that
you can bring to that relationship in order to be successful?
It's not just about sacrificing your your pricing
to come in and win the business. It it's much more than that.
And if I can, there's there's a fallacy around e
(36:58):
auctions. If you do get dragged into an e
auction, the assumption is that the lowest
price is gonna win. Any good sourcing
organization, that's just one of the points of reference. They're
looking at the quality. They're looking at insurance and supply, innovation,
all these other criteria, as well as what the price
(37:20):
is in order to come up with the right solution.
So in periods of consolidation of suppliers, it's
very real. Be proactive. Go out there. Show them how you
can pick up more of the business, with
the right terms, the right service, the right quality. And
there's nothing wrong, it might not happen a lot
(37:43):
of the time, but there's nothing wrong in actually asking, the
the buyer for what spend data is. What is out there?
What is the size of the opportunity? Where else are they spending money with
what suppliers that you could actually come in and provide those goods
and services for them? Thank you,
Dean. Hey, everybody. We just got a couple minutes left as part of our scheduled
(38:05):
time together. Any other questions? This has been such a great
dialogue. I'm surprised I haven't reined the
issue of, consultants yet,
Bruce. You wanna talk about that for a little bit? I know that's a hot
one. Probably something people aren't thinking about. As consultancies
are seeing challenges to their other books of business, they are increasing,
(38:29):
their forays into the procurement world. We are seeing compound,
annual growth rates between eight to
14% as they're out there recruiting procurement
folks, building their capabilities. And they're pitching
typically into finance or to the CEO,
promising cost savings and driving those. And I've worked with
(38:51):
some excellent, organizations,
consultancies doing procurement, projects. And I
I've worked with some that are just interested in slashing the cost come what
May because the way the contract is set up is on a
share of savings. And I've always considered that
to be really, really dangerous, because the
(39:13):
propensity to just go for the lowest cost rather than what serves a
long long term interest of the client, can
be very detrimental. So the way to
counter that is, again, get back to the value
argument. Empower procurement. Be proactive.
If they're able to show that they're making the progress, that they're
(39:35):
delivering against the expectations of the organization and you're part of
the solution, you've positioned yourself well. If you find
yourself in the middle of a consultant, program,
the same still holds true. Demonstrate the value,
articulate it, work with procurement, and even with the consultants to
demonstrate that value to them. Sounds good.
(39:59):
Any any last question, Todd or David as well? Any, to
round out? I guess maybe it's more for the sales side, so we'll leave
it for a few weeks. But it's amazing when we all have a CRM system,
whether it's Outlook. How well, maybe it's a better way to put it.
How many salespeople come back in six months and check? I thought
the solution was gonna bring this value to you. Let's find out what it's
(40:20):
realizing and how many say goodbye. I mean, twenty
five years, you have that capability. But today, everybody's got a
even a sticky note. Call back my good customer and see how I
did. Very, very few is the answer,
Todd. I it's an incredibly low percentage,
and I think that's structural to both,
(40:45):
procurement and the sales teams. There is a
focus within procurement of supplier management, supply
development, and how does that go forward. But they're so resource
constrained. There there's few organizations that can do that to the extent
that they want. And the sales team's under, under
the gun to keep delivering more revenue and achieve their
(41:07):
targets, which makes it hard for them to look back. But
as we've said, that's how you can really expand the
the revenue stream with your existing customer, which is a lot easier than going out
and acquiring a new customer for its sake and
really building that value case for them.
And and the suppliers that do that are unfortunately too far,
(41:30):
few and far between for my liking. But it it's a two way street. You
can't say it's the sales team's fault. It's also, the
customer's fault as well. They've they've got to invest the the
resources in fully realizing that value. I can tell you, out of the
companies I worked for,
only one engaged a formal look
(41:52):
back process to make sure that the project's actually
delivered the value and the rate of return that was put into the
initial business case. Yeah. So it's it's
it's Which is crazy. Crazy because more and more businesses are
going to this customer success, or I'll pay you based on value. And
all I heard from some salespeople before was, we're not sure our solution would
(42:14):
deliver the value, so I don't wanna go back and measure it. Yeah. He
got it before they just made up a number and gave it to somebody. It's
like, if it's not realizing the value, it's probably, I hate to determine,
easy fix. We you know, change them for upgrade that or do that.
And the businesses that bought the solution, they got the value. They were usually
easier to meet with than back to procurement saying, hey. Talk to your team.
(42:36):
This is what they said the value were. So what one of the things
that's, really tough is
procurement will come in and demonstrate, okay. This is the value.
These are the cost savings if they're they're looking to drop money down to the
bottom line. What happens is the budget holder
typically takes that money and spends it on something else. And
(42:57):
at the end of the year, finance is turning around to to procurement
and saying, well, where the hell was all this value that you delivered? Because we
can't see it anywhere. Uh-huh. And then, yeah, to go through convoluted
mechanisms to actually capture the cost and and the the cost
savings and drop it to the bottom line, which doesn't do wonders
for procurement's relationship with the internal stakeholders.
(43:21):
But it's rare for me to see other other
departments within your organization take up that bat baton and run
with it. Well, you guys, on on that
note, I know we'll talk more about that. How do we get this sitting right,
especially for the the vendors that wanna win more and more often and keep their
their valuable clients and grow those valuable clients. I know our next
(43:43):
session is just gonna be really rich in that regard. So so we've,
we've hit the procurement perspective. Dean, thank you so much for
helping us understand the internal dynamics, how the buyers' minds
work, what changes in times of economic uncertainty. Todd,
I know you're totally gonna deliver on how, you know, how do we show up
now? How do we partner with the client, with on the buy with the people
(44:06):
on the buyer side, put that energy into, you know, setting
up the business case, measuring for it, getting that time for for
to the first impact scheduled and agreed to and how we're gonna measure it and
proving value so we can grow that value for that account and and grow
our business, our revenue number. So that's gonna be super critical.
And then we'll again, our our third one in June, we'll round out with a
(44:28):
how do we drive an overall value experience that our
buyers are just gonna love and make us the vendor of choice.
So, anyways, on that note, thank you everybody for showing up.
Dean, thanks so much for the energy you put into your presentation.
And, Todd and David, thanks for for your wisdom and and shaping this
whole thing and getting this underway. So I I'll go ahead and end the
(44:50):
session now. We'll send a recording out to everybody and some bonus
materials as well, and then we'll see you on the next one. Thank you so
much. Have a great day. This session gave us a powerful look
at how decisions get made inside complex buying organizations.
We heard about the internal tug of war procurement phases, the
risk aversion that's growing across the board, and the massive
(45:14):
opportunity for sellers who can help build a clear defensible
business case. This is just the first of three sessions in our
revenue mastery series. Next up, the business case advantage
with Todd Snellgrove, where we'll break down exactly how to win
executive buy in without defaulting to price cuts.
If you enjoyed this episode, please like and subscribe value pro
(45:36):
show. And if you're feeling kind, leave a review so others can find
and enjoy it too. Thanks for watching. Wishing you success.
Welcome to the ValuePro Show, where value pros get value
ready.
Hi. My name is Bruce Shearer, the host of the ValuePro Show. What you're about
to hear is part one of our revenue mastery webinar series,
a special three part event for b to b revenue and value leaders
navigating today's uncertain economy. In this session
(00:24):
titled inside the buyer's mind, I'm joined by Dean Edwards,
a seasoned procurement executive who's managed billions in global
spend for companies like Levi Strauss, Kaiser, and Yahoo.
Dean now helps sales teams better engage with procurement and become the
kind of partner buyers can champion internally. I'm
also joined by Todd Snelgrove, a recognized authority on
(00:47):
value based selling and pricing, and the former global head of value
at SKF. And also with us is my cofounder
and friend at valuepros.io, David Spiegel, who
brings deep experience building value tools that help sellers
articulate and deliver measurable outcomes. In
this session, we unpack how procurement teams think,
(01:09):
especially
Thank you, everyone, for, making it to this webinar series. Thank you everyone for,
making it to this webinar series with us. We're super
excited. You're you're looking at, four guys that have put a lot of time and
(01:31):
energy into thinking through this. So we've all witnessed,
and we were just talking about the this morning how we've moved into, you
know, uncertain economic times. And all of us
here have been through multiple downturns. Myself, I've been
through four, including the Asian crisis. And
each time, you know, you have this economic contraction,
(01:53):
things happen, and we need to be aware of it. And based on our
collective experience, you know, we we know we're into that type of
cycle yet again. And how do you respond? How do you take advantage
of that and or or just play the best game you can based on the
chips you've been dealt or the cards you've been dealt, to use that
analogy. So, what we did is we designed this
(02:15):
webinar theory series. It's a three part series to
focus on well, because of this economic uncertainty,
what's happening on the buying side, especially if you have a high
consideration b to b solution. What's happening on the buy
side? And, we need to understand the dynamics that are
occurring there. And that's where Dean Edwards, one of our
(02:37):
speakers for today, he'll be talking about that as a former
procurement leader, of multiple, you know, big brands.
He's got the experience to talk about what what does
happen, what are those internal dynamics that we can expect, if
we're trying to sell into firms like this with a high consideration b two b
solution. The second part of our series is being led by
(02:59):
Todd, former, global head of value for SKF,
and, we'll be talking about how do we
respond by helping our buyers buy with a with a business
case. So how do we set that up, get buy in towards that, and make
sure we deliver on that promise when we're partnering with our
our our buyers? So, that's part two of
(03:21):
this webinar series. Then the third part, that's in June.
That's where the three of us will come back. I'll be introducing some
proprietary research that ValuePros.io has
commissioned to look at how do we influence the
buying experience. And I saw a study last year,
59% of the influence on a bold buying decision,
(03:42):
a high consideration solution buying decision.
59% of the of that consideration comes from the
buying experience, not from the offering. So, you
know, how can we as revenue leaders and revenue
teams influence that buying experience, especially in
these times of, you know, uncertain economic, you know,
(04:04):
situations here that we're all facing? So that'll be a round
out our series, our that three part series. So the procurement perspective
is one of the things we'll get into today, the business case perspective, and
then the experience perspective in June. So if you registered
and then, yeah, I think everybody here has, say, thanks for doing that, and you'll
be invited to the other two parts of this webinar series. If you make it
(04:26):
or not, we'll get the recordings out to you. We do have bonus materials for
everybody who registered as well. So we'll send that out as a a
thank you and follow-up, post the webinar. So,
let's do a quick, introduction, though, around. I'm I'm Bruce here. I'm
one of the cofounders of ValuePros. And, you know, ValuePros, we
exist to help revenue teams, you know, create buyers
(04:48):
that love them. We really wanna focus on helping revenue
teams both communicate and quantify value that they're delivering
on behalf of their customers. So that's Value Pros. We do that through
content, tools, and enablement to help revenue teams.
Dean, over to you. Hi. I'm Dean Edwards. I've
worked in many procurement organizations, as Bruce said, mainly Fortune
(05:10):
500 organizations, and managed up to $6,000,000,000
worth of spend for companies like Levi's, Kaiser Permanente,
Yahoo, Ingram Micro. So I've seen the good, and I've seen
the bad. And I'm gonna share with you some of those experiences today.
And then Todd? Todd Snelgrove, experts in
value and sales, marketing, pricing based on
(05:34):
value quantification. And one thing I learned is that procurement can
be our ally if we equip them the right way. That's a key learning over
the years. Absolutely. And David?
Yeah. Sure. So I'm, David Sprinkle, a partner at Value
Pros, and I bring over twenty years of experience. Bruce mentioned
kind of the the tools piece of Value Pros in identifying
(05:56):
value drivers for, our clients and configuring
intuitive intuitive value selling tools.
Thank you, David. Awesome. Well, Dean, I'll kick it over to you.
Let's let's get into what's happening on the buying side, the buyer's
minds, those buying dynamics. Yeah. I'm just going through a
few machinations on my screen here. So if everybody can bear with
(06:18):
me. Yeah. And, hopefully, that's coming through for
everybody. Is it Bruce? It's looking great. Yep. It's looking good. That's what I
like to hear. Okay. So we're getting inside the the buyer's
mindset. It's about seeing today the the business environment
through procurement size, in particular during times of revenue
and supply challenges. And I really want to emphasize, if you
(06:41):
don't understand and relate to procurement's pressure points,
your value just isn't going to land with them. It's
absolutely critical that you understand what's going on. So
the economic uncertainty, we've got paralyzed decision
making. There was a a study by Deloitte
in 2024 where 74% of CPOs
(07:04):
stated that the pressure to avoid mistakes is increasing.
And you've got more players coming into the mix as the focus
comes down on supply and cost issues. That just
leads to an extension of the buying cycle. Right now, it's
about eleven and a half months as a complete buying cycle.
And that really underscores the fact that delays are coming into
(07:26):
the system. And in fact, mission critical spending,
there was a study that said that 71% of IT
procurement organizations are only engaging in
mission critical spending. Any discretionary spend
is getting shelved, and that's got huge implications for people looking
to sell into new accounts. I wanna start
(07:48):
by stating this two broad approaches to value
realization. One is value capture. That's the
traditional way that people view view procurement. The
other is value creation, and that's become more
of a a a drive as procurement has matured as an
organization over the past years. But as you enter
(08:10):
into periods of economic uncertainty, there's lots of
pressure coming down on procurement to move back down into the
value capture quadrants. And they it's the all the old things that
you've seen before, the competitive bidding, the e
auctions, the demands for free services,
cash control, and I know Todd can talk extensively about the folly
(08:33):
of cash control. And that's taken away from
the real value, creation that can help
propel a company forward and make it successful.
So huge focus on value
capture coming from outside of procurement. And this,
chart here captures some of those dynamics for you. There's
(08:56):
a lot of pressures coming in. There's the budget cuts, stakeholder
demand, supply continuity, and that actually
plays into the procurement, buyers mindset.
They're asking, can they make their targets? There's huge demands being put upon
them in an inflationary economy. So it's not only a
case of controlling costs going up, they've been expected to
(09:18):
drive costs down as the companies themselves face revenue
challenges. They're looking to how do they defend their purchasing
decisions. What will finance response be? Will
they accept it? Will they, challenge them aggressively?
And what's their reputational risk as a consequence if something goes
wrong, if finance don't agree with them? And how do they tell
(09:41):
stakeholders no? They can't do things. They can't afford
a purchase. That's that's a huge issue for them. That
results in the ideas that are most likely to make it being those that are
low risk, fully justifiable, easy
to explain, and this is where sales can really, really help.
And from suppliers, the ideas from suppliers that
(10:03):
really install confidence into them. So in terms of
procurement's pressure points, there's a real internal tug of war. They're expected
to reduce cost, insure supply, meet ESG targets, and
not miss a beat. In a normal economy, about 40%
of procurement's goals are tied to cost savings initiatives
in my experience. The others make up the the
(10:26):
balance of the 60%. That balance shifts during times of
economic uncertainty, and a greater focus is put on cost
savings. But there's a quid pro quo. If they're after cost
reductions, how do you maintain supplier innovation? How do you set the company apart,
make it competitive? If there's ESG mandates, does that slow
down turnaround times? If there's a drive for compliance, does
(10:48):
that reduce the time to actually make a decision? And if you're driving
for supplier, continuity, does that prevent you moving to lower
cost suppliers? And if sales doesn't help lighten this
load, you're actually becoming part of the problem for us.
So we really need sales to come in, and help us be
effective. The cost control toolkit, you know all of
(11:10):
these things. They should be familiar fast, and
believe in me, procurement knows really well how to excel execute
these things. You'll see big, big
drives for cost savings, and this translates into more frequent
bidding cycles. Particularly with digitization,
procurement is accelerating the frequency with which it
(11:33):
competitively bids requirements, all within,
a framework of how does it actually reduce costs year on
year on year. Sometimes, multiple times in a year if they see
the opportunity because they're being driven by finance and the
business and the budget holders to actually free up cash so
that they can effectively run the business.
(11:56):
So as a salesperson, you need to bring a better playbook.
Otherwise, procurement will be playing you with this one.
And if I can't emphasize one thing enough, it's that
you need to be proactive. You need to start now.
You need to positively engage with procurement and show
them how you can be effective in delivering value, giving them
(12:19):
insights, teaching them something. And they need to be
practical solutions. They need to be executable. So you need to align
with procurement's pressure points. We talk about insights and values, practical
solutions. You need data backed flexibility.
It's not enough to say we can be flexible. We can help
you meet your demands. We can come up with
(12:42):
another process. We can come up with another framework for the contract.
You gotta provide data to help them justify this.
Then it's about, control tools, and transparency,
and give them internal credibility. Don't play
games with procurement because they can spot it really, really quickly.
(13:03):
Or if you do get away with it for a time, you don't wanna be
in a position where procurement's trying to play catch up because they feel
slighted that you haven't been open and honest with them.
Yours your reputation is absolutely key to them
having confidence in you. Stales,
needs to act as a stabilizer, the voice of clarity in in the
(13:26):
chaos. And that's about humanizing procurement
because they feel exposed, unsure, and
under scrutiny, and you need to actually bring clarity, not
noise, simplicity, not spin, and be the person they
can trust to make the complexity manageable.
Absolutely key for them. Now budgets
(13:49):
have been constrained. Budgets have been cut. Spend has been delayed.
And as a salesperson, you need to challenge the myth that there's
no budget. There's the opportunity
to redirect the existing budget,
and that's redirection of funds. How do you take existing funds
(14:10):
and put them to higher, better use that delivers more value
to the organization? Quantify the the
cost of delays of decisions. Many
companies take very, very short term perspectives. They're looking
to address the quarter. The next results are being published,
And instead, sacrifice the long term health of the
(14:33):
organization. So that's why it's imperative that you demonstrate
the expense of inaction. Provide them with
ROI models, and, Todd is expert at this.
Show them how they can justify the sales decision, the
spend, and give them the tools, models, and
(14:53):
communications to be able to convey that into the organization
with credibility. And then
solution as a strategic enabler for the business. Not
enough people do that. It's about, oh, okay. It's procurement. We're gonna sell a
product or service. I can't tell you how many
salespeople will come in and see a procurement person
(15:16):
and start installing the virtues of their product, why
it's the the best thing, and why they should buy it instead of trying to
solve for what the problem is. And I know that's motherhood and
apple pie to to sales organizations. You go in,
you identify the customer's problem, you understand it and
show how your solution matches up against it.
(15:38):
Somehow, when salespeople get in front of procurement, most of
them forget that learning, and forget
that the procurement organization has problems that is is looking to
solve as well and to help them with that. So in
order to be successful, you need to reframe your value proposition.
You need to expand from a cost focus to
(16:01):
an outcome focus. So look at the total cost of ownership, which is
the full cost view over time. You'll see
some procurement organizations look at it from a price
times volume equation. They're typically what I refer to as purchasing
organizations. As you move up the chain from
purchasing to strategic sourcing to category management,
(16:23):
value becomes more important as part of the equation for
them. So very important you look at total cost of own ownership, look
at the outcomes, Look at the outcomes in terms of linking
them to results that procurement can point to,
and then demonstrate your value. Show it's a good deal
even at a premium cost because of the value that's being delivered. Don't
(16:45):
be afraid to make that case because as much as
procurement is hitting on you to reduce the cost as much
as possible, they're also sensitive to, is this
gonna cost more in the short, medium, long term,
and how's that gonna reflect on me at the end of the day?
So we talked about anchoring every cost to an outcome. You
(17:08):
need to demonstrate measurable ROI. It's gotta be
concrete. You've gotta remove any ambiguity.
You've gotta show them how they can implement effectively.
And this is one of the things I find sales teams
tend to overlook in their dialogues with procurement. They come in with
(17:28):
a solution. They they believe passionately and can
demonstrate that it's better than the alternative. They miss
out on what is the implications for implementation, what are
the change costs, how they handle those, And you need to be very
proactive in engaging with procurement to address that.
And then speed of value. Show that they don't have to wait twelve months for
(17:51):
the value to be delivered. It's really important to
understand what the internal rate of return is that
finance measures projects by and show that you can at
least beat that. I I know in organizations that I've been
in, if there's been a proposal for a
new spend or an increased spend, it's always man
(18:13):
measured against the yardstick of, can we re get the,
return on investment within the current business year? Not even
twelve months within the current business year. Does it have a
positive rate of return? So be very mindful
of that. That's that's a mindset they have. One of the
approaches to, expanding business
(18:35):
is to come in with a right size solution. So
the trick here is to start small. Derisk the
decision. Make it very palatable for the organization
addressing just the immediate needs they have. And then
design for modularity. Make it easy to grow.
There's components they can bolt on as they need them. And then
(18:58):
plan for the scale. Develop a long term vision with
procurement and the customer for how this will roll out once the
economic tide turns positive again.
Innovation. One of the things that happens during times
of economic insert uncertainty is innovation
becomes deprioritized against risk,
(19:21):
and it's it's back to being the safe option. So you
need to unlock this resistance, and you need to
show that by actually adopting the innovative approach,
you're giving them a safe solution. It's safer than the status
quo. It's gonna meet their needs. So it has to
be positioned as giving them lower exposure than the
(19:43):
existing solutions they have, or there's gonna be a natural
resistance to sticking their neck out. And back to that statistic of
over seventy percent of chief procurement officers
reporting that, the the need to avoid
mistakes is actually increasing in their organizations.
(20:03):
ESG, make it a strategic differentiator. Just because
the priority is on cost doesn't mean that
organizations don't still have their commitments to their ESG
goals. And I know certain organizations are revising those, but
there's plenty out there that still have public statements around
ESG. And you need to leave with leave with proof.
(20:25):
Avoid greenwashing. It stands out really quickly, and
it kills your credibility. You have to show evidence.
You need to highlight compliance and how you do your reporting is
gonna make their job easier. And then really, really
important, it helps in the cost argument demonstrate
how, value is delivered through the ESG
(20:48):
programs, whether that's cost saving or risk reduction.
And then emphasize the reputational gains that it will make
them look good internally and externally if they go with your solution
because it fits with their ESG goals. Let's get
to working with procurement. You need to win,
by working with them proactively. Waiting doesn't help you at
(21:11):
all. You need to be proactive. You need to be
outcome orientated. You need to collaborate effectively with them.
And collaboration is not a soft term. It's
a strategic push. And Todd's
mentioned on many occasions, you can achieve an awful lot by
working with procurement. And they're under
(21:33):
pressure to save cost, to deliver
the supplies, to be effective and not make mistakes.
At the same time, they're dealing with this inflationary
economy, the supply constraints and everything else. Your ability to come in
and help them, support them is real value for the
procurement team and will lead them to champion you.
(21:56):
We talked about outcome focused. It's gotta be there. It's critical.
And offering flexibility. What are the different approaches you can
take? How can you structure the contracts differently? How do
you structure your payment in terms of milestones and
delivery? How do you, change
the the the processes that you're adopting to make it more
(22:19):
effective for procurement, and less costly for them to transact
with you? Absolutely critical. And then lastly,
give them the internal tools. If there's one thing that
drives me nuts, it's let
me describe the situation for you. Procurement people tend
to shift from categories of expended expenditure as their,
(22:43):
as their careers progress. And they have to learn a new
category as they move into that area, and there's a
learning curve. And loads of people trying to
influence them, loads of history in their in their own
company as to about how things should be done. There are very,
very few companies, suppliers out there
(23:05):
that provide buyer guides to help the procurement
folks navigate through that process. And to be effective, a
buyer guide has to be neutral,
unbiased, and factual. And,
honestly, the the suppliers that get the best credibility are the ones that
point out the areas where they're not proficient as well as the
(23:27):
ones where they are and why they're still a good choice. But
that honesty really resonates with procurement.
And that leads us on to the necessity of building
a business case that's robust. It's not enough to have
the value. You've got to help procurement sell it internally
because procurement are going into a closed door meeting with
(23:50):
finance and the stakeholders, making recommendations
on behalf of cross functional teams. And
they need to have a comprehensive effective
value business case to present to finance, and you
need to be confident they can represent you effectively
even though you're not in the room. And that's really the preview to the
(24:12):
next episode because Todd's gonna walk you through how to make
those business cases that get green lit.
And I invite you to reflect what internal tools are you
currently providing today to help your procurement,
counterparts be successful in championing you as a
solution. That's the main body. This is me
(24:35):
and my contact details. I am now working
with sales teams, trying to help them understand the procurement perspective,
how to actually engage effectively with procurement teams,
the different type of procurement teams, the different kind of procurement personas.
So welcome any dialogue there. That being
said, Bruce, I think we're open to any, questions people may
(24:59):
have. Awesome. Okay. Yeah. I I had a curiosity,
Dean. Just based on your experience, what percent of,
sellers show up and help shape that business case when once it gets
to procurement? 10% or less.
10% or less. Seriously. Most do the bid,
drop it with procurement, have an indication that they got
(25:23):
the business, maybe get into contractual negotiations, which is a whole
other night nightmare and can be easily fixed. But they
don't help build the business case to sell the proposition
in. A lot of the time, that's procurement's fault. They don't engage
the sales team to to come on board. But they again, sales
needs to be proactive in offering that to the procurement organization.
(25:46):
Well and, Dean, another question. What percent of deals,
for procurement to approve require a business case
even before this period of economic uncertainty?
It's driven by size, but, generally, anything over about
500,000 will require a business case.
Mhmm. And, typically, a million
(26:09):
dollars and up are landing on the CFO's table, and
procurement's expected to actually signal whether they approve or not. So
there's organizations I've worked for where the CFO would
not approve a deal unless I personally endorsed it. If it was
coming across his desk, I had to give the green light to it.
So the lesson there is sales teams that think it's
(26:32):
really cool to try and work, around procurement,
they they are gonna find it's a very tough road. I would tell
you in about 90% of the cases with the
CFOs where I've had to give approval, if I haven't had my
approval, the the the, project doesn't go ahead.
(26:54):
Yeah. Yeah. Absolutely. I think I you had mentioned to me that
if you if you say no, there's a 10% chance that might move
forward, 90% chance that it says dead on the vine right at that
point. And, so so interesting that one out of
10 sellers actually helped shape the business case that that
carries that internal dialogue. That's pre this period of,
(27:16):
economic uncertainty. I'm hoping some of the sharper
sellers might realize, gosh. Dang. You know? And you said
before that, you know, even before this period, such a high
percentage of deals require a business case, especially
over a certain number, internally, whatever that that rate
might be. But only one out of 10 sellers is doing that.
(27:38):
So there's a huge, huge gap there
in There's a helping buyers buy. Even
at the 10%, Bruce, not all of those are demonstrating
the value. They're they're just
helping with the the cost times the volume, maybe
TCO, total cost of ownership, as a criteria. But
(28:01):
what they're not doing is demonstrating the full bird value proposition to
the organization. Yep. Yep. Yeah. It's
so anyways, huge gaping opportunity
even before this period. Now that we're in times of economic
uncertainty, and then Dean just laid out, you know, what is that
response, especially with the cost oriented orient, focus.
(28:25):
How can sellers show up and do a better job of that? And, Todd, I
know you're gonna just really lay heavy into that in in our next,
webinar series. And, again, if I yeah. For everybody out here
listening, if you've, if if you need to get that job
done, no better guy to bring to that that knife fight than Todd,
I I must say. But, Todd, I'm sure you've got
(28:47):
questions too. You've been thinking about David as well if you've got any questions to
kinda fire at Dean. And and we've all got different industry experience,
but when Dean said 10% show up with a business case, my
experience is 90% of those I could drive a truck through. They're so
bad. And I've got a list because Sharon, so
I need to say what not to do. But that just because it's a business
(29:09):
case doesn't mean it's a believable one. It's accurate, and the
customer feels confident taking it up there. I've seen one I won't get into it.
Spelling mistakes and the likes. That's one comment. And then
this is going back a while ago, Bruce, but my colleagues would say,
the customer never asked for a business case.
Okay? Terminology is different in every company. Do they ask for justification?
(29:32):
Is there a budget threshold? I mean, ask the question in
different ways. Would it help you get the approval for this if I brought you
a business name or something? Because they might not come to you.
The bid didn't say we needed this, so why should I do it? And I'm
like, go in your own company and ask for a million dollars and not have
to write a business case. I wanna come work for you because odds are
(29:53):
your boss is gonna ask you why. And if you come in and say,
because I like the guy and he's fun, probably not a good enough answer to
get a million dollars. You bet. Yeah. The,
a thing I'd add on to that, though, is a lot
of times when the budget's been formulated, the the stakeholder
will talk with a given supplier to
(30:16):
try and build the budget up. Mhmm. And that becomes de
facto the business case that they run run with throughout the whole
project. And even if that supplier isn't successful,
nobody's practically going back or very few people are practically
going back to to the winner of the process to say, help me
justify this and show me where the value's coming from. And
(30:39):
that there's a interesting corporate executive board
statistic which showed that deals, that
weren't tended to or managed effectively lost
75 percent of their value over two years.
Whereas those where people actually try to realize the value,
work it, and drive the whole process forward,
(31:02):
saw a 25% increase in value over the original
value proposition. Hoping the customer get the the
value. The success is more than just, here's the business case. Thanks for
the order. See you around because, Yeah. You better
you better fortunately when you come back the next Yeah. I and this is an
area where both procurement and sales have to do a lot better
(31:25):
because they're always chasing the next opportunity, the next project,
and they need to spend more time on the ones that they've actually delivered
to realize that value because from the
sales perspective, that can lead to a lot more sales.
Mhmm. For sure. Hey, Dean. We do have a
question, Sebastian. Thanks for asking it in the chat. But,
(31:48):
Sebastian or I'll I'll read your question. Dean, you mentioned that there
is risk aversion when there is economic
uncertainty. How do procurement teams weigh up
the pain of change, cost, and their associated
risks when making decisions? Okay. Thanks for that,
Seb. Basically, what we're looking at
(32:09):
is what is the actual cost to affect the change? What is the time?
Costing also includes the internal resources, the amount of
focus it will take away from, other opportunities.
How could we have used those resources elsewhere?
And then what is the likelihood of the project actually failing
(32:31):
or not delivering against the the benefits that
it's supposed to realize for us as an organization.
And Hillman will certainly spend a lot of time trying
to appraise that, and we'll do so with a very skeptical
eye. They're they're looking to disprove things as part of,
the acid test for the supplier. Will it actually deliver what
(32:54):
we expect it to deliver? I love
it. Yeah. And we'll speak, towards our our third part of this webinar
series. But around the buying experience, it doesn't end
with signing the contract. It's delivering that value. And especially
in times of economic uncertainty, you wanna grow that value
within your existing client base. Make sure they're getting the value.
(33:16):
Yeah. Yeah. Yeah. So and and then you miss miss that memo. Yeah. One
of the things sales teams tend to miss is procurement
is really plugged into the organization and knows what's going
on. Mhmm. And if you've been successful with them, if
you've helped them achieve their goals, if you understand them and
align with them, they're much more inclined to identify
(33:39):
opportunities that you haven't realized in their
organization to increase the value to you as an
organization. Yeah. Dean, I'd mentioned to you in one of
our previous calls that, you know, I had and David had the honor
of being, you know, on a a vendor of record for
Alcatel Lucent. But because of our,
(34:02):
our winning streak and value streak for them and also working
with procurement on that, making sure our deals get got approved
and into play for the organization, that one of the heads of
procurement became a a, you know, a friend. And and
if something was moving in the account that we weren't involved with, chances
are we'd get involved invited to it. You know? So it was a it was
(34:24):
a blind spot for us, but procurement very often would help
us be invited to the table because they knew there was initiative.
And and that buyer, for that initiative, wasn't considering all the
best players, and, hence, we'd get invited to the table. So
here here's an interesting stat that sales really, really
needs to absorb. Procurement is typically
(34:46):
67% of the way through the process before they contact
suppliers. So it it's
imperative that you have a proactive relationship with
them that's actively managed so that you get
insight as to what's going on earlier in the process.
Because by then, we've researched the suppliers, we've understood
(35:09):
the market, we framed our specifications, and you've
missed all these opportunities to help shape the bid
documents, the selection criteria, and the outcome.
Dean, I have a I have a question for you. I'm hearing from some of
my clients that customers are looking to consolidate the
number of suppliers. Yep. And and and they're wondering,
(35:31):
like, you know, how do I get to be that supplier? What's driving my
customer's behavior towards that consolidation? Do you have any
insight into what's going on there? Totally. So
this is a lot about managing tailspin,
concentrating power into a select number of suppliers
in exchange for economic advantage. So,
(35:53):
if you take a typical benchmark of a couple
of years ago, it was,
benchmark was about 5,000 suppliers per billion dollars
worth of spend, best in class or somewhere between two and a half and
3,000 vendors. It's not uncommon to come
across organizations per billion dollars of spend with
(36:15):
25,000 supplies. So that's
one of the drivers. Reduce the tail spend, concentrate it in
exchange for better
terms, both for the the customer and increase revenues for
for the supplier. But to do that, you
need to become as much as possible stop shop within that category. What
(36:38):
are the all the services, products, capabilities that
you can bring to that relationship in order to be successful?
It's not just about sacrificing your your pricing
to come in and win the business. It it's much more than that.
And if I can, there's there's a fallacy around e
(36:58):
auctions. If you do get dragged into an e
auction, the assumption is that the lowest
price is gonna win. Any good sourcing
organization, that's just one of the points of reference. They're
looking at the quality. They're looking at insurance and supply, innovation,
all these other criteria, as well as what the price
(37:20):
is in order to come up with the right solution.
So in periods of consolidation of suppliers, it's
very real. Be proactive. Go out there. Show them how you
can pick up more of the business, with
the right terms, the right service, the right quality. And
there's nothing wrong, it might not happen a lot
(37:43):
of the time, but there's nothing wrong in actually asking, the
the buyer for what spend data is. What is out there?
What is the size of the opportunity? Where else are they spending money with
what suppliers that you could actually come in and provide those goods
and services for them? Thank you,
Dean. Hey, everybody. We just got a couple minutes left as part of our scheduled
(38:05):
time together. Any other questions? This has been such a great
dialogue. I'm surprised I haven't reined the
issue of, consultants yet,
Bruce. You wanna talk about that for a little bit? I know that's a hot
one. Probably something people aren't thinking about. As consultancies
are seeing challenges to their other books of business, they are increasing,
(38:29):
their forays into the procurement world. We are seeing compound,
annual growth rates between eight to
14% as they're out there recruiting procurement
folks, building their capabilities. And they're pitching
typically into finance or to the CEO,
promising cost savings and driving those. And I've worked with
(38:51):
some excellent, organizations,
consultancies doing procurement, projects. And I
I've worked with some that are just interested in slashing the cost come what
May because the way the contract is set up is on a
share of savings. And I've always considered that
to be really, really dangerous, because the
(39:13):
propensity to just go for the lowest cost rather than what serves a
long long term interest of the client, can
be very detrimental. So the way to
counter that is, again, get back to the value
argument. Empower procurement. Be proactive.
If they're able to show that they're making the progress, that they're
(39:35):
delivering against the expectations of the organization and you're part of
the solution, you've positioned yourself well. If you find
yourself in the middle of a consultant, program,
the same still holds true. Demonstrate the value,
articulate it, work with procurement, and even with the consultants to
demonstrate that value to them. Sounds good.
(39:59):
Any any last question, Todd or David as well? Any, to
round out? I guess maybe it's more for the sales side, so we'll leave
it for a few weeks. But it's amazing when we all have a CRM system,
whether it's Outlook. How well, maybe it's a better way to put it.
How many salespeople come back in six months and check? I thought
the solution was gonna bring this value to you. Let's find out what it's
(40:20):
realizing and how many say goodbye. I mean, twenty
five years, you have that capability. But today, everybody's got a
even a sticky note. Call back my good customer and see how I
did. Very, very few is the answer,
Todd. I it's an incredibly low percentage,
and I think that's structural to both,
(40:45):
procurement and the sales teams. There is a
focus within procurement of supplier management, supply
development, and how does that go forward. But they're so resource
constrained. There there's few organizations that can do that to the extent
that they want. And the sales team's under, under
the gun to keep delivering more revenue and achieve their
(41:07):
targets, which makes it hard for them to look back. But
as we've said, that's how you can really expand the
the revenue stream with your existing customer, which is a lot easier than going out
and acquiring a new customer for its sake and
really building that value case for them.
And and the suppliers that do that are unfortunately too far,
(41:30):
few and far between for my liking. But it it's a two way street. You
can't say it's the sales team's fault. It's also, the
customer's fault as well. They've they've got to invest the the
resources in fully realizing that value. I can tell you, out of the
companies I worked for,
only one engaged a formal look
(41:52):
back process to make sure that the project's actually
delivered the value and the rate of return that was put into the
initial business case. Yeah. So it's it's
it's Which is crazy. Crazy because more and more businesses are
going to this customer success, or I'll pay you based on value. And
all I heard from some salespeople before was, we're not sure our solution would
(42:14):
deliver the value, so I don't wanna go back and measure it. Yeah. He
got it before they just made up a number and gave it to somebody. It's
like, if it's not realizing the value, it's probably, I hate to determine,
easy fix. We you know, change them for upgrade that or do that.
And the businesses that bought the solution, they got the value. They were usually
easier to meet with than back to procurement saying, hey. Talk to your team.
(42:36):
This is what they said the value were. So what one of the things
that's, really tough is
procurement will come in and demonstrate, okay. This is the value.
These are the cost savings if they're they're looking to drop money down to the
bottom line. What happens is the budget holder
typically takes that money and spends it on something else. And
(42:57):
at the end of the year, finance is turning around to to procurement
and saying, well, where the hell was all this value that you delivered? Because we
can't see it anywhere. Uh-huh. And then, yeah, to go through convoluted
mechanisms to actually capture the cost and and the the cost
savings and drop it to the bottom line, which doesn't do wonders
for procurement's relationship with the internal stakeholders.
(43:21):
But it's rare for me to see other other
departments within your organization take up that bat baton and run
with it. Well, you guys, on on that
note, I know we'll talk more about that. How do we get this sitting right,
especially for the the vendors that wanna win more and more often and keep their
their valuable clients and grow those valuable clients. I know our next
(43:43):
session is just gonna be really rich in that regard. So so we've,
we've hit the procurement perspective. Dean, thank you so much for
helping us understand the internal dynamics, how the buyers' minds
work, what changes in times of economic uncertainty. Todd,
I know you're totally gonna deliver on how, you know, how do we show up
now? How do we partner with the client, with on the buy with the people
(44:06):
on the buyer side, put that energy into, you know, setting
up the business case, measuring for it, getting that time for for
to the first impact scheduled and agreed to and how we're gonna measure it and
proving value so we can grow that value for that account and and grow
our business, our revenue number. So that's gonna be super critical.
And then we'll again, our our third one in June, we'll round out with a
(44:28):
how do we drive an overall value experience that our
buyers are just gonna love and make us the vendor of choice.
So, anyways, on that note, thank you everybody for showing up.
Dean, thanks so much for the energy you put into your presentation.
And, Todd and David, thanks for for your wisdom and and shaping this
whole thing and getting this underway. So I I'll go ahead and end the
(44:50):
session now. We'll send a recording out to everybody and some bonus
materials as well, and then we'll see you on the next one. Thank you so
much. Have a great day. This session gave us a powerful look
at how decisions get made inside complex buying organizations.
We heard about the internal tug of war procurement phases, the
risk aversion that's growing across the board, and the massive
(45:14):
opportunity for sellers who can help build a clear defensible
business case. This is just the first of three sessions in our
revenue mastery series. Next up, the business case advantage
with Todd Snellgrove, where we'll break down exactly how to win
executive buy in without defaulting to price cuts.
If you enjoyed this episode, please like and subscribe value pro
(45:36):
show. And if you're feeling kind, leave a review so others can find
and enjoy it too. Thanks for watching. Wishing you success.
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