Vendor banging your head against procurement's door? Here's how to get noticed
Author: Joanne Simpson, Director, Corvative Pty Ltd, Australia
Are you a vendor banging your head against the wall of a large company's procurement department? Do you have a great product or service, but can't get anyone to talk to you? This article reveals why procurement can't help you - with a few ideas that might help you get through the door.
It is easy to assume that the procurement function is the gatekeeper for vendor registration. More often than not, it isn't. Procurement personnel at all levels often receive emails or calls from companies trying to get on their company's vendor list. And usually, there is little they can do for them.
In many companies, procurement may process a new vendor request, but they rarely initiate it. And when they do, it is often to formalize a commitment an end user has already made. Sometimes the first they hear of a new vendor is the unpaid invoice with no matching order.
They may not know registration process exists
Whether reacting to an economic downturn, or simply for process efficiency, most big companies are looking to remove vendors, not add them. Even when they are, they may put them through a prolonged pre-qualification and audit process. They may offer a self-registration process through a third-party or maintain an in-house website. Or - even worse in some ways - the company may offer no guidance at all on how to become prequalified, registered, or accepted.
Sadly, self-registration processes are often decoupled from the actual selection process. The person making a selection decision may not be required to choose a registered supplier or even investigate the database. They may not even know the registration process exists.
There are further challenges if you are offering a product or service that competes with something the company buys from someone else. Inertia is your enemy here. Faced with the many pressures of an operating site or a project, an end user is rationally going to stick with the familiar. To win business from an incumbent, you really have to get the end user's attention.
So what to do?
1. Get in early
On a project, for example, preferred bidder decisions can be made a year or more before tenders go out. Get familiar with how your target's project and procurement pipeline operates, so you can make contact at the right point in the cycle.
2. Follow the process
Even if a company's vendor registration process is time-consuming (or frankly broken), it is still often a requirement before a new vendor can be added. Make sure you go through any compliance hoops the company requires, even if it seems pointless. It is easy for an end-user or a gatekeeper to dismiss an application if not all the boxes are checked.
3. Team up
If you offer a product or service that complements the offering of an incumbent vendor (and where there is no suggestion of restraint of trade), consider collaborating with them. Use the existing relationship or an existing project to showcase your solution.
4. Look professional
Many large companies are wary of dealing with smaller businesses. They see them as high maintenance, working to different priorities, and carrying greater risk. So even if you are a sole proprietor, don't look like one. Be truthful about your size and capability, of course, but look corporate. Have a good website. Have business cards. Have client testimonials and referees. Connect yourself to an industry group or association. Get accreditation or certification if it exists in your field. Be visible at conferences and industry forums. Publish.
5. Understand who is really making the vendor selection decisions
Hint: it's not anyone in the C-suite. End-users don't change vendors on an impulse. When they do, it is because they have a problem or opportunity they don't think their existing vendors can help them with, or they have reached an intolerable level of frustration with their current vendor.
Get to know the people who are facing the problems and generating opportunities. Understand their needs. Find ways to help them. Look for ways to give them access to your products and services in a low-cost/low-risk way.
6. Help your end-user get their idea approved
Let's say you run a pilot. It goes well, the end-user is happy, they want to go further. Very likely they will now need to make a business case and go through a change management and approval process to start using a new product or service. Help them make their business case. Give them data and analysis. Build the presentation for them. Show how your offering will solve their problem or reduce costs to the business.
7. Maintain the relationship
Now you are on board as a vendor, you need to maintain that position. Give them reasons to keep you, and not reasons for them to start looking for someone else. Be responsive, be patient, do your paperwork well, make sure your people on the ground are happy and keeping the end-user happy, and keep looking for opportunities to add value.
ABOUT THE AUTHOR
Joanne Simpson is Director of Corvative Pty Ltd, a contract and commercial services consultancy based in Perth, Western Australia. She has 20+ years of procurement, contracts and commercial experience in major studies, projects and operations in the resources industry. She holds Masters Degrees in Business Administration from the University of Western Australia and in Construction Law from the University of Melbourne in Australia.
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