Back Door Selling

The case studies below are from Delphi Delco Electronics and Texas Instruments – two examples of the many companies that have used the How to Deal With Back Door Selling workshop not only in North America, but internationally.

case study #1

Paving the Way for Greater Negotiation Power at Delphi Delco Electronics Systems

Unique training program helps team purchasing, engineering and everyone who talks to outside suppliers

At Delphi Delco Electronics Systems, the need to stop suppliers from pitting engineering against purchasing was evident if the company wanted to remain competitive at the bargaining table.

With the help of a unique training program, the company mapped out a strategy to team purchasing, engineering — and actually everyone who talks to outside suppliers — to achieve greater negotiation power.

" The one thing that really surprised us as we started rolling this out was the enthusiasm from our engineering group," says Hosking.

The Challenge

In the past, the purchasing road was paved with suppliers and manufacturing representatives who were well entrenched with the engineering community. Unfortunately, it was impacting the company's leverage to negotiate the best value.

"Our suppliers grew up with our company — embedded in our purchasing process — and greatly influenced the purchasing decisions to their advantage," according to Mark Hosking, purchasing manager at Delphi Delco. He explained that a positive result of the Worldwide Purchasing Process was to put a little more distance between the supplier and purchasing, and the supplier and engineering. That's when it was determined to educate everyone who interfaces with salespeople to understand that they are involved in the negotiation process.

"We've had many engineers unknowingly give information to our suppliers, thinking they were helping them and our sales people, but what they were doing was cutting out our legs from under us when we were in the battle of negotiations," said John Glass, purchasing manager for the Electrical Passive Components Group.

A unique training program, called 'Dealing with the Highly Skilled Salesperson,' was brought in by the purchasing department to "even up" the training between engineers and the suppliers who call on them. Developed by Robert Benedict, President of Benedict Negotiating Seminars, the videotape-based program helps non-purchasing people understand a subtle fact-seeking process used by sales people called "Back-Door Selling." The training program consist of a fast-paced videotape, small group experiences, role playing, and other practical training resources.

Hosking explained that "the program is very interactive with a user friendly training manual. The tape itself gets you involved and laughing as it helps build teamwork between engineering and purchasing."

A Global Roll-Out

In the first year of the roll-out strategy, nearly 1,000 engineers were trained. Glass estimates that another 15,000 to 20,000 people will be trained in the United States. In addition, Delphi Delco purchasing departments around the world — including Europe, Asia, North and South America and Central America — have received training. More global staff will also be trained.

Mapping out a strategy

The target audience for this new training concept at Delphi Delco initially focused on engineers. That's why the primary communications strategy was to approach senior-level engineering, purchasing and other executives about the advantages of helping the engineering staff to deal with the so-called 'back-door selling' suppliers. After all, purchasing works hand-in-hand with engineering in winning business and getting the best prices.

Glass went to the top of the organization with an assertive message: "Here's something that we believe will not only help purchasing to do it's job, but also engineering as an integral part of our success." Soon after, senior executives were invited to hear Robert Benedict, a national negotiating specialist, talk about the power of knowledge as a bargaining tool. They, in turn, went back to their staffs and recommended the program based on their own positive experiences.

Based on several options for rolling out the program offered by Benedict Negotiating Seminars, Delphi Delco selected the lowest price, highest value option, said Hosking. "Bob Benedict trained our people who, in turn, trained others."

Key to the roll-out strategy throughout the company was a team approach: A senior purchasing manager and senior engineering manager presented the class together to employees within all engineering disciplines: design, software, mechanical, electrical, manufacturing, process, and system design engineers.

"The one thing that really surprised us as we started rolling this out was the enthusiasm from our engineering group," says Hosking.

Evie Van Rens is an engineering analyst in the Milwaukee Design Center of Delphi Delco who believes that the 'Dealing with the Highly Skilled Salesperson' training was needed years ago. She explained: "Engineering has interfaced with suppliers for years to get specialized tooling and other products. By not having this training sooner, we as an organization may have unwittingly disclosed valuable company information without being aware of it, thus overpaying for the end product.

"Val Hoffmann from Delphi Delco's Purchasing in Kokomo, Indiana did an excellent job presenting the educational materials in an articulate and professional manner within the context of our business environment. He used the video and training manual, and challenged the participants to get involved in order to get the most out of the workshops. By using our real situations, asking penetrating questions and suggesting responses, it was time well spent — and meaningful on a career Performance Development Plan (PDP) as training," according to Van Rens.

An Engineer's Perspective

Evie Van Rens is an engineering analyst in the Milwaukee Design Center of Delphi Delco who believes that the 'Dealing with the Highly Skilled Salesperson' training was needed years ago. She explained: "Engineering has interfaced with suppliers for years to get specialized tooling and other products. By not having this training sooner, we as an organization may have unwittingly disclosed valuable company information without being aware of it, thus overpaying for the end product.

"By using our real situations, asking penetrating questions and suggesting responses, it was time well spent — and meaningful on a career Performance Development Plan (PDP) as training," according to Van Rens.

Paving the way

A secondary, but equally important, audience focused on secretaries and associates who interface with suppliers, such as quality, systems, parts engineering, and manufacturing engineering. Hosking noted: "One of the most valuable ways for a supplier to get information is to build a relationship with secretaries and associates to get pricing and other information."

Training began in the Milwaukee and Flint design centers but quickly gathered speed in other design centers, including Singapore and Japan. "We really felt we had to attack this issue globally, across the entire company," according to Hosking. In the first year of the roll-out strategy, nearly 1,000 engineers were trained. Glass estimates that another 15,000 to 20,000 people will be trained in the United States. In addition, Delphi Delco purchasing departments around the world — including Europe, Asia, North and South America and Central America — have received training. More global staff will also be trained.

"This program has already spread into areas like marketing and sales," said Glass. "The neat thing about it is people who say 'Oh, I know who else could benefit from this' and the leaders have taken it to areas that we didn't plan on during the first go around. But it's like anything else — it was so exciting and they wanted to share it." Unfortunately, the biggest shortfall of the strategy was not ordering enough training manuals in the first year.

Glass explained that due to Delphi Delco's large size, there are many internal people who need to be cognizant that competitors or customers will go to any length to find out information. Employees should be aware that information – even that which is shared with other Delphi divisions — could be unintentionally passed into the wrong hands and used against the company.

Greater negotiation power

Steve Schreiter, senior buyer in the Purchasing Department, said: "After 20-plus years of experience, I think I've seen it all." He was pleased with the training materials because they portray the way business is handled, although he also believes there are many reputable salespeople out there.

"What made me most happy was not what I personally learned, but that Delphi Delco was making it available to other purchasing people and the engineering community to experience stories and data on how business is handled. This is the way it works," said Schreiter.

"We've had many engineers unknowingly give information to our suppliers, thinking they were helping them and our sales people, but what they were doing was cutting out our legs from under us when we were in the battle of negotiations," said John Glass, purchasing manager for the Electrical Passive Components Group.

"Finally somebody other than the Purchasing Department sees 'back-door selling' as an issue — and this gives me more ammunition to continue or to strengthen what is being done through this program," said Glass. He believes the training is a tool to arm Delphi Delco people so they are successful in their jobs and capable of knowing what information to share with whom.

Before the program from Benedict Negotiating Seminars, "it was an uphill battle when we were trying to negotiate and a supplier already knew all the details behind the project; who was going to get the business or the fact that the customer will not change whatever they were bidding on and that the timing was in their favor," said Glass. "It makes us stronger as buyers across the table when we know how to deflect a question, fog it or to just not answer it."

Now before any big negotiation, the Purchasing Department ensures that the Delphi Delco people have gone through the 'Dealing with the Highly Skilled Salesperson' program.

Hosking concluded: "There is no qestion in my mind that this program has had an impact on the bottom line — and it's in the millions."

case study #2

Negotiating Through Challenging Times at Texas Instruments Inc.

Excerpts from an interview with Maggie Fisher, Worldwide Procurement/Logistics Business Process Development Director

Oh, by the way... who else are you looking at?
And how do we stack up?
Are we in the ballpark on price?
Does purchasing have veto power, or do you make the decisions?
When do you really need this stuff?

Texas Instruments Inc. is a world leader in digital signal processing and analog technologies.

For the past 6 years, Texas Instruments has educated it's workforce to recognize the importance of working effectively with suppliers. One of their most successful strategies has been the introduction of a course entitled, "Dealing With The Highly Skilled Salesperson" (also called "How To Deal With Back Door Selling"), a video-based workshop created by Robert Benedict of Benedict Negotiating Seminars, Inc (BNS). The following article summarizes Texas Instruments' highly successful implementation strategy

"Dealing with the Highly Skilled Salesperson" is more of a discovery than it is a 'tell' course. Our engineers like it because it is an eye opener about salespeople and the impact they can have when they give too much information away. Through participation in this class, they can internalize the impact versus procurement telling them."

Maggie Fischer

Background of the Challenge...

Texas Instrument's Supply Management organization is divided into Materials, Equipment, Logistics, and Service teams. Together they manage billions of dollars annually. This organizational structure, having numerous business requirements and a functionally diverse team, can create quite a challenge for Texas Instruments' negotiations.

TI realizes that each of the functionally different team members are coming in contact with suppliers on a regular basis. This multitude of supplier contacts creates the constant potential for non-purchasing employees to inadvertently say something to a supplier that would take away some of TI's negotiating leverage.

It is, therefore, very important that TI employees understand that "information is power" and that there is value in thinking through the potential impact of sharing information with suppliers.

Hearing About a Possible Solution...

Maggie Fisher is TI's Worldwide Procurement/Logistics Business Process Development Manager.

"My predecessor and I are members of the Supply Management Professional Development Network of the Institute of Supply Management (ISM). At these network meetings we share information on training and other things we see as value to the development of our workforce. One of the member companies told the group about a course that they were using called: "Dealing With the Highly Skilled Salesperson." Also called, "How to Deal With Back Door Selling," the course was getting very favorable feedback.

TI did a test class and based on the feedback, immediately began to roll it out to the rest of the organization.

The Initial Focus...

The courses were first presented at TI's Dallas facilities where a majority of the centralized purchasing teams are located.

The initial classes focused on engineers and manufacturing people who interfaced with suppliers – and with purchasing.

The Response is Rewarding...

After attending the "Dealing With the Highly Skilled Salesperson" course, the attendees unanimously reported a very positive response, citing that the class was fast-paced and very informative.

It was just getting students to attend the course in the first place that was the real problem.

Gaining the Necessary Management Support...

To spread the impact of the course, gaining management support was vital. A presentation was made to the Semiconductor Group Senior Management team.

The presentation included a preview videotape of the "How to Deal With Back Door Selling" workshop. The presenters then shared what they felt was the impact to the bottom line at TI and outlined what could be "left on the table" if they did not have the leverage they needed. The Executive Team agreed with the value of the course and strongly suggested their people attend.

"We need to have all people who are interfacing with suppliers be aware that information is power and releasing information to suppliers is reducing TI's leverage in a negotiation."

Christian Kaemmerlan
TI Director of Procurement for Europe

Attendance Dramatically Increases...

Because of the support of the Senior Management team, attendance at the courses increased to as high as 80% from various teams.

The Course Spreads to Europe...

The need for this course was also growing within TI Europe. Christian Kaemmerlan, TI Director of Procurement for Europe, recognized the need to coordinate the interaction of all people who were interfacing with suppliers. He wanted the communication from the procurement part of the team and the technical part of the team to be in alignment.

At the point of the roll-out, Christian Kaemmerlan visited with TI personnel located in England, Germany and France and described the value of the training. This paved the way for a very successful class attendance.

TI had a trainer go throughout Europe presenting the workshop in three geographic areas. Classes were made up of Engineers (Application and Facility), and Managers of Development, Program, and Marketing.

Europe Sees Significant Benefits...

Christian Kaemmerlan suggests, "This course has been very well received and many people, even four years later, still remember the short video where the guy is digging his own grave. It has been well received by procurement who see the class as a good vehicle and useful help at delivering their message to engineers."

Engineers consider this an eye opener about salespeople and the possible impact of them giving too much information. In addition, they perceive the opportunity to reverse the situation and start asking questions of salespeople, a real advantage to TI's negotiating strength."

TI now plans to take the course back to Europe to do a sweep through England, Holland and France.

One Trainer Can Make a Real Impact...

TI's Maggie Fisher has both a US-wide agreement and a European agreement with BNS. Eventually TI plans to have one certified trainer in Asia and one in Japan.

"As a trainer, I so enjoy watching the transition of the attendees from observers to participants," said Maggie. "There is the initial recognition on their faces as they see an example of something they have done on the video. There is the initial eyes widening, followed by a quiet chuckle – then they lean forward and start to pay attention. They then know this class is for them."

"We think this course should be embedded in their psyche. This is not just for the big negotiations, but is in everything they do with suppliers," concluded Maggie Fischer.

New Employee Training ASAP...

"Dealing With the Highly Skilled Salesperson" is now a mandatory course for new procurement employees.

The Time is Now to Make a Difference...

TI has realized that effectively "dealing with highly skilled salespeople" is a real competitive advantage. With top executive support and an aggressive training strategy, they can and have, received significant benefits as they negotiate through today's challenging business times.

Craig W. Bakken– Craig has written and published numerous materials on the subject of purchasing and creativity. He spent 19 years in a Fortune 100 company in Production, Quality, Training and Purchasing positions. He also spent 2.5 years in one of the largest privately held marketing and sales company in the United States and is currently the Business Development Manger of one of the top 25 business schools in the United States.