Once you get the purchase order (PO) as a new supplier: Congratulations! Your B2B relationship just started. Why? Because it gives you a reason to stay in touch, no matter how small the order. It allows you to designate account managers who manage the account. Depending on your industry the relationship manager at the selling company keeps track of everything going on. In software and SaaS businesses the “Customer Success” role tries to help the customer get the most out of your product.
A great way to think about a B2B relationship is the long and happy human marriage versus a one night stand. See Dwyer,Schurr and On 1987, Journal of Marketing.
By now knowledgeable people, particularly users in the buying center, have vetted your product or service.Just like a competitive job offer is not withdrawn if you ask questions, so too with purchase orders. Do ask questions along the lines of ” We are starting new here, are there common problems you see with other suppliers? We want to be sure that we avoid frequently occuring mistakes.” You can be sure that experienced purchasing people will come up with several problems they face. Recognize, that after the PO is issued the only thing that the purchasing department wants to avoid is a stock out or material rejection due to quality reasons. Also a big way that purchasing people demonstrate their value in organizations is how much they “saved”. See an earlier blog post on Five Differences between B2B Marketing and Supply Chain Managers.
Purchase orders are handled by the Supply Chain or Purchasing Department that frequently reports to the CEO or CFO or Head of Manufacturing/Chief Operating Officer. Here are some tips for the B2B marketer to make the most of the fifth stage of the B2B buying process:
Start by thinking what Purchase order terms are still negotiable? The answer depends on the 1) The systems and processes in the buying organization 2) The context and reporting of the purchasing department:
- Systems/Processes: Depending on the degree of computerization and ERP implemented, organizations fall into a spectrum. At the low tech end you might see spreadsheets being used with printed purchase order forms and printed general terms of purchase. The printed sheets lists things like a Force Majeure clause. Here a lot of human input is required and probably there is some leeway on some items- like payment terms. At the other tech end it is theoretically possible that the successful RFP bid info is fed into the purchase order directly. However, most organizations are not completely automated from RFP to Purchase Order. Even when RFP-PO process is automated, it’s possible to ask for changes – so long as it does not harm the interests of the buying organizations.
- Who does Supply Chain Report to ? Supply Chain professionals keep fighting professionally for the CxO position. This position might be called Chief or Head of Supply Chain and is considered a part of the top management of the organization. Many organizations do have the “Chief Supply Officer” but many do not. It’s worth finding out early in the B2B process how things work at your prospect organization. Here are some possible scenarios:
- Chief Supply Chain Officer: If there is a Chief Supply Chain Officer reporting to the CEO then you can expect a more strategic approach from the buyer dealing with your product. You can expect a longer term view and there might be flexibility in payment terms like 90 days instead of 180 days.
- Reports to CFO: The Chief Finance Officer (CFO) is likely to be more rigid about payment terms. This rigidity is not because of the “bean counter” stereotype of CFOs’ but their jobs. Recognize that they are trying to fine tune finance charges and have their own funding and loan issues to think of. In such situations it’s good to think about your own bill discounting or letter of credit through banks.
- Reports to Head of Manufacturing/Operations: In such situations the most important criteria is to ensure that your quality and delivery times are perfect.
To summarize, at this fifth step of the B2B process, this is your opportunity to build a great B2B relationship.
We wish our dear readers a Merry Christmas!