The global COVID pandemic and subsequent supply chain issues have dramatically changed how SAMs (Strategic Account Managers) do their jobs. We in the SAM community and SAMA know this, as much has been discussed about how SAM’s lives have changed.
However, these same forces affected Procurement/Purchasing professionals too, which begs the question:
- How have procurements’ lives changed?
- How have procurements’ expectations of SAMs changed?
- What do SAMs and their companies need to do to adapt?
Find the answers to these probing questions and more by listening to the conversation between Harvey Dunham and Martyn Lewis, a leading expert on the Procurement/SAM dynamic. Their lively conversation will bring you up to speed on the current state of play from the procurement point of view and give you very practical suggestions on how to play and win by the new rules.
Listen to the podcast here
How Customers Buy… & Why They Don’t… With Martyn Lewis
Welcome to our show, Martyn. We appreciate your willingness to share your knowledge and your insights into the state of play between B2B strategic account managers and account managers and their procurement counterparts. I know this is going to be a great conversation, so let’s jump right into it.
I want to start because I saw your LinkedIn profile. You’ve focused most, if not all, of your career on how customers buy and why they don’t. How did you land on that?
Thank you. You are right. I’ve spent my career looking at sales. I had this pivot several years ago. Right from when I started in sales, I always enjoyed learning best practices. I always enjoyed learning new sales methodologies, new sales training programs, and sales tactics. I’m looking to see what the best practices were and try and incorporate that into my own and my team’s approaches.
I started my own company many years ago. Fortunately, one of my early clients is a CEO that had about twenty salespeople working for him. It was a small company that was stuck at about $25 million a year. He said, “I’ve got a great team. I know we’ve got a great strategy, but our customers aren’t signing up. They’re interested. They tell me great things, but they don’t sign up. Could you talk to some of our customers?” I said, “Yeah. I’d be happy to.”
As a third party, I was able to do that from a third-party perspective. I agreed with him that the strategy seemed bright. The solution he was taking to market seemed extremely powerful. His sales force did seem indeed to be very competent, so what was it? I talked to the customers and I got a different perspective of what was going on. I got the behind-the-scenes look at, “We’re selling. We’re bringing together what we think is a no-brainer offer to the market. What are customers thinking?” It was this revelation.
We were able to put together a picture of what a customer is doing and why they are not signing up. Why are they so interested in not signing up? We could find the barriers, and then we recast their strategy and selling approach. From that moment on, their sales took off. They had continued success, and they were acquired for nearly $1 billion a few years later.
That started us down a path of saying, “When you’re trying hard to sell something, it’s a great idea if you’ve got somebody engaged with you that’s trying hard to buy something. Why don’t we always look behind the scenes at how customers are buying and why they may not?” That started us down the road. We repeated the trick for a few years and then realized, “This works. This is something that we should focus on.” A couple of years ago, we took all of our research and made that the foundation of what we do.Don't waste your buyer’s time on one-hour PowerPoint presentations if only 10 minutes is relevant to them. Click To Tweet
I have this picture of procurement people and salespeople talking and there’s no communication taking place. There are a lot of words going back and forth, but the two sides are speaking a different language.
They’re almost generally looking through a keyhole at each other. There’s a whole amount of stuff that’s going on in each of their worlds that is not making it through that keyhole. You can get a very good view through a keyhole, but it’s only so much of the total picture.
This is clearly an inspiration to you, but we’ll fast forward to the last few years since COVID or the pandemic struck. It almost seems like this 52-card pickup where you take 52 cards and spray them all over the room. The game has changed. People had to pick up the cards, reorganize them, and reorganize themselves. From your perspective, have you ever seen this kind of disruption and change this much at one time?
I’ve been through a few of the cycles, but what you said is key. I’ve seen a lot of disruption happen, but at this time, what COVID did, and it did it in so many areas, is it accelerated changes and trends that were there anyway, plus caught this continuous change. It was unprecedented. It wasn’t like most economic recessions or shifts that come along where they come in slowly and you can predict them to an extent. COVID hit us so hard, unprecedented, and changed so many things. I got to agree that this is a very different time.
Going back to this conversation about looking through the keyhole, as SAMs are looking at their procurement counterparts and the procurement is looking, how does it look to you? You get a chance to see both sides. Generally speaking, what’s happened to the sales folks and what’s happened to the procurement folks?
We’re doing what we do for a living, which is finding out how customers buy. All the time, I’ve got a research team talking to customers across the world in different industries about how they buy particular offerings for our clients. When COVID hit, we continued to do our work. We were picking up a theme of, “What’s changed? How are you now buying?” We did a whole series of research in the first six to nine months of COVID on what has changed in how you buy and what you expect from a salesperson that’s different. We picked up on some very interesting trends. The big thing is there are no face-to-face meetings and those kinds of things.
There was one thing above all else that people said they want from their salespeople, and this is framed in terms of we live in this world where so much is virtual that we rely on virtual ways of communication. We’re using the internet for so many things as we were anyway. What do you want from a salesperson above all else given? What’s changed? That was the kind of question that was in the research we were doing in part. The answer fascinates me because the number one thing above all else that came out across the industry to the salespeople was, “Please don’t waste my time. I don’t want you coming and doing a one-hour presentation and PowerPoint where only ten minutes is relevant to me.” That was the number one thing. What intrigues me about that is what the heck has that got to do with COVID?
Before COVID, were they welcoming salespeople wasting their time? Were they welcoming big PowerPoints that had nothing to do with them? They weren’t. They were tolerating them. They were tolerating them because that’s what they had always done. That’s what sadly they expected salespeople to do. COVID comes along and one of the things it did is make everybody conscious of that time, which is interesting. Without a doubt, something happened that people don’t want long Zoom meetings. One of the things that we’ve noticed is people said that time is more important to them, which is interesting again. That’s where put the focus on. The number one thing they said is, “Don’t waste my time.”
From that, we can extrapolate a lot of knowledge that no longer can SAMs turn up unprepared. In fact, we heard that time and time again. They were like, “I expect salespeople to be prepared. When I meet with my account manager, I expect them to have done the research on me and my company and what’s happening in my industry as I will have done on them and their company.” That was the number one message we got. People certainly said, “I still value having an account manager who is there for me and that understands me, my company, my industry, and my needs.” Without a doubt, these folks said they still value a salesperson, but this is what they want from them.
That’s interesting. Do you have any perspective going the other direction of what you see or what you’re hearing from your procurement counterparts? Have the expectations changed from the procurement people? They still need to do their research and all those kinds of things.
Yes. We come back to the point that procurement is only part of the buying journey. When we look at a buying journey, we look at everything that goes on across the organization. From the very first time they get an idea that maybe we should be doing something in manufacturing to do whatever, somewhere, there is an acorn planted. We then trace what happens throughout the entire organization, not just when they buy, but when they then utilize the product.
One of the interesting things about a buying journey and what I described is that rarely do people focus on buying. That is not the end game. We can talk about that because to a lot of sales folk, the end game is getting the order. To the customer or the buyer, that’s almost inconsequential in their journey. It’s something they do in order to get to where they want to go, which is the adoption of that product offering and the benefit it gives to them.
Across the whole buying journey, we see many things happening, and we can talk more about that later. We zoom in on procurement and the role of procurement. Without a doubt, what we’re seeing there is procurement is becoming more informed. They do not meet with a strategic account manager until they have done an awful lot of homework. Sadly, in most cases, we see the procurement person far more knowledgeable about the salesperson than we see the other way around.
In that particular element, I’ve seen research pointing to this before to something around the fact that maybe the procurement people have been studying for six months prior to that meeting. They’re thinking about what the company needs, who the particular suppliers are, and doing their homework. Whereas the SAM, hopefully, before he gets in his car to drive over and meet with the customer, they’re starting much later in the cycle and not going in anywhere near the depth.The only reason a buyer would give you money is that they are going to benefit from what they're getting from you. Click To Tweet
You’re so right. Procurement people specialize in procuring all day long. That is one part of the buying journey. The SAM is hopefully looking at many other aspects of the buying journey. The transaction of selling and buying is not quite in focus. I’ll give you a statistic that we found a few years ago. The average procurement person gets seventeen times more training than the average salesperson. Let’s blow away a myth here. Procurement signs the check, so they have the money. From a SAM perspective, that’s what you’re after, so they feel like they’re the gatekeepers.
The SAM, in some ways, takes on, “I need to service appeal to the procurement person because they are the people that are going to give me the money.” You’re beholden to them. Let’s blow that away. It’s the other way around. The only reason they would give you money is that they are going to benefit from what they’re getting from you. When we look at the equation, who’s giving who the gift? It’s not the procurement person paying the dollar. It’s a salesperson giving you something that’s going to create $2 for you.
In fact, the age-old equation of the procurement person having the purse string is a myth. It’s the other way around. The SAM should walk in knowing that they’ve got the value. I don’t want to put them into a position of being arrogant. That’s not going to work, but we’ve got to walk in there knowing that if we’re asking for $1 million, we’re going to give that company $1.6 million back in the first eighteen months or whatever it is. If we can’t walk in with that mindset, something is wrong. Unfortunately, we look at that $1 million that beholden the purchasing and procurement people. It should be the other way around.
From a procurement perspective, we talked to SAMs and remind them about this all the time, but it seems from time to time, their minds get closed. More and more of these decisions are being made in a committee.
Let’s expand our focus for a moment to the whole buying journey. I’ll give you another statistic here. If you track the buying journey, you find a number of things. First of all, a buying journey is usually a journey of education or learning that the entire buying organization as they go through their buying journey are educating themselves. They’re finding out more about the alternatives. They’re finding out what options they’ve got available. They’re finding out how this is going to work for them. They’re finding out some of the knits in terms of what they’ll have to handle. They’re learning as they go through that buying journey, which means things are changing.
The second thing you’re going to see is the very large number of players that get involved. It’s like a dynamic network of individuals that come and go into that buying journey that can have quite a significant impact. Even somebody who is maybe low in the organization, if you look at it hierarchically, can massively upset the buying journey with some knowledge, hesitancy, or whatever it may be. You do get this dynamic network of people.
The day of the decision-maker is gone. It’s not that I wouldn’t say, “Turn down a meeting with the CEO,” but the idea of calling high and finding the decision-making comes from the ‘80s. That is not the way buying journeys work now. The buying journeys move through this dynamic network of individuals that come in and go out. You can anticipate that. You can anticipate what’s going to happen, the roles that are going to get involved, and what they’re going to bring to the agenda. We’ll talk more about that if you like.
Overall, when all of the buying journeys happen, the average SAM is only involved in less than 10% of the activities across the entire buying journey. They tend to be involved with the procurement folk and some obvious key players. With all the things that go on in that buying journey that influence what happens, and I believe a SAM could bring value because they’ve seen other organizations go through some of the buying journeys, they’re not invited to the party. They’re not there. SAMs are involved in less than 10% of the buying journey, which is a tremendous opportunity.
Is this because they’re not curious enough or inquisitive enough, or is it because procurement won’t give them that information and likes to keep them in the dark?
Both. Let’s hit that second one first for procurement. Procurement and a strategic account manager fit together like this. The strategic account managers are protective of who from their organization gets involved with their account. Procurement is the very same way. They’re protective of who’s going to get involved with the strategic account manager. They also want to be the keeper of the key. They don’t want strategic combinations running around the organization and doing whatever they should be doing. They want to lock that down. I understand that. Our role as strategic account managers is to unlock that.
First of all, they’re not controlling our competitors. Our competitors are not doing business with them. Our competitors are not locked into procurements. Our competitors are running around all over their organization. The first thing we can say to procurement is, “If you can stop all my competitors talking to everybody else in the organization, I won’t talk to anyone else in the organization.”
The second thing we can do is tell them, “I would like to go in and meet with other people. I will always let you know where I am, who I’m talking to, and what the conversation was.” You coordinate with them. I’ve had a lot of success with that strategy by saying, “I’m not going to be running amok. I will tell you who I’m meeting with and what the agenda is. You can come to the meeting,” etc. They still may not like that, but we’ve got to break out of that. We’ve got to do everything we can to break out of the bounds of procurement.
The second part of it is when we do that, why aren’t we invited to the party? We can break this game, but the sad truth is that the folk doesn’t think the salespeople can bring value to all of those things that go on in the buying journey. For instance, maybe I’m one of the buyers. I’m thinking, “How am I going to use this? How am I going to train people? How are we going to integrate this with what we do? How am I going to get infection control onsite?”
As the buyer, these are the things I’m thinking about. I’m thinking, “What are the implications of me adopting this? Who else do I need to get onsite? How do I put my business case together?” The sad thing is they don’t turn to the SAM as a resource at that time. That’s sad because as a SAM, you’ve seen other people do that. You should have that information. You’ve got to be overt in helping your buyer buy. Sometimes, that can feel like you’re putting up hurdles in your own way.If you can predict it, you can manage it. Click To Tweet
When you’re talking to a key player and saying, “We’re going to have to get infection control or HR on-site,” you should be thinking about an implementation plan. There are these issues for people who are going to need training, and that can sometimes put people off and the union may get involved. It sounds like you’re bringing up your own hurdles, but in fact, what you’re doing is you’re helping your buyer buy because all of those things aren’t going to happen. You can bring them up right at the start. Early in your conversation, you say, “As you consider our solution, these are the things you’re going to have to think through. Here are the people you’re going to get on site. Here is how I and my organization can help you.” You’re proactively dealing with those issues and you’re showing how you can bring value to the buying journey.
We’ve only had a chance to meet once before. I remember something you said, and it stuck with me. It’s that many of these buyers are buying a given product or solution for the first time. Could you dig into that first a little bit? That was a shocker for me.
That’s exactly right. You’re offering them whatever product or service that you’re offering that they may have never bought before. In many cases, that’s what SAMs are doing. They’re bringing innovation, novel, and new creative solutions to the table. That’s what they should do. That’s great, but the company has never done this before. They’re going to get lost in the buying journey because as they try and do this. They’re going to get lost in those issues.
We’ve had such trivial examples that blossom into huge issues. We’re working with an organization that had these wonderful anti-bacterial clothes for healthcare workers. They were scrubs that were anti-microbial. If liquid touched them, the liquid would be repelled. It was fantastic. We would look at this as a no-brainer, but the union is like, “Our healthcare workers in the union can buy any scrubs. Some of them like to buy scrubs with Donald Duck on them. You’re now telling them they have to buy these scrubs?” We’re like, “No, we’re trying to protect them.”
The union gets involved and the union has got some anxieties. Then, you’ve got all sorts of other issues to deal with when you know that’s going to happen. You’ve seen this happen. You’ve seen, in this case, hospital after hospital do this. You bring it up first. You tell your buyer, “We’ve got to work with the union. We’ve got to show the union why this is beneficial for their workers and that we aren’t trying to restrict that choice. We’re trying to protect them in terms of their hostile work environment.”
Your customer may be going through this buying journey for the very first time. It’s a voyage of discovery one can get lost in and one that will often end in indecision because they hit a wall. They go, “This is too big of a mountain for us to climb right now. We’ll come back to it another time. We got too much else going on,” whereas you have seen this buying journey so many times.
One of the things we found out, which was a revelation for me, is buyers buy in remarkably similar ways. That’s how we define a market. We define a market as people who will buy a particular product or service in a similar way. You can predict those things. You can say, “The union’s going to get involved. Infection control is going to get involved. This is what procurement’s going to worry about. This is where they’re going to stumble when they think about implementation. This is how they’re going to get hung up around training people.” Whatever it is, you can predict it. If you can predict it, you can manage it.
If I’m a SAM and you’re the procurement person, could I say, “Can I start with a simple question? Have you ever bought a product or a service like my company was offering before?” Do you have any experience with this?
Is that a good question to start with?
You’re trying to understand what they know, and then if they don’t know, you should be in a good position to say, “Could we start by having a little conversation about what we see works best?” I’m not saying this generally. This is what we see with the different customers that we work with.
We have seen that be very successful. We map out buying journeys. We’ll look for our customers. We’re like, “What is the buying journey that somebody is going to go through?” We’ve had our customers go to their customers and share that. They say, “We know that you’re buying this for the first time. Here’s the map. Here’s what we see as what has to happen through your buying journey. These are the people that need to be involved. These are the concerns that they’re going to have.”
You have to think through implementation. You have to think through the implications. We’re not just helping you buy. We’re helping you use and gain the benefit of whatever it is we’re bringing to the table. We’re giving you the map and showing the value we can bring by showing you, “Here are the players that need to be on site. Here’s what each of them is going to be concerned about. Here’s how we can manage those concerns. Here’s what you need to do to bring this together. Here are the people that need to be involved and the decisions that need to be made so we can bring to the table the best practice buying journey.”You have to think through implementation and the implications. You're not just helping customers buy. You are helping them use and benefit from whatever you bring to the table. Click To Tweet
If we’re given a company and they’re in a pretty defined business, and they make a product or a service, it shouldn’t be that difficult for them to figure out how, on average, this is how it goes. How many do it?
I’m going to say it’s both self-serving. We’ve never found a company that has been able to accurately manage its bias but accurately maps its bias buying journey. Part of it is because you’re looking through the keyhole. You have this view of the simplicity of what it is you’re offering and how it brings great value. It’s so differentiated. Unfortunately, it’s that myopic view when we map buying journeys for companies. We put it on the wall and they see it and go, “What you’ve presented is what we knew, but we’ve never seen it like this before. It makes so much sense now that we see it.”
I’m not going to say that you can’t map it. In fact, I believe you should start with trying to think through everything that goes on with one of your prospects or customers when they’re buying your products or service. You should, but you’ve got to be awfully eyes-wide-open and knowledgeable about your customers to map it. Start by asking. Start by asking the customers who have successfully bought and used your product or service. Ask them what they go through. You say, “Take me way back. Tell me everybody that got involved and what were the decisions you had to make.” Get them to share that with you, and listen carefully. I’m a big believer that the starting point is mapping out and understanding that buying journey from start to end.
I’m thinking about this and thinking about my own career. Who in the supplier’s organization should have that skill and ability to be able to do it? The SAM has a piece of the puzzle, but from their role and what they have to do on a day-to-day basis, they don’t have all the tools that they need, like the analytical tools, questioning tools, or maybe even the ability to understand the companies and their customer strategy.
I’ll tell you the sad thing here. This is gold for a number of reasons. This is across the board, so I’m not picking on anybody here. We work with organizations. The higher up in the organization we go or the further into the organization away from the salesforce we go, the selling job gets easier and quicker. The more myopic the view.
I don’t want to get too flamed here, but at the executive level of the company, they think the selling approach is so simple. They think that their product or offering is so differentiated and brings so much value that, if you could talk to the CEO, their eyes would light up. They’ll put you in touch with the right person and they buy it in a couple of months. Why does it take us nine months?
When I meet with customers, their eyes light up in twenty minutes. When they’re like, “Show them the ROI. Tell them about this,” that is so misinformed, and yet, we see it time and time again. The further away from the salesforce or the higher you go in the organization, the more simplistic the equation becomes due to what I think is the number one evil. These people love the product they’re offering so much that they can’t believe that people wouldn’t see the value. They’re like, “Only a fool wouldn’t buy.” That’s good because who would want the leadership of an organization to say, “We’re much the same as everybody else.” It’s ho-hum. You want people to believe in the product, but that’s what gets in the way.
Your question sparked up in me that when you ask people inside the organization or at a higher level, they see such a myopic view. They’re like, “Go talk to the CEO. Show them the ROI. Only a fool wouldn’t buy.” That’s their view of the world, which is so wrong. It is a challenge to understand all that goes on and accept what is going to happen. They are going to worry about, “How do we train everybody? That means we’re going to have to change our work processes. We’re going to have to press the green button instead of the blue button,” or whatever it may be. They could be like, “We’re going to have to ask people to log into this software.”
The list goes on and on of things that are seemingly trivial that organizations stop and say, “That’s too much for us to bite off at the moment.” The indecision stops the buying journey again. It is a challenge for an organization to understand and accept what goes on across the buying journey, but it’s amazing when you do it. When you map it and see what goes on, it suddenly explains why your pipeline isn’t working. It suddenly explains why so much percentage of forecast opportunities don’t close ever. It explains it because you can see it.
I can almost predict where the weak spot is and where it’s going to fray and split
You can and you must. That is the exact opportunity we’re faced with. We can tell where that indecision is going to happen. We can tell who is going to get involved. We can blow away this idea of our champion. We’re like, “A champion has got to align a few people and has got to do some stuff. We should have the order next month.” It’s a colossal mountain to climb they’re going to go and do, and we should be able to help them.
The safe bet is always no decision. That is from the procurer’s perspective.
We’ve mapped the half-life of a great idea. As a SAM, you bring into the organization, to your champion, or whoever it is a truly good idea. Whoever it is you’re talking to is going to say, “Thank you for that. You understand our business. I like your proposal. We’re going to run with this.” That’s how it starts. You’ve got enthusiasm. Two days later, what happens? Two days later, that person who was so enthusiastic gets hit with an organizational change and their enthusiasm wanes. They go back to it and go, “That’s a great idea, but it would mean I have to get this person on site,” or, “Didn’t we look at this two years ago and it didn’t work?” Their enthusiasm wanes.
What we see in about 6 to 10 business days is the enthusiasm that was there that was genuine goes right the way down and you’ve reached the half-life where you’re not even getting to no decision. You’re going down and it’s no longer a priority. The urgency of the day takes over. If you can escape that, you’re right. They’ll start running with it, but then, it hits that no decision. They’re like, “We can leave this for now. It’s not life and death. We’ll come back to it in the future. It’s too big of a match for the client.” That’s no decision. You can predict it and mitigate it in most cases. You can either mitigate it or say, “I can’t mitigate this one. I’m running from it. I’m going to put my energy somewhere else.”All of the disruptions only spell opportunity for SAMs. It may spell work and change, but it spells opportunity. Click To Tweet
That’s fascinating. That’s great advice. It makes so much sense to me because we’ve asked both parts of it. I ask SAMs all the time every time I get the chance, “Who’s your toughest customer, external customer, or internal customer?” 100% of the time, it is internal. The SAM is running into the same problem within their own company and then they run into the customer. In essence, they run into the same manifestation. It’s a different perspective, but it’s the same thing. I used to say, “I’m trying to find a person who can say, “Yes.” This is my job. It’s easy to find people that will say, “No,” or, “I don’t think so.”
If we’re going to change the ranks, it’s going to be, “Go find the people that can say no and manage the situation.”
You have to constructively confront.
There is another little nugget there. When we map the buying journey, you do find multiple players that can say no. You find multiple reasons that can end in no or no decision. There it is, you’ve mapped it. You’ve got that on the wall metaphorically or literally. You’ve got it on the wall and you can see all these issues and points of no decisions. What do you do? You get one and hope that this is the one that won’t go through that maze. You’re hoping that your champion has got the internal power and motivation to run this over the finish line without getting trapped in all of that. You are betting on an outlier. This is the issue. It may happen. It will happen 1 in 10, 20, or 50 times that you’re going to get that.
To bet on that every time, that is why you got a problem. You are betting on the outlier. Come back, look at what usually happens, and tackle that. Don’t get caught up with the optimism of trying to think it’s an outlier. It may be. Enjoy it if it is, but plan on it not being an outlier. Even though my champion is telling me, “Leave this with me. This is what’s likely to happen,” I go manage it and mitigate it.
What was the old adage? Is it plan for the worst and hope for the best?
That makes sense.
If it sounds like a lot of work, it is. This is what’s fun about being a SAM. You’re making things happen that otherwise would not happen without you. You are making this happen.
The thing that I can see where SAMs, SAM companies, and SAM programs have got multiple SAMs calling on similar types of customers, you probably need several customers to go in and understand to put this composite journey together and have it be complete.
That’s what we do for our clients. We help them map out that journey, and then we have the map so that every SAM has a map of the buying journey. It’s not a sales process. The sales process is so ‘80s and ‘90s. You can’t drag a customer through your sales process. That isn’t going to happen. You’re going to push them through that buying journey. You can no longer drag an account through your sales process. You are supporting them, driving them, and pushing them through that buying journey.
At the end of the day, what do we provide SAMs? We provide them with what we call a buying journey navigator. We’re like, “Here is how you can tell where somebody is in the buying journey. You can tell if they’re on a buying journey and where they are in that buying journey. You can see the things that they’re thinking about. Here are the key players that are getting involved. Here is what they’re worried about. Here is what they value, and here is what you should be doing to marshal all of that and utilize the resources of your organization to move the customer positively through the steps of their buying journey.”
That’s interesting. That’s something. We’ve talked about COVID and working virtually. There are all those challenges, but then this little global supply chain issue has popped up on top of it. It would be useful, first of all, to get a perspective. From a procurement perspective, how are they related to the global supply chain folks, and what’s going on there? Somebody told me that the strategy over the years has been a global supply chain. Create a global supply chain, reduce your costs, and make lots of money. That formula worked for a long time, but it seems to have a bit of a crash.
Once again, we’ve seen things break in an unprecedented or not forecasted way. The impact this has because we have optimized so much on the supply chain is things have broken. The first would be you have alternative suppliers. We were working with a large disk drive manufacturer years ago. One of the interesting things was that they sell millions of disk drives. Somebody like Dell would never buy a disk drive they could only buy from one supplier, which is interesting. If there was anything unique about your disk drive, they would not buy it because they never wanted to be beholden to one supplier for a part that was so significant for their product.Companies with the best selling approaches are those that sell the same product as the guy next door but have managed to differentiate themselves. Click To Tweet
The idea is that if one supply can’t supply, another one can, but the global supply chain has even broken that. Your plan A, plan B, and plan C have all gone. You can’t get chips anywhere or whatever it may be, or there aren’t the containers to move stuff from wherever. We have seen the results of something that was so optimized break. That has caused this whole massive disruption and rethinking about chains. What we’re hearing and seeing is that people are going to look back again like, “We need to know plan A and plan B. We can’t be beholden to not just one supplier. We can’t be beholden to any one single part of the whole equation. We need backups all the way through.”
Vertical Integration is a topic that’s way back. Vertical integration and domestic supply are big topics that people are looking at solve some, but not all problems. Certainly, the key is procurement is thinking differently here than what they have for many years. They are looking at, “How can we have suppliers and supply chains that we are not singularly beholden to?” They’re also looking at their supplier’s suppliers.
It’s a big domino situation. When one part falls, the rest of it ripples right down the rest of the chain.
The other thing is you’re not looking at just the input. You’re looking at the output. If you manufacture a product, where is it going? Can you get it to where it’s going? Everybody is generally somewhere in the supply chain, so you’re not looking down. You’re looking up as well.
That’s interesting. This happened not long ago. I saw an article in Fortune where they were putting forth the proposition that the CEO of a customer should be talking to their key suppliers. I looked at that and said, “I don’t believe I’ve ever seen that written down anywhere in the last 40-ish years that I’ve been paying attention.”
The word that’s massively overused is ecosystems. People talk about ecosystems. Without a doubt, we’ve crawled into a world where we are beholden to our ecosystem. Our ecosystem is our suppliers, customers, partners, and all those organizations that which we couldn’t do business. Here’s another opportunity as you can probably tell. All of this disruption change only spells an opportunity for SAMs. It may spell work and change, but it spells opportunity. Something that SAMs should look into is being part of the ecosystem, mapping executives to executives, and making sure that they’re recognized as an influential and strategic partners in the ecosystem for that company. A lot of SAMs do represent that. Their companies are part of the ecosystem of that customer.
This is something that I learned coming to SAMA and looking at lots of different industries. It seems that some of the SAMs who are the best at selling and the best at understanding their customers are making the most, dare I say, mundane products. They’re relatively simple products, but because the product is simple, perhaps it gives them more clarity into what the problems are within the customer and how to solve those problems with the customer. It’s interesting to me. A ball bearing is a great example. For every ball bearing of a given size, there are multiple manufacturers of it. It has to be the same diameter. It has to fit in the same hole. It has to have a lot of the same characteristics, and yet, I know they’re not all the same.
You’re touching all my hotspots. You’re going to one after another here. You’re lighting me up again and again. My background was high-tech. I came out of selling high-tech. I thought high-tech salespeople were in the top quadrant. We’re the best. We’re paid a lot of money by selling the whole technology. I worked for some technology companies. As I started my own company and I started working with an array of companies, I got a real shock. You’ve described it. I got a real shock that technology salespeople are not in the top quadrant. Without a doubt, the top quadrant is the SAMs that come from people who sell what you would think is a commodity product. They’re selling the very same thing as the guy next door. This intrigued me.
When I was asked, and still when I’m asked, “What are the best-selling approaches you’ve ever seen? Who’s got the best salesforce?” All the time, at the top of my list are companies that sell the same product as the guy next door, but the ones that have managed to differentiate themselves. It’s an interesting thing. Although the same product can be bought from multiple suppliers, one of those suppliers invariably is going to differentiate itself. They are not going to differentiate themselves with the product or the price. In fact, the price is going to be higher. They’re going to get a premium. They’re going to differentiate themselves on how they sell. They’re going to differentiate themselves on the knowledge they have of their customers and how they translate that knowledge into value for the customer.
I’ll give you a simple example. It’s tough to take one example, but this is one. We worked with a company that sells commercial pumps. They sell the water pumps and the pumps that go on to building sites to pump stuff around. They usually are not building one residence. They’re building subdivisions and shopping malls and they are delivering that. They’re selling the very same pump as multiple other distributors in the area, so how come they’re getting 20% more? How come people love going to work with them? How come people buy from them time and time again?
They didn’t even know what they were doing, but they were still differentiating themselves. Here’s what they were doing. Their salespeople would go out to the building sites, meet with the project managers, and work out, “Where are you putting the pumps?” Others would do that, but then, they would use that knowledge that when a pump was being delivered on a Thursday, they would call the right manager on a Tuesday. They’ll say, “We’re bringing that pump out to you on Thursday. I want to confirm if you want that at gate six. Is 10:00 AM good for you?” The buyer is like, “Yeah.” Then, they’re like, “We know you’re integrating that into that, so how about we put these flanges on the truck and get this power outlet? You’re probably going to need those. Unless you’ve got it, should I put it on the truck?” The buyer is like, “Sure. Please do.”
When we talked to the customers, they said, “We love those guys because other guys that deliver pump, we can’t find it. We’re delayed for a day or two while we’re trying to find it. They deliver it to the shipping dock rather than gate six. When it came, we didn’t have the flange to where we needed to connect it. We’ll buy from them because they save us time. We get what we want. We get it where we want.” That’s it. That’s what they were doing. They were doing it consistently time and time again.
Their sales guys were out on the building sites, working at where those pumps were required, what flanges were required, and where to deliver the pump. It translates into clear value for the customer. I love these stories, and I’ve seen them time and time again. You are so right. The people who are selling the same product as the guy next door are SAMs working on how to differentiate not on the product or the price, but on what is important to the customer.
It’s incredible. I feel like we could talk for hours about this. I enjoy this.It's more important to sell and market to why people do not buy than why they do buy. Click To Tweet
This is my life.
It’s been my life too. You’ve managed to infiltrate both camps, but I’ve always been in one camp looking in the other direction.
We’ve talked to 5,000 buyers about how they buy and why they don’t. The name of the book is How Customers Buy… & Why They Don’t. Why They Don’t is in red because that’s the trick. Not to get off on another keynote, but we have found in that world that it’s more important to sell and market to why people do not buy than why they do buy. We shine up our value propositions, and we get all concerned about our value propositions. They wouldn’t even be talking to you if they didn’t think you could deliver the value, so we’re only reinforcing what they already know. The thing we should be targeting is why they don’t buy. Why were they interested in what we bring and then stopped within the decision or the things slowed down? That’s what we should be selling and marketing to, which is why they don’t buy.
It makes sense. I get the opportunity to talk to different SAMs in different industries all the time. We’ve got this global supply chain issue and pandemic, but we’ll figure that all out too. If we don’t won’t matter. It will all get figured out, but will we ever go back to the way things were? Your fellow Canadian, Wayne Gretzky, said, “Where’s the puck going? I skate to where the puck is going.” If Gretzky’s the SAM chasing the puck, where’s that puck going to be?
That’s a great analogy. I love that quote of Gretzsky’s, which if you’ve seen the original line, was an off-the-cuff comment, but I go to where the puck’s going. It’s such an obvious thing, but such a mind-expanding concept. It’s hard to tell in some ways, but first of all, the world has changed. There is certainly human nature that’s not going to change, but we’re not going back to how things were. We’re going to continue to evolve.
One of the things that COVID did is it has hit us hard. It has accelerated changes that would’ve taken five to 10 years of happening too. You’ve seen this accelerated change and this continuous change as well. What we’re going to see is continued polarization. Where is the puck going? I’m going to use the term polarized. We’re going to see that if you are supplying something that other people can supply in the way you supply, you’re going to be squeezed into the commodity group. It’s going to come down to price, availability, terms, and things like that. That’s not all bad.
We can see companies like Costco or Walmart that have made a good business out of going to that quadrant, but that’s not the SAM quadrant because we can’t afford to have strategic account managers in that world. We’re going to replace it. If we haven’t already, we’re going to replace people with web interfaces. That’s going to happen.
I see this polarization where if procurement can commoditize you, you’re going to move that way. What are we going to have on the other end of the scale? We’ve already talked about it. This is going to become, in my mind, more and more stuck where you can differentiate and you can have that. Those are the things that we all strive to do. We’re like, “I’m going to be differential. I’m going to add value.” Value is another massively overused word. They’re like, “I’m adding value.” I’m like, “Please tell me what value. How do I quantify that in ways that matter to me?”
I’ll go back to my pump. They knew that the distributor was going to deliver the pump to the right spot at the right time with the right fittings. To them, the value of that was the building didn’t stop. They knew that if that wasn’t the case, they could have people sitting around doing nothing for a day while they were trying to find that pump. It could also be they’re adjusting all schedules and getting behind while they’re trying to find the flange. That’s value. The SAMs got to put that time on that differentiated value.
Even though procurement is going to beat you up on price, because that’s what they do, what they’re trained to do, what they love to do, and that’s the power they have over us, they’re going to beat you up on the price in trying to make you feel like you’re a supplier of a commoditized product. That is not the corner you go to. Where the puck is going is it’s going to be the value.
I believe you’re going to see procurement working with SAMs on that. If you haven’t seen it already, I believe that’s where the puck’s going. Procurement will work with SAMs on saying, “Let’s define the business value. Let’s define what that worth is for us.” We’re going to look at that, and if indeed it’s there, procurement is going to be the first person to be onsite and buy from you. Differentiating value is where it’s going. You’re going to see procurement way more proactive in working with SAMs in terms of defining what the value is that they bring to that company.
That’s interesting and fascinating. It makes a lot of sense to me. I’m sure you’ve seen it where there’s a vendor-preferred supplier, solution provider, or trusted advisor. I’m hearing that may, more or less, come into two quadrants. You’re either going to be a vendor or a trusted advisor, and there’s not a lot in between.
It’s defined by the buyer, not the seller. You may wish to be a trusted advisor, but the only person that will anoint you is the buyer.
SAMs, if you want to know where you stand in the eyes of the customer, ask the customer. They’ll tell you, “This is how we see you.” Thank you so much for your time, your insight, knowledge, and experience of 40 years, and the incredible work that you’re doing. I’m sure that your customers are benefiting from what you’re doing for them. Thanks for sharing.
I hope so. I hope we’re the trusted advisor. We’ve trained 85,000 salespeople around the world, so I’ve had the luxury of working with so many salespeople across so many industries across the world. You can’t help but pick up some good stuff.
I can’t wait. I hope we have another opportunity to talk at some point in time.
I look forward to it.
Thank you for everything you do for the SAMA community, and thanks for sharing all your knowledge and wisdom with us.
It’s a true pleasure. I’m always wanting to help and talk to you.