Sales: Meet the new purchasing department

Last updated on May 13th, 2019 at 02:40 pm

I feel I need to preface this column with the following disclaimer: I have never endorsed selling to purchasing people, and this article doesn’t change that! Now, read on.

Let’s say you’re a corporate fast-tracker aspiring to reach the top of your company. You’ve got your eye on that corner office, and you know that to get there you must show a history of success in running key areas of the company. So, you map out a career path that takes you through plum assignments in operations, sales and marketing, and opportunities to manage strategic projects and startups.

Then comes the bad news: You’ve been “promoted” to run the company’s purchasing department! Your reaction would probably range from “I’m done for!” to “Who’s mad at meω”

In this column and in my work with clients, we have steadfastly exhorted salespeople not to sell to purchasing agents. We also advise salespeople to check the career paths of the executives to whom they are selling, and if the executive has spent a long time in purchasing, to be skeptical about the true level of influence that executive really holds. The white-haired salesperson schmoozing the white-haired purchasing agent has become the textbook picture of selling’s old, outdated paradigm.

Indeed, when it comes to innovation, about the only change that the purchasing profession can claim in generations was a name change – entirely cosmetic – from “purchasing” to “procurement.”

Shakespeare’s quote: “Thou doth protesteth too much” reminds me of purchasing agents who go to some length to convince salespeople that they really do look at more than price. But powerful and significant changes are afoot, and now, incredibly, some actually do — and they can do something about it.

For the first time ever, in a handful of companies, the purchasing job is being transformed from a corporate dead end to a true strategic function. Salespeople need to understand that change. They also need to be able to discern when it’s happening for real in one of their accounts and when it’s mere window dressing.

The most far-thinking companies are adopting a world-view of “strategic purchasing.” Once the ultimate business oxymoron, strategic purchasing gives new clout to the purchasing operation. General Motors president Richard Wagoner was promoted to his current position from the automaker’s procurement division, and increasingly, a stint in purchasing has become, for many companies, a mandatory stop en route to the top, not a sidetrack to corporate oblivion.

Progressively managed corporations are shifting their purchasing philosophy away from a narrow focus on unit price and toward one that examines the “total cost of ownership.”

Corporate Express Corp., an office supplier and one of the first to capitalize on this trend, observed way back in its 1997 annual report: “Each time a large company purchases $100 worth of non-production goods, it spends an additional $150 to cover the costs of ordering, processing and delivering those goods.”

What does all this mean for salespeopleω

First, they must size up the company they’re selling to: Has it embraced the new philosophy of purchasing, or is it just speaking the languageω Do company personnel speak in more current vocabulary, using terms like “supply chain management,” “strategic procurement,” and “total cost of ownership”ω

Second, and more importantly, they must look at the company’s all-important organizational decisions: Do the people in senior positions have any background in purchasingω Even more important, what is the background of the person assigned to run the purchasing functionω Show us someone with a successful record as, say, vice president of manufacturing, who is now in charge of purchasing, and we’ll show you a company that takes the new strategic procurement paradigm seriously.

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