On the pages of Amazon, sales gets all the attention. How many books have been written about the sales process, the inner game, the cold call and the close? Sales is portrayed as exciting, sexy even, and well-paid to boot. In comparison, the procurement section of the bookstore is a mixture of dull sourcing textbooks and the usual paperbacks on negotiation tactics.
(If someone knows an exciting read about procurement, please share!)
But don’t ignore the sales gurus just because you are on the buying side of the transaction.
The Funnel Concept – Let’s Borrow From Sales
If the sales process is about taking leads through a funnel to become customers, then much of the same methodology can be applied to taking cost saving ideas through a similar process to become executed and validated savings.
First of all, to improve your procurement savings methodology you need a funnel. Not just a notional funnel in the back of your mind, or a collection of scribbles in a notepad. You need an actual funnel. Excel will do (although software vendors like Orpheus will sell you software to do this). Into this funnel pour all ideas that may lead to savings or other value for your organisation. These are your ‘leads’ in sales parlance.
Successful salespeople are constantly tweaking their funnel to improve two things:
- getting more leads into the funnel; and
- turning more leads into sales
Improving Your Procurement Savings Methodology by Tweaking Your Funnel
There are mountains of books about tactics and strategies to make your funnel a well-oiled selling machine. The recurring theme seems to be measure, measure, measure. My chosen top three measurements for us procurement folks are as follows:
1) Measure how ideas come into your funnel. All you need to do is have a column in your excel sheet that says how you came across the idea. For example:
- supplier interactions
- stakeholder interactions
- spend analysis
- market reports
- conversations with peers
- attending conferences
- hanging out in the SoftwareSpend group on LinkedIn
Then, simply prioritise the activities that lead to more leads.
2) Qualify your leads. Understand how likely and how quickly they may come to fruition, and rate them high, medium and low. Then work like crazy on those rated high. If you find yourself working on the lows, ask yourself if this is really a good use of your time, or whether you might be better finding new ideas to fill your funnel.
3) List the decision makers within your organisation for each lead. Knowing who makes the decisions and who influences those decisions is golden nugget information. Don’t list who the decision maker is on the official org chart; list who actually made the decision. Then, for those individuals who appear regularly, find out what drives them and how they are measured. Surround these individuals with useful, targeted information as often and as regularly as you can. Having the trust of these people will allow you to move leads down your funnel faster and more reliably.
Measuring your funnel in this way means that you are no longer acting on your intuition, you are acting on hard data, constantly tweaking your funnel to improve your software procurement savings methodology.
Image credit: “Jeep Cherokee Salesman” by CALI, Creative Commons, Flickr.com