“Don’t listen to what a buyer tells you. Instead, look for your own facts by making a list of who your real competitors are.” – Mark Schenkius in today’s Tip 622
Why buyers behave the way they do?
Join the conversation below and check out the links!
The Other Side of Sales
Mark Schenkius on LinkedIn
601: Why Buyers Behave The Way They Do (Kraljic Matrix Series Part 1)
608: Why Buyers Behave The Way They Do (Part 2 – Routine Items)
615: Why Buyers Behave The Way They Do (Part 3 – Leverage)
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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: What’s going on Daily Sales Tips Community. I’m Mark Schenkius and I’m back with Part 4 of Kraljic Purchasing Portfolio Matrix. So far, we’ve covered a high-level overview of the framework, and we’ve talked in more detail about routine and leverage items. If you need to get caught up, check back in on tips 601, 608, and 615.
Today, we move to bottleneck items. This quadrant is actually the flip side of leverage. Risk is high, but profitability is low. Here the strength is in your hands. The market consists of one of a few suppliers that can behave monopolistically to force prices upward. Even though these items have a limited impact upon company profitability, they still demand a high level of intention from buyers. And trust me, they don’t like to spend time here since all they do is manage risks and not deliver real monetary value, which is usually what they think they’re paid for.
A great example of this is a small piece of specialist software. It’s difficult to source elsewhere. However, financial impact is typically low.
For buyers who are interested in changing the status quo. The strategic approach they could take is twofold.
1. To find or develop alternative suppliers.
2. Simplify it as specification, which essentially creates opportunities for other suppliers to step in.
The interesting bit is that buyers normally behave reactively as opposed to proactively, but regards to bottleneck items. They tend to address issues when they appear rather than deal with them upfront. And that creates opportunities for you.
So what does this mean exactly for you as a sales professional?
Well, in simple words, you have an opportunity to exploit the customer or buyer since you have nowhere else to go.
The only caveat here is that once a buyer feels that their backs are against the wall, they will look for ways to get out.
So the trick here is to use your preferential status just enough not to frustrate the buyer.
Now, one thing to watch for is that buyers will never ever tell you that you’re a bottleneck supplier to them. Since it’s weakened stand negotiation position.
So don’t listen to what a buyer tells you. Instead, look for your own facts by making a list of who your real competitors are.
If you can’t think of any, there’s a good chance. You’re a bottleneck supplier. 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 final installment coming next Friday. You should also come back tomorrow for another great sales tip. Thanks for listening!