Entrepreneurial suppliers need to do their homework when it comes to approaching procurement departments – they are the ‘gatekeepers’ to the prospects smaller companies seek. In this issue of SmartProcurement Shawn Theunissen of enterprise development organisation Property Point has put together a list of tips that procurement organisations can share with their suppliers.
It’s important to develop the right relationship with procurement from the beginning, which means research and relationship-building must be key parts of your sales and marketing strategy.
Requirements will differ from company to company, but there are some basic ‘ground rules’ that SMEs need to be aware of.
How the procurement process works
All procurement usually begins and ends with a Service Level Agreement (SLA). When a procurement department needs a new service to be provided, it draws up an SLA that outlines the specific services required and the exact scope of the work involved.
The procurement department then sends the companies on its vendor list a Request for Proposal (RFP).
Based on the response from the vendors, those that meet the criteria will be short-listed and may be asked to give a presentation about their business and how they will deliver on the specific project.
Procurement would then go on to ask these vendors to complete a Request for Quote (RFQ) outlining their pricings for the contract.
From there, a decision is made and the original SLA is signed with the successful vendor.
For most entrepreneurs, the starting point for this relationship must be applying to get on the procurement department’s vendor list, which usually means introducing yourself by making a phone call or sending an email.
How to introduce your company
Your introduction is the procurement department’s first impression of you and your services – and you don’t get a second chance to make a first impression. Remember that procurement receives hundreds of these calls and emails every day, so be brief and to the point.
Know what you want to say about your business before you call or type your email. Be clear about the value you believe you can add to procurement and communicate this. Include important factors that relate to their business and yours, and avoid lengthy emails or conversations. Importantly, make sure they can contact you easily once they’ve received your call or mail, and make sure you respond to that contact promptly.
Double-check your documents
Double-check your vendor application, RFQs and RFPs before sending them to procurement. Get “another pair of eyes” – preferably someone in business – to read your documents very closely. Ensure that they will be honest with you when they find mistakes or about what they think is unclear. Remember that if they don’t understand something in your document, it is likely the procurement department will fail to understand it.
Correct everything before you send it to procurement – this step could be “make or break” for your company.
Deliver the goods
Once you’ve accessed the opportunity, you must prove that the client was correct in choosing your business. Private sector companies expect vendors to deliver high quality service because their reputation is at stake. Your technical skills must be accurate and your employees and management must be well briefed about the project so that if the client calls, everyone is “on the same page”.
After starting work on the contract, make time to build and grow the relationship. See this as a means of opening the door to further opportunities. Make sure you please your customers, no matter how long your contract is for. Add value wherever you can, and always “under promise and over deliver” instead of the other way around. Clients who get bad service are likely to warn others against using your company, so make every effort to provide the best possible service at all times.
Tips for opportunity-seekers
1. Do your homework. Learn about your client before you contact them. Do some research about the company online and understand how their systems and processes work and the market they are dealing with.
2. Be compliant. Make sure your paperwork (VAT, COIDA, BEE, OHS, etc.) is in order before you call or email procurement.
3. Adding value. Know what value you can add for clients and what this means for them. How will it help them to improve their own service offering? How will it save them money? See your work with them as a partnership.
4. Your core offering. Don’t try to sell everything to procurement. Understand your service offering and perfect it. Specialise in your core offering and don’t take on “bits and pieces” that aren’t part of that.
5. Be professional. If you want procurement to take your business seriously, you must behave accordingly. Be courteous and polite on the phone; never arrive late for meetings; check your emails regularly and respond promptly; communicate honestly if a deadline cannot be met.
6. Stay in touch. Once you’re on the vendor list, make courtesy calls to touch base with the procurement team. Find out when RFPs are going out and then send your company profile a month in advance so that you stay top of mind.
7. Be fair with your pricing. Your pricing must be fair and realistic. Large clients will want a detailed breakdown of the costs of your supplies, equipment and labour to ensure that your pricing is reasonable and that it will sustain your business throughout the contract.
8. Growing the relationship. Get to know the people you’re working for – the better you get to know them, the easier it will be to identify new ways to keep adding value.
To be the best in your field, see every customer as an opportunity for a partnership where you cannot only grow your business, but deliver exceptional service and improve your reputation by doing so.
For assistance growing your small business or develping yourself as an entrepreneur contact Property Point.