Sellers Look Out: It’s Open Season On Sacred Cows!

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In the relentless march of procurement, it is open season on so called ‘sacred cows’. So, if your relationship with a key account depends on tradition, a personal relationship, or the old fashioned approach to buying, watch out! It is time to ensure the indisputable commercial logic is in place!

What if the only thing between you and competitive tendering, supplier consolidation and a host of other procurement led changes is a couple of sacred cows! That is a set of beliefs, customs and traditions governing purchasing decisions and supplier selection that, in the minds of the procurement professional, are both out-dated and unjustifiable.

Why It Is Open Season On Sacred Cows

At last Spring’s procurement conference I was delighted – I had won a cow! It was a milk chocolate cow approximately 4 cm tall, but with a deeper significance. It was to signify ‘sacred cows’ – those reasons that managers put in the way of procurement getting involved in controlling new areas of spend.

Every procurement executive at the procurement round table event that identified a sacred cow got a chocolate reward. Pretty soon everybody had a chocolate cow in their hands and a smile on their face!

The sacred cow exercise was a clever way of approaching a serious topic – how to cover the internal obstacles put in the way of procurement doing its job and more specifically of extending its reach into new areas. If the sacred cow can be slaughtered procurement can get involved and do what it normally does:

– Set targets for cost reduction

– Put more rigour in place around buying

– Conduct re-evaluation of suppliers

– Introduce more competitive forms of tendering and so on.

That is all those things feared by sellers.

Is Procurement Eyeing-Up Your Area?

While there is a clear trend for procurement to be involved in the buying decisions in more and more areas, taking some areas under control can prove challenging.
Procurement’s reach is continually expanding, however in most organizations it is below the 50% mark. That means it only gets to control every second dollar spent. The problem is sacred cows!

Does your position in a key account depend on a sacred cow, or a rational justification?

A sacred cow is a figurative reference to sacred cows in some religions. A literal sacred cow or sacred bull is an actual cow or bull that is treated with sincere reverence. A figurative sacred cow is something else that is considered immune from question or criticism, especially unreasonably so.

Looking Out For Sacred Cows

The sacred cows on which the round-table focused related to marketing. In the minds of most attending that is a large and slippery area of spending and one that has held out for a long time against the involvement of procurement.

Yet the potential savings it offers are tantalizing – levels of up to 25% being achieved as a norm it was claimed. Such a prize is too much for procurement to resist and that means some sacred cows need to be slaughtered!

Are the sacred cows of your traditional manager-buyer being prepared for slaughter?

The objective of the procurement round-table was to identify the barriers to managing marketing spending and discuss how they are to be overcome. The act of calling them sacred cows was to immediately take from the validity of the objection to procurement’s involvement.

What Are The Sacred Cows For Your Buyer?

Here are some of marketing’s sacred cows as identified by the group, as you read the list you will find there are parallels in many other areas too:

‘It is not just about the lowest price…’
‘The cheapest does not end up cheapest in the long run…’
‘…need to understand the market and direction it is going…’
‘It is all about relationships…’
‘Procurement may believe some supplier prices are lower but when you compare like for like there is little difference…’
‘A 3% or 5% reduction in prices would quickly be eroded if production was held up by a late delivery, or a quality problem…’

‘You need to have specialist knowledge to buy it…’
‘It is a creative process…’
‘It is too risky…’
‘We sometimes don’t know what we want till we see it…’
‘You have to understand the industry…’

The rest of the ‘sacred cows’ are listed at the end of the post. The list went on and on, until pretty soon everybody in the group had won a chocolate cow.

Sacred Cows or Genuine Concerns?

It was all good fun and certainly my son enjoyed the chocolate when I brought it home. However, the speed and zeal with which the obstacles to procurement getting involved were laid to waste worried me. It was like watching martial arts supremo Jackie Chan laying waste to a army of bad guys.

The problem is that behind every sacred cow is a genuine concern (real or imagined) among a stakeholder – a manager or end user. Those concerns need to be listened too.

It may be a logical concern about risk, or economics, or it may be a more emotive reaction borne out of politics or ego. It maybe valid or it may not. Either way it needs to be listened to. Otherwise just as in the martial arts movies the obstacles keep getting up again even though they may have been kicked to the floor.

A Collaborative Approach Is Required

Clearly procurement is focused on the business rationale – the promised return. It is focused on the WHY. The need for professional procurement input – the business imperative for more procurement rigor However it is important that others understand this motive and the potential savings and other benefits. After all, why should procurement be seen as the ‘bad guy’?

Every so called sacred cow is an opportunity to engage, a reason to collaborate with stakeholders – just as a sales person would skillfully handle a customer objection by listening, probing and exploring.

If the belief is that bringing procurement to the table won’t work then that is a bad place from which to start. To engage with stakeholders in a positive way around ‘sacred cows’ means discussion ‘how can we make it work?’

Implications For Sellers

Suppliers need to recognize that the status quo in their key accounts is under continued threat – that is particularly the case where procurement’s role and sophistication is growing. They must ensure that their position within the account will survive the slaughter of any of the buyer’s sacred cows! Indeed, they themselves may be the sacred cow! Key to survival is the demonstration of competitive savings, clear competitive differentiation and a tangible track record of supplier performance.

Will your position in the key account survive the slaughter of the sacred cow?

Can you help to prepare those who traditionally have made the decision regarding the purchase of their solutions for the time when procurement will come knocking on their door?

Marketing’s Sacred Cows – The Full List

Here is the full list of the ‘sacred cows’ identified in the round table mentioned above – the reasons why procurement is told ‘hand off marketing’. There are – 26 obstacles in total that group of procurement executives feels it can and must quash:

‘It is not just about the lowest price…’
‘The cheapest does not end up cheapest in the long run…’
‘…need to understand the market and direction it is going…’
‘It is all about relationships…’
‘Procurement may believe some supplier prices are lower but when you compare like for like there is little difference…’
‘A 3% or 5% reduction in prices would quickly be eroded if production was held up by a late delivery, or a quality problem…’

‘You need to have specialist knowledge to buy it…’
‘It is a creative process…’
‘Innovation is key…’
‘We sometimes don’t know what we want till we see it…’
‘You have to understand the industry…’
‘It is about the agency’s portfolio – it’s mix of above and below the line, digital, mobile, etc.’

‘We have valuable long term supplier relationships…’
‘It is working fine at the moment…’
‘The devil you know is better than the devil you don’t…’
‘Our suppliers understand our requirements – they are flexible to our needs…’
‘Nobody knows our business – customers like they do…’
‘Having a local supplier has real advantages…’
‘They speak our language…’

‘We need people on side internally if it is going to work…’
‘Our business is different…’
‘Knowledge of what has and has not worked for us in the past is key…’
‘We have our own way of doing it that works well…’

‘We don’t have time to change…’
‘Changing supplier is too risky…’
‘We need the flexibility to be able to order at short notice…’