Big Pharma (all the largest pharmaceutical companies in the world) and Big Food (all the big brand companies we know and love) have all adopted, in one form or another, an approach to purchasing called category management. This isn’t new but it is very well embedded and it has some serious implications for the way in which sales teams need to approach these businesses.
Category Management asks the customer to work across their organisation as a team to clarify their needs and wants at a good level of detail, to identify the most appropriate way forward to acquire the products or services and to seek the broad delivery of value from the imply chain and the use of those products and services. Of course, there’s more, but the fundamentals are pretty much the same. Some categories may value areas like risk avoidance and low price more than innovation and development, or have an entirely different mix of needs and wants.
Of course, their needs and wants will be influenced by their business strategy; growth and expansion drives a different set of behaviours and needs than contraction and withdrawal. Equally, their approach will be influenced by their current position and historical activity, and the current internal stakeholders engaged in the conversation.
Further, the approach defined will be dependent on the way in which the customer perceives the marketplace to be working. Understanding of the boundaries and dynamics in a marketplace will be built into any approach which is developed for future purchases.
As such, an organisation which has to sell to a business which has a developed category strategy will require a different approach than selling to a business which does not have such a strategy. The best way to sell is to address the content of that strategy and demonstrate how the products or services offered best meet the category strategy.
The big question is whether a sales team can either access or imagine the category strategy. Asking for a synopsis would be a good start, but if it’s not available, it may be possible to develop a good approximation of that category strategy – after all, it was put together by a similar group of bright motivated people who were following a well described process.
To do this, the sales teams needs a similarly constructed process, which allows key insights to be developed about the customers strategy, and identifies the way in which the sale needs to be positioned to maximise the chances of success.
This may sound impossible, but much of the required information will already be available, just not assembled in a way that allows a possible customer strategy to be identified. As such, getting a degree of guidance on how this might work is a sensible step. Remember that your own procurement team may have insight and understanding in how this works and could be developed.
Working in this manner, a number of sales teams have dramatically increased their success rates in replying to customer needs, by having a very clear focus. Without this, the reply to a customer will be based on something other than their strategy, and therefore has far less chance of success.
Mark Hubbard thinks about sales and procurement at http://www.smartbrowndog.com