No more wheeling and dealing

Presents and favors are out. Transparency and digital sales portals have ended nepotism in purchasing. Those will be successful today who know their customers better than the competition.

Axel Gloger

Industrial buyers used to have a fine life. Living in the land of milk and honey. Customers just about tried everything to keep buyers happy – and lubricate the course of acquisition talks: "Either it was a free ticket for a sold-out concert of the Berlin Philharmonic Orchestra or, on another occasion, it was expensive wines", reported a buyer of a car manufacturer. He does not want to see his name in the newspaper but assures us that expensive presents were the rule, not the exception: "Wine and dine in the customer's VIP lounge at the stadium of a top soccer league club, or a Montblanc writing set – everything was possible."

But those glorious days are over. "Nothing's coming any more. No more presents", says the auto man. If a buyer needs an ink pen today, he'll have to buy it. Compliance regulations prevent even any hint of bribery in the B2B market. Customers aren't allowed to give anything, buyers aren't allowed to accept anything – that's the simple guideline which meanwhile exists at every fair-sized company. Those who do not comply with it will have to go. Just recently, a Telekom buyer of services was dismissed because he had lived off vendors.

The ban on presents shows it most clearly: Business relationships between companies proceed today according to new rules. They are "transparent, rational, everything is documented", says Peter Winkelmann, Professor for Sales and Marketing at the Hochschule Landshut. When the customer finally awards the contract, there had already been measurements and weight taken beforehand, offers had been compared, and any personal component of the business had been ignored.

These processes are often embedded in digital offer portals – and suppliers will be well advised to stick to this process. It's not a good idea to completely ignore buyers and their digital platforms and go see the general manager directly. "Going on a motorbike tour with the company boss on the weekend, afterwards having a beer and getting the order in dry sheets – that's more and more a no-go", says Dirk Schäfer, Managing Director at Kerkhoff Consulting, a procurement optimizer. If the purchasing department gets wind of such practices, chances of getting the contract will get slim. Accordingly, many heads of companies will immediately pass on to their purchasing department any sales contact which ends up with them. They know that the procurement guidelines also apply for them.

Because the amounts of money are often huge in the B2B market, compliance regulations are extremely rigid. The pressure is accordingly high: "It's not unusual that buyers will have the recorder running on the iPhone while the round of suppliers is on", says Winkelmann. That procedure provides proof and evidence – if the award is disputed, the buyer can prove his innocence. In acquisition situations, even friendships no longer count – formerly, they used to be the basis of some customer / supplier relationships. "Relational management is no longer as important as it used to be. In parts, customers even actively prevent it", says Dirk Zupancic, who teaches marketing at the German Graduate School (GGS) in Heilbronn. From the start, buyers and sellers are not supposed to become pals. Amigo relationships are suspicious because they are opposed to a purchase decision oriented on price and quality. Some companies thus even prevent any attempt of forming friendship ties: "They have a rotation system for their buyers so that personal relationships won't get too close", says Winkelmann, the professor at the Hochschule Landshut.

Transparency instead of wheeling and dealing – that's the trend laid down in standardized processes. In electronic market places, customers put up their contracts for bidding; the sales department gets documents with specifications, bidder form sheets must subsequently be filled out. "As a process, we don't handle the tender invitation to a consultant any different from buying services from a security or cleaning company", says Susanne Robker, Head of Purchasing of General Goods and Services at Lufthansa. The Group shows offers in a digital assessment matrix which presents the different services and performances. This matrix provides a relationship for services and prices. "That enables the purchasing department to find sellers with the best price/benefit ratio suitable for the requirements", says Robker.

Meanwhile, the bidder platforms for electronic purchasing have become the everyday standard place of application for people in acquisitions. Competitive pressures will thus increase for them as well – because invitations to tender are frequently open. Not only regular suppliers will enter their offer but also any other company which considers itself qualified. "From the point of view of the offering party, the complexity at the interface to the customer is growing exponentially", explains Christian von den Brincken, Managing Director of Marketing and Strategy at the outdoor advertising company Ströer. The hopper would become ever fuller. Customers are getting extreme transparency and are able to choose from many more offers than at the time when offers were still being sent by letter. "In pre-digital times, there were two competitors; today, there are 77", says marketing expert Zupancic.

For successful sales, it's no longer enough to go to the customer with a few brochures and a sampling case. The seller must be well-versed in dealing with e-platforms and standardized invitations to tender. Moreover, he should know the customer and his environment very well and have virtually customer-tailored offers. It were important to provide the proper solution at the right time, says consultant Schäfer: "In turn, the buyer should know who is the contact at the customer's office, and who will make the decision for the contract at the end of the day." Being a good listener and being attentive would pay off here: If you don't ignore or pass over anybody, you'd have it easier to get at the contract.

The digital media provide points of contact for researches about the internal life of customer companies. "Potentials are great", says Hartmut Sieck, owner of Sieck Consulting. "Today, an account manager can find out many more things about customers than had been possible 20 years ago." According to him, the streets were proverbially paved with information.

But only few sellers would also know how to collect such details. "Evaluating Xing and Facebook, doing search machine researches, analyzing digital company documents", says consultant Sieck. That's the way to find out, even before the initial contact, how the customer ticks – and where his challenges are. Often enough, it's a matter of helping the customer get a head start in his sales market. "Also knowing the customer's customers", says Ströer's Managing Director von den Brincken, "for that, the sales department needs a broad horizon which goes beyond their own product."