A True Story About Arm’s Length Decision-Making

Salespeople often get a bad rap, sometimes deservedly so. But some purchasing managers can hang with the worst of them. All the following events are true.

The salesperson’s business is predominantly driven by RFPs and a process that is normally run by brokers. When this isn’t true, sometimes one of the stakeholders on the customer’s side is their purchasing agent or purchasing manager. As you might expect, the purchasing manager, much like a broker, exercises control off the process. They insure that the process moves along according to schedule and that it is done at arms length.

The salesperson in this story was invited to present to the prospective customer. His company was one of three that made the finals round. The purchasing agent decided that each finalist would be given one hour to present.

But before we get to what his issue was here I should share a bit more.

This deal is worth a $500,000 annually and the typical contract is three years. It’s a service driven business, so the performance can vary dramatically from one provider to the next. As you might expect, trust, caring, flexibility, and communication are critical to choosing the right partner.

Tick Tock

So when the clock reached the one hour mark, the purchasing agent said to the salesperson, “That’s it. Your time is up.”

• It didn’t matter that the conversation between the sales team and the customer team was creating tremendous value for both teams.
• It didn’t matter that there were unanswered questions on both sides, and that a decision would be difficult to make without having deeper conversations.
• It didn’t matter that one hour wasn’t enough time to determine whether or not the provider was going to be the right fit or deliver the results the customer needed.

The process had to be followed. Even to the detriment of the outcome. This is the worst example I have heard, but it is not all that different from slavishly following an arm-length process that doesn’t assist you in making a good decision.

And people who purchase this way are starting to recognize just how broken the process is. See this article from the Financial Times.