If you are an industrial subcontractor or if you sell services to industry, becoming a leading supplier for a key account buyers can really open doors for you.
These major companies, referred to as “key accounts”, are often global companies.
Being chosen as a supplier for this type of company almost guarantees access to new markets, sometimes without having to develop specific commercial activities in the countries concerned.
But attracting a key account buyers can take time.
Here are some steps that will help you to appreciate the search process used by the purchasing departments in large groups.
Step 1 – The company defines their future needs for a product or service
The purchasing department has two ways of making its calculations. Depending on the type of purchase, expenses can be direct or indirect.
A direct expense can be immediately allocated to the cost of a product, a good or service without making any intermediate calculations.
In general, the following expenses are considered as direct:
the purchase of goods, raw materials and consumable supplies
direct labor (labor used directly in producing the good or providing the service).
Conversely, an indirect expense requires an intermediate calculation to be allocated to the cost of a product, good or service.
These are goods or services that are not directly integrated into the finished product, such as computer hardware, equipment and accessories, and related services.
When expenditure is categorized as ‘indirect’ by purchasers, minimum requirements are established concerning suppliers, even before the search begins.
Step 2 – The key account buyers gather information about you
This is it; the time is here to put all our advice about SEO into practice because industrial buyers start their search for suppliers using Google!
Here is the key information they want to obtain about you!
Your company profile
Who are you and what do you sell? What is your competitive advantage? What is your preferred sector? What is your strategy?
For some buyers working for key accounts, you may be discarded from their searches if you do not wish to disclose this information.
This is often essential information that buyers need in order to the next step of the buying process with you.
Who are your customers?
Industrial buyers are curious to know who you work with. Your customer list can say a lot about you, your strategy and the health of your business.
Is your business regional, national, or international?
They want to know what geographical area you are able to cover. Thanks to this information, they can find out how many sites you have.
Products or services offered
key account buyers want detailed information about product specifications if you are a supplier of configurable products (with stock); or detailed information about capacities, the composition of the machines and plant equipment or project examples, if you are a custom manufacturer.
Based on the information they find on the internet, industrial buyers create a list of potential partners.
These potential partners can then be contacted by the buyers to obtain additional information.
This may include questions about manufacturing equipment and production capacity.
Depending on the buyer’s need, you will have to list all the machines or equipment you own that can meet the requirements specified by the buyer.
They may also ask quality assurance. Having certifications and recognized quality standards (ISO) is essential!
Most key accounts tend to require a minimum level of certification and have strict quality control procedures for their suppliers.
They also ask about the availability of staff. Who will be the contacts for each step of the supplier selection process?
Once all this information has been provided, some suppliers will be lucky enough to be able to move on to step 3.
Some key accounts allow suppliers to register directly via their website.
Step 3 – Compatibility of supplier information with the purchasing software.
As a supplier, you know that your company can more than meet the requirements of this key account.
Yes, but… you still have to tick all the boxes!
At this stage, industrial buyers don’t know enough about you yet. They will need extra information that you haven’t yet provided.
For example, buyers need to know your performance measurements, your KPIs, your production capacity, your payment methods, your certifications, and your compliance certificates.
Step 4 – Last tests before the final step
To avoid any errors, the buyers may also ask the potential supplier to carry out additional tests such as:
A site visit
Key account buyers will want to see your organization and your machines with their own eyes.
This will include a tour of your manufacturing plant, an audit of your quality procedures, and a discussion with some of your employees in key positions.
An audit of your capacities
Your in-house manufacturing capabilities will be examined to ensure that your machines or employees can produce the required quality and volume of parts.
The buyer’s design and engineering team will test their prototypes, and you may need to visit their establishment to facilitate successful testing.
Manufacturing of prototypes
The buyer may want to see your expertise with their own eyes and request a sample of a custom part.
You may have to incur additional costs to win this great business opportunity.
Product assembly assistance
You will need to provide samples ready to be included in the assembly of the prototype and you will need to provide assistance during installation and testing to ensure correct use by the buyer.
It is likely that you will be given feedback on the original product design.
Your ability to make changes quickly, to increase production capacity or profitability, will be an important selection criterion.
You should be able to examine the buyer’s needs and provide any analysis that may help reduce overall cost.
Cost reduction can involve the choice of products, design, volume, or shipping options.
Step 5 – Choosing the final supplier
The supplier that successfully passes all these steps will now go through the process of new-supplier integration, which includes signing the contact, and administrative formalities, but above this represents a new business opportunity!
The supplier in question is added to the company’s list of approved suppliers, opening the door to a vast global network of key account buyers.