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What's the Role of Intent Data as Procurement Flexes Muscle

Nov 19, 2020 | Author Ed Marsh

Tl;dr - Procurement teams have been emboldened by COVID driven changes. That adds more sales complexity to team buying situations. It's important to prepare, and in some cases intent data can help to divine what's happening that might disrupt your "done deal."

Challenger Research is a Wakeup Call for Sales

Challenger Research on Procurement in SalesBuyers are in the driver’s seat. The data was quite clear on this fact. Procurement might have been concerned with having a seat at the table pre-COVID; but now is their moment to shine. 

For example, look at the degree of control we observe in the purchasing process:
- Procurement is involved in ALL purchases in 30% of organizations,
- In the remaining organizations, the median purchase price above which procurement becomes involved is a VERY LOW $5,000. The use of new purchasing technologies makes it possible to control and monitor even small, one-time purchases.
- 54% of all purchasing happens through PRE-APPROVED vendors (pre-structured contracts or catalogs). This requires a two-step process for sellers: first, getting vendor approval, and second, influencing end-user purchase.
- 38% of new purchases REQUIRE an RFP or some other formal, competitive submission. Winning new business involves a high bar that sellers have to meet.

In normal times, much of procurement policy is aspirational and more a statement of what people would like to happen, rather than what necessarily happens. COVID, we believe, has both elevated the role of procurement and given them the opportunity to exert a due diligence pressure they have always wanted. The opportunity comes from a common mandate to reduce 2020 expenditures by an average of 25%. Reducing expenditures to this degree is a tall order. Challenger Research

Your Whole G2 Category

In other words, to the marketing manager who needs the specific capabilities of your software, and insights of your team, to hit his/her KPIs, you're one of a kind. But....

When the transaction is handed over to procurement for negotiation, you're just one of many, many, analogous providers.

As you've worked hard to create value and differentiate your product, your product marketing team has doubtless benchmarked against key competitors.

You may have identified key strengths and weaknesses.

That may all be irrelevant.

Understand the Game

Procurement people are doing a job. And it's an especially important job in a world where PLG (product led growth) has created a morass of overlapping personal preference software with evergreen subscriptions.

Part of the procurement playbook is to create an adversarial relationship. Kind of like cops that separate suspects to interview them and play them off against each other. They'll often stipulate a cessation of all communication with the champion, end users and department managers who will actually use and rely on a product.

According to a popular 1990s playbook:

  • They'll change conditions and terms at the last minute
  • Appear to be in a hurry, while they drag the process out
  • Often procurement leadership will specifically call on their team to "be prepared to indirectly and under pressure to bluff and lie" and "de-stabilize each supplier's people with many urgent meetings and many demands for information."

Want to learn more about where the playbook came from? Learn about the ethically challenged and celebrated father of modern procurement Jose Ignacio Lopez.and more here.

This type of purchasing behavior has ebbed and flowed in the general B2B and industrial worlds. And it looks like it's coming to martech now too. Many SaaS companies now have sharp contrasts between how they sell (automatic renewals, price accelerators, credit card payments, etc.) and how they buy (no subscription renewals, expectation of price cuts, extended payment terms.) Procurement has been growing their influence for a while.

More Members of the Complex Buying Team

Lopez coached his buying agents to "know your potential winning suppliers and their competitors inside and out before you began to negotiate and play first and second tier suppliers against each other."

In other words, as procurement becomes more involved in B2B and martech deals, they're likely to have carefully researched you and all of your likely competitors.

They'll know a lot about you.

How much will you know about them?

In most companies, the answer is "not much." Typical sales research and outreach focuses on the folks in the department that uses the product. Yet we know that the buying teams often include finance, procurement, IT and others.

What are each doing? Thinking? Influencing?

It's hard to know, but that's part of the power of contact level™ intent data. Because only when you have insights into the people, and the details of the actions they're taking, can you start to construct some theories of the group dynamic.

But, most companies filter their intent data for only roles and job descriptions that fit their typical users and traditional decision makers. That means they're likely missing out on key signal from more active procurement and purchasing teams.

It also means you're negotiating at a substantial disadvantage. Procurement knows far more about you than you know about them.

More Than When - Why & Who

Challenger says there are now 10.2 people on a typical B2B buying team.

Your sales motion probably seeks to identify many of them, as a best practice to surround the account.

But do you identify all? Legal? Procurement? Others?

Most companies answer "no."

So let's look at how intent data might be able to help.

Many companies think of data as a tool to identify which companies might be in market to purchase. That's a great use case. And honestly, with account level only data, that's probably about the best you can hope for.

With contact level intent, however, you might collect more insight and infer more of what's happening.

Here's how.

When you know WHO is taking action, and have granular insight into the action they're taking, you have vastly more valuable sales intelligence to incorporate into your analysis and tactical planning.

For instance, if you sell software to HR teams but you see IT folks engaging with your competitors as the deal races (you thought) toward a close, you'd likely want to coach your deal champion on what might be happening and how they could preempt it.

Similarly, if you see purchasing/procurement job titles taking action around other vendors or outcome related key terms, you'd have reason to be worried that they're setting up for a negotiation.

Or in the first example, if you've met with various director and manager folks in the HR department and hear that you're on track....but then see the CHRO taking action around TOFU sorts of key terms, you'd probably revisit some of your deal stage assumptions.

None of this is definitive or infallible. Of course....it's sales, right?

But in many cases it's vastly more than you have, and when woven into a full data stack tapestry, you are armed with insights to sell rather than just hope.

Don't Shrink From the Challenge

Procurement has an important job to do.

So do you.

Recognize what's changing.

If you're in marketing, create appropriate enablement content to help your prospects manage the internal process. If you're in sales, expect that purchasing will be involved and prepare.

And maybe, just maybe, dilligent use of contact level intent data can provide the edge you need.

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