“Be creative in what you can do since it is never an easy step to take. It might require a significant change in your proposition.” – Mark Schenkius in today’s Tip 615
How do you deal with buyers in a leveraged market?
Join the conversation below and share your thoughts!
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Scott Ingram: You’re listening to the Daily Sales Tips podcast and I’m your host, Scott Ingram. Today Mark Schenkius is back with another installment in his series. Mark is the founder of ROI 10 where he helps sales professionals get better at dealing with buyers, and he’s also the author of “The Other Side of Sales,” where he shares his perspective after 15 years in procurement. Here he is:
Mark Schenkius: Hi everyone. I’m happy to be back with part three of the Kraljic purchasing portfolio matrix. If you’ve been following along then, hopefully, you haven’t a high-level understanding of the framework. If not, don’t worry. Check back on tip #601 and #608 to get caught up.
For today’s tip, we moved to leverage items. Where items have high profitability, but a low-risk factor buyers possess the balance of power in the relationship and leverage the strength to obtain great value for that organizations. Buyers, just love to operate and leverage the market for two reasons.
One, this is typically a commoditized market with an abundance of suppliers. So there is no risk for buyers at all.
And two, these items have a high financial impact. So it’s a great opportunity to show the added value that buyers have. A typical example of this is road transportation for a fast-moving consumer goods company. There are hundreds of suppliers of logistics services, and typically transport represents a large chunk of their spend.
As a result, you’ll find buyers, run requests for quotations or auctions to get the best prices in the market. And in all fairness, buyers can get away with this because if you don’t play ball, someone else will.
So what does this mean for you as a sales professional? How do you deal with buyers in a leveraged market?
Fundamentally, there are two options here.
Option one, you focus on your own cost competitiveness. This means you accept the market you’re in, and you’re looking for ways to be cheaper than your competitors. By doing so, you would have the best chance of winning business.
Option two, you make your product or service unique by differentiating from your competitors. You provide a product or service that nobody else can this way a buyer has to work with you because they simply have no other options.
Be creative in what you can do since it is never an easy step to take. It might require a significant change in your proposition. That’s it for understanding leverage markets. Happy negotiations everyone!
Then make sure you’re subscribed to the podcast so you don’t miss the rest of Mark’s series with the next part coming next Friday. You should also come back tomorrow for another great sales tip. Thanks for listening!