Selling the Procurement-Card Concept

by Dr. Tom DePaoli

Brush up on your marketing skills to help sell the procurement card to your organization.

Procurement cards are a proven best practice. Card providers are constantly upgrading their systems, reports, and software, and continuously improving the functionality of the cards.

So why are so many purchasing departments unable to implement a procurement- card program? There are many reasons, including that implementing procurement cards can demand an outstanding internal sales program and intense persuasion of your internal customers. If this is the case in your organization, brush up on your sales skills.

One of the biggest barriers to implementing a procurement-card program is selling the concept internally. Such a crucial sell requires excellent sales and marketing skills. The good news is that these skills can be learned. Here are some guidelines to help you sell the procurement-card program.

Pre-Work Blueprint
The following is some pre-work to complete before your presentation:

• Target your savings. Get a good projection on the number of transactions that will be eliminated and exactly what items can be purchased with the cards. Get the hard savings right including reductions in mailing, checks, time, and forms.
• Establish in advance which suppliers will accept the procurement card. This will help eliminate initial teething pains with inexperienced suppliers.
• Establish a transaction cost and include it in your savings. Many accounting and consulting firms can calculate this cost for you and boost the credibility of your savings.
• Involve as many parties as possible in the pre-work stage, especially accounting and receiving. If possible, conduct site visits to firms that have successfully implemented procurement-card programs and arrange face-to-face meetings with the accounting and receiving departments to help your internal people understand the concept, learn from their experiences, and alleviate their fears.

Squash the Two Biggest Fears
The two biggest fears that you need to deal with are control and security fraud. During your “sales” presentation, make sure you present all the safeguards against fraud. Control is one of the strongest selling points of procurement cards. Contrast the elaborate controls available with procurement cards as compared with your current small-purchase control system. If you don’t address and eliminate these two fears from every angle possible, you will not sell the procurement-card program. Enlist a champion, preferably at the vice president or director level, to understand the procurement-card program and assist you in the implementation.

Target Key Groups
Target your controller and key accountants for even more persuasion. Listen carefully to their concerns and address them. Constant reassurance of the “best practice nature” concept of the procurement card can be accomplished via some pre-sell methods such as meetings with key requisitioners, alliances with maintenance personnel who usually become the procurement card’s strongest proponents, and finding out if your competitors are using procurement cards. Ask your suppliers if they are willing to give personal testimonials about procurement cards and how the transaction data is gathered at their site.

Fine-Tune the Presentation
Limit your presentation to no more than 30 minutes. Be specific about your rollout plan, objectives, goals, savings, and impact on other departments. Be prepared to answer the tough questions about control and security fraud. The procurement-card concept is a strategic tool that can help purchasing professionals escape the paperwork swamp. Preparation and marketing are essential for procurement card acceptance in your organization. Concentrate your resources in these two areas and your sales presentation should be well- received.