Sales from Mars versus Procurement from Venus – or Working Together

Much has been written on differences and similarities of B2B sales and procurement professionals. Sometimes these two types seem to come from two different planets, but then we hear talk on synergies and needs to cooperate more closely. Let’s first discuss the “Women Are from Venus; Men Are from Mars” perspective. The saying comes from a book title of John Gray (1992) who claimed that men and women are psychologically speaking fundamentally different. This then (according to Gray) has an impact on how the two sexes communicate and tackle problems.

So let us assume for a moment that sales people come from Mars* and procurement people live on Venus*. The table below summarizes some characteristics as I recollect them from my practice.

See also on Big Five;  Emotional Intelligence (eg Coleman**);  Entrepreneurial Orientation (Lumpkin & Dess, 1996).

Starting in the academic realm, B2B sales (& marketing) seem firmly positioned in the domains of commerce and entrepreneurship, whereas procurement (purchasing) is in the domain of operations management or at best in supply chain management. Still following the two planets concept: Procurement struggles with executing corporate strategies, with demands from internal customers and stakeholders, and with growing requirements on sustainability and risk management. Public procurement additionally must be transparent and adhere to strict regulation. Sales people struggle with the digitalization of procurement systems, with increased competition, shorter product life cycles, margin pressures, and complexity & volatility in market demands.

Train them!

Sales training programmes still use the AIDA model (Attention, Interest, Desire, Action; Strong, 1928) and recent research suggests this model still works (Hassan, 2014).  Fortunately, sales programmes also use more modern models, such as the SPIN model (Rackham, 1978). Via this model the seller tries to determine problems of the buying organisation via four types of questions on the Situation, the Problem, the Implications, and the Need-Payoff. These four questions combined help the seller to make a buyer aware of his problems, and then the seller can offer his/her solution. An alternative is using a selling technique presumably based on Socrates (400 bc) that should stimulate critical thinking with the potential buyer. 

These models have proven their value in practice but then ignore tendering processes in large-organisation procurement. Such processes (though sometimes perceived rigid and formal) are demand-driven (pull approach  in SCM jargon) and do not always fit the push approach of a sales organisation. Hence, we have a contradiction: listening to the voice of the customer (marketing orientation, e.g. Kohli & Jaworski, 1990) and trying to understand the customers desires, insights and opinions versus we need to push products & services and hence push sales for the continuity of our own organisation (sales or product orientation). But this type of finger pointing is not the point I wanted to make in this Saturday blog.

The point is the mismatch between the potential value that the seller can offer versus the value for money that the buyer needs in a particular case. In part this mismatch relates to different (short term or long term) personal or organisational objectives, in part to different processes or timeframes. Take for example Dutch public procurement: a massive 60 billion euros of annual sales goes via the digital portal TenderNed. One important sales competence “building personal relationships” does not work via this portal. This competence is only effective after the seller has submitted a winning bit; but then the rational contract and supplier management phase starts with KPIs, agreed quality levels, progress meetings etc. As most public tendering organisations chose the so-called open procedure, the opportunities for suppliers to discuss specifications and options are limited. However, there are more procurement routes, each offering limitations and possibilities for a good sales force (See for some examples: construction or healthcare in the UK; or public procurement in Scotland).

Executive sales training programmes sometimes recommend bypassing the procurement department and going straight at the decision maker. Whether this is a good strategy may also depend on the procurement maturity of the client or the type of organisation. Paesbrugghe e.a. (2017) for example has found that as purchasing evolves from respectively price-focused, cost-focused solution/innovation focused to strategy-focused, each purchasing stage requires a different sales strategy. Moreover, procurement in for example public organisations acts as a dominant gatekeeper and tender legislation or firm policies forces such organisations to involve the procurement department. Interested sales teams could then better try to understand the process and write a winning bid. (See e.g. the suggestions from this Australian consultancy firm). Nevertheless, both sales and procurement would benefit from a dialogue on their respective roles.

Two To Tango
As the 1950’s song aptly said: It Takes Two to Tango: both the seller and the buyer need to agree on an optimal relationship. Since long this has been done via simple account management models or 2x2 supplier portfolio models (e.g. Kraljic, 1983) which have their benefits and limitations. Gelderman& Van Weele (2003, p. 212) have for example recognised nine supplier strategies in the Kraljic’s matrix of which several are of a win-lose nature. Other research (e.g. Dubois & Petersen, 2001) have concluded that the Kraljic’s matrix is not suitable for managing partnerships. Recent research in the US (2012 - 2016) has popularised the vested business model that focuses on win-win relations. (More on Vested in a next blog).

Things of beauty are not only a joy forever (John Keats, 1818) but also contextual as Beauty is in the eye of the beholder (Margaret Hungerford, 1878). The same seems true with the application of relation management tools. At HanzeUniversity we recently worked on an SME management tool tot assesses the capabilities and ambitions in SME buyer – seller relations. Such risk-based assessment tools exist for simple to complex relations between large organisations (e.g. Zsidisin, 2004). However, we developed this tool in action research and inductive from the SME context. Hence, we posit that our tool gives a better allowance for this context, which at least the participating SMEs have confirmed.

In summary, my guess is that sales and procurement people can benefit from an understanding of viable relationships or business models. Both parties must have and exercise their ethical values. Both need to reflect and learn from best practices. Both parties need to master relevant strategies and tools e.g. in buyer-seller negotiations. (For Dutch blog readers – check our negotiation ebook special in Shoppen Voor Professionals; due Mid-July 2017).

Same interests?

SME buyers do not live on Venus and SME sellers do not come from Mars. They know they live on the same planet earth and both want to remain in business. Recently I saw an SME owner decide to continue his business with a current logistics supplier. The pricing was higher compared to competition but the SME owner trusted his intuition. The SME value proposition was product leadership and he believed the current supplier could provide several (non-quantifiable) benefits. One of the many critiques on the Gray book** is that he stereotyped us humans too much. (Kimmel, 2017 youtube video). Let us not make the same mistake in buyer-seller relations. 

* Most of these stereotypes are not true.
** Note that science is a process of questioning validity of earlier statements: both the books of Gray and Coleman have met criticism. 

*** At Hanze university, in September 2017 we will again run the honours minor of B2B Sales & Innovation Talents with some nice interaction of sales and procurement. In February 2018, we will run the International Procurement minor for the 3^rd year; with some advanced buyer-seller negotiations. Hanze is becoming more entrepreneurial in its teaching and applied research.