Do your customers really need you in the era of COVID-19?

Posted by Brian Doyle on May 1, 2020 2:43:31 PM
Brian Doyle

This is a scary time for suppliers and their sales teams. Customers concerned with the impact of COVID-19 are canceling or postponing projects and curtailing spending. As a result, suppliers are losing revenue and seriously considering pay cuts and/or layoffs to help them through this difficult time.

Interestingly, it’s also a scary time for procurement and supply chain professionals. They are the ones responsible for reining in that spending, but they also need to be aware of maintaining the supply chain for their businesses. In the extreme case, overzealous procurement professionals could kill their own businesses by reducing spending to the point where their suppliers can no longer survive. Good procurement people realize they must have a symbiotic relationship with their suppliers.

Lately, I’ve seen multiple blogs and articles published by procurement organizations about how to maintain the balance between prudent spending and collaborating with suppliers to maintain a healthy supply chain. Guidance from procurement groups and consultants includes:

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“Lengthen payment terms on all non-essential items,” and “Be more forceful about what the business needs vs. what the business wants."

GEP Procurement

“Identify critical suppliers – Find those suppliers who are critical to business continuity and work with them through challenges faced.”


“Building strategic supplier relationships can have a huge impact on the performance of your supply chain…clearly identifying the strategic partners who will play a pivotal role in driving business value.”  

Supply & Demand Chain

All of these quotes include the same theme – identify your most important supply chain needs (and this includes data & information, not just physical supplies) and those critical suppliers who deliver them. Then, work with those suppliers to maintain a relationship where both companies can survive (if not flourish) in this unique business environment.

Good procurement groups know they need to cut costs as their own company’s sales are at risk and they also know they need supply partners for their business to function. They’re working hard to separate their most important suppliers from those that aren’t as necessary. As a supplier, the question is, “How do you establish yourself as the company your customer can’t live without?”

In the B2B space, we talk too often about “value adds” – things like sponsoring customer events – that are “nice to haves”. In the age of COVID-19, these niceties are nearly worthless. Instead, I would submit that there are three key areas that prove your value to your customers. These are your ability to:

  • Increase their revenue
  • Reduce their expenses
  • Reduce or mitigate their risk

If you aren’t proving that you provide one or more of these outcomes, you aren’t adding real value. At the same time, if you are providing one or more of these outcomes, despite all the COVID-19 noise, you will gain the attention of your customer’s C-suite. CXOs are especially busy right now, but they continue to care about increasing revenue, reducing expenses and reducing risk.

Risk reduction in particular is often overlooked but is especially critical in a crisis. Procurement is looking for ways to shore up their supply chain and if you can minimize the risk associated with the delivery of your product, you will stand out as the “essential and critical supplier” the procurement organizations are advocating for their members.

In this turbulent time, both sides of the supply chain are scared. Procurement needs delivery of critical goods/services and is busy identifying the few suppliers that they will work with during this crisis. In order to become one of those few, suppliers need to clearly communicate the value they provide in ways every customer can appreciate.


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Topics: Negotiating with Backbone, winning proposal, value selling, procurement