I have often wondered why and how companies buy things. With some Outside In Thinking, and some help from a university research team* we identified some of the answers.
The nature of company procurements depends somewhat on the nature of the purchase, whether it is transactional (for example paper clips) or complex (IT infrastructure), how large it is, how many people will be impacted by the implementation and the level of need in the user community. The research looked at complex procurements and found some common threads to consider.
- Know the motivations of those involved. The research found that a person’s preferences and motivations often have a strong influence on a company procurement. This bias is tempered somewhat by the culture, policies and procedures under which the company procurement process works, but personal bias does remain strong.
- Help them reach consensus. With on average 5.8 (but can be more than 10) people involved in a typical procurement, colleagues come to the table with different perspectives. Often it is hard for teams to reach agreement on the procurement goals – helping them to find consensus is identified as a key enabler of success in the research. Are you doing this?
- Help them see a clear reason to change. I call this the ‘business case for change‘ for the customer and it is about value in their terms. The principal benefit drivers found in the research included; improve efficiency, cost control, improvements to customer experience, improve company capability and ability to pursue revenue opportunities. Do you know why your customers buy from you?
Take some time out today to think about your business from the outside in, putting yourself into your customer’s world for a while. Do this exercise as a team and ask your customers about the reasons they really buy from you to validate your ideas.
*Sheffield Hallam University