Ray Collis

What Does Your Customer’s Industry Reveal About It’s Buying?

Decrease Font Size Increase Font Size Text Size Print This Page

Sellers know that buyers vary from industry to industry, but now research shows exactly which industries are the best and the worst at buying. The question is how can you use this information to help you sell.

Is buying dictated by industry

Most salespeople have developed an intuitive feeling that some industries are better at buying than others. But is there science to back it up and if so what are the implications for sellers?

If such research did exist would it allow you to predict how a customer, or prospect will buy based on its industry? Well, perhaps the answer is ‘yes’.

 

What Industries Have Excellent Buyers?

The 2011 edition of Roland Berger’s Purchasing Excellence Study, for example, shows how sophisticated different sectors are at buying. It classifies 13 key industry sectors to identify the excellent, the average and the bottom of the class. The results are as follows:

purchasing excellence by industry

So where are your prospects and customers to be found on this list? Are they at the top, or the bottom of the class?

 

What Is Purchasing Excellence?

The criteria used to classify industry sectors in terms of sophistication of buying provide an interesting and contemporary take on purchasing excellence.

The survey analyzes sectors in terms of 15 key purchasing trends along three dimensions:

  1. Strategy – procurement is a strategic partner with cross functional reach and impact
  2. Performance – there is a sophisticated approach to delivering value in partnership with suppliers and through a strategy of global sourcing
  3. Enabler – procurement is increasingly professionalized, leverages technology, applies the principles of centralization and coordination and is highly measurable.

The criteria used in the study provide a holistic view of procurement at the cutting edge. It is what many sellers would describe as an enlightened approach to buying that includes:

  • A more strategic/longer term view
  • A focus on key business drivers and not just a narrow focus on lowest price
  • Supplier partnership and development
  • Category management that recognizes that one approach to procurement does not fit all products, or services being bought.

 

How To Tailor Your Selling By Industry?

The sectoral analysis of purchasing sophistication makes interesting reading. However, some degree of caution is required before too quickly pidgeon-holing your customers and prospects based on their industry, or anything else for that matter.

Here are some points to help you sell to buyers from industries with different levels of sophistication:

1. Adapt to the sophistication of the buyer

Although some sectors are better at buying than others, purchasing excellence is far from the norm.

The study shows that only 16% of companies achieve procurement excellence, with 37% of companies at the bottom of the class. The rest are in the middle, or average category.

Perhaps if you analyzed your customer base, or pipeline similar percentages would apply.

Having a sales approach that reflects the different levels of sophistication among buyers makes sense. The one sales approach does not fit all buyers.


2. Ensure your approach is industry sensitive

You cannot separate buying from what is happening in any industry. The procurement challenges facing buyers vary from industry to industry.

Simple examples include the financial challenges of the US motor industry and the regulatory environment of the Pharmaceuticals industry.  All this means you cannot sell the same way to every industry.

Ensure your sales approach is sensitive to the industry context and strategy of the buyer. Just as buying reflects the particular opportunities and challenges of an industry, so too must selling.


3. Don’t make assumptions

Sweeping generalizations can be dangerous. This particular study is based on approx. 500 respondents and with 13 sectors that makes generalizations a little shaky.

It is important to approach each buyer on a case by case basis. Fully uncover the 3 dimensions of their buying (using the How, Why and Who Framework).


4. Don’t underestimate the buyer

Something that is all to common in selling. Start with the assumption that the buyer is professional, competent and operates within a process, or set of procedures. This can be the case even if organizations are not in the purchasing excellence category.

Expect to find a sophisticated buyer and you will never be caught off guard. Most surveys show the same thing; the general trend towards more sophisticated and in control buyers is unstoppable.


5. Help the buyer to buy better

The winning strategy for the seller is to help the buyer to buy – to embrace rather than fight against the key trends in respect of buying, such as buying process, business case analysis, etc.

The new role of the sales person is to coach the buyer in making a decision. If the buyer is lagging behind in their approach, then the seller can help him, or her to improve.


6. Find new ways to collaborate

Many of the dimensions of the Roland Berger survey either directly or indirectly relate to the level of collaboration between the buyer and the seller, for example:

  • ‘Involving suppliers in design processes’.
  • ‘Identifying cost improvements’.

Foster collaboration with the buyer if you want to become more than simply another supplier.

Click here for a copy of the Roland Berger Purchasing Excellence Study.

You must be logged in to post a comment Login

why-buy-smallad
The latest research on how buyers buy
Who makes the buying decision