The New Players in Buying

The skills required to manage a business in the past where there was clarity, certainty and very few surprises are different to the skills needed to drive a business in an ever changing business environment.

The New Players in Buying

Experience, a steady hand and being risk averse were key to a successful career as an executive. Now we need innovators and risk takers, what we call internal entrepreneurs. We are now seeing Chief Innovation Officer and Digital Transformation Officers playing a crucial role in pointing organisations in the right direction.

From the trenches… Dynamic Capability Matrix

“After taking a couple of big hits to our business we became worried that our executive team were not diverse enough to identify and drive the necessary change in our business.We set about mapping a dynamic capability matrix, this identified the skills, attributes and attitudes required to drive our business through an uncertain future. This matrix was over layed with our existing executives and the gaps identified.We took these gaps and put plans in place to bridge them, these included upskilling some executives, succession planning and new appointments.”

Changing Role of the Chief Financial Officer

The Chief Financial Officer (CFO) used to be a Financial steward recording and reporting on the financial activity of their organisation.This has changed dramatically over the last 10 years as shareholders experienced huge losses as a result of the global recession.

Their role is now more of a corporate strategist and as a catalyst for change. If they are not part of the solution then they are part of the problem. This is why we are seeing a lot of organisations changing their CFO. 

Changing Role of the Chief Procurement Officer

We are now seeing Chief Procurement Officers (CPO) sitting at the executive board along with the CFO. Organisations that have engaged a CPO are seeing significant improvement in Profitability. This new role is not measured as old procurement was i.e. on reduction of costs, it is now measured on the growth of the business, one of their key priorities is to find different innovative ways of doing business. Sustainable profitable growth is key.

Sophisticated buyers

Buying has become more sophisticated e.g. we now deploy buying strategies depending on who our preferred supplier is.

Sales people have always been trained well as there is often a clear return on investment. Buying was slow to this but we’ve caught up. 

From the trenches…

“We used to train buyers to engage with sales people and simply say “you are too expensive”, we would then watch as sales people dropped their price or increased their discount.We then moved onto buying 2.0 where we said “you are too expensive” then shut up for 2 minutes and let the sales person talk. We didn’t listen to them just repeated it louder and with more intensity “YOU ARE TOO EXPENSIVE” we would then watch as the price dropped and the discount rose. We now deploy buying strategies depending on who we are buying from.By the time we invite vendors in to talk to us we are more than 50% of the way through the buying process. We often know what we want, from who and how much we want to pay for it.”

The buying and selling process are similar but not the same, the key difference is we do not enter the same stage at the same time as you. E.g. we may evaluate the market and decide you are the only viable option for us, we’ll invite you in for what you believe is the discovery phase when in fact we are already in the negotiation phase.

From the trenches…

“One of the buying strategies I use regularly is something I call “The smiling assign” Here I would smile at you and tell you I love your business, your organisations colour is my favourite colour, I want you to have the business. But there’s a problem, another executive is pushing one of your competitors and their price is lower. Is there anything you can do? Absolutely mr. CFO I am told, we can give you a discount. A discount I would say, what’s that? Well I’m told, it’s where we take the original price quoted and reduce it by an agreed percentage. Wow i say, you couldn’t do that for me? We could… Ahh but you wouldn’t do that me? We would… And off they go back into their organisation to negotiate a discount on my behalf. The sales reps come back to me with a discount, I smile, say thank you so much, I can’t believe you did that for me. However I don’t think it’s meant to be, the competitor has dropped their price, I don’t what you could do now? We can get you more discount, I’m told… You couldn’t… I say? We can? But you wouldn’t? We would… Wow I say and off the sales rep goes back into their organisation to renegotiate on my behalf. Now how many times do you think I’ll send someone back in to negotiate on my behalf before my shame kicks in? I have no shame, I’ll send you back in until you say no more, 110% is as high as we’re prepared to go. Negotiation starts when you say no. Credibility is built when you say no. No is not only an acceptable word to be using with your customer but a desirable one as it is the quickest way to build trust and credibility.”

Key learnings

Customers buy something new when there is a change in their environment, not because your product or solution is wonderful, we wouldn’t talk to you if we believed your product or solution was not wonderful, that’s the starting point. If you don’t know the compelling reason the customer will do business with you then the chances are they won’t.

Negotiation starts when you say no, trust and credibility are built when you say no.

To find out more contact info@the-cfowhisperer.com

By Declan Tyrrell | Sales Coach & Facilitator

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