Should sales people break the rules to win?
In his article Richard says “Put simply – understanding the supplier lifecycle will enable you to map your sales process and thinking to the process and thinking of the customer.” I heartily agree but would add that from the suppliers’ point of view, there is a risk that they could end up in a restrictive process with limited scope to demonstrate the things that differentiate them from others bidding for the same work. This is also a risk for the potential customer as although they will of course get answers to questions they have asked, they probably won’t get answers to the questions they should have asked.
Incidentally, supplier lifecycle may mean a formal process with RFI, RFP and the like but the points made in this article apply equally well where there is no formal process. In this case when we talk later about the supplier and the users cooperating to define the ideal solution they will also be cooperating to define a mutually acceptable buying process.
Provided the procurement process allows suppliers some space to make a ‘freeform’ presentation then the potential customer could get the best of both worlds. All responses will conform to a standard structure so all will provide answers to a set of fixed questions but the prospect will also gain an insight to the suppliers’ knowledge and experience if they are allowed to also present their own thoughts and ideas. After all, prescription will constrain innovation, but we acknowledge that not all customers will be happy to be on the bleeding edge.
If the procurement facilitates both a fixed and a flexible response then both the suppliers and the prospective customer apparently have the ideal situation. So why might sales people need to break the rules? There are two main reasons;
- Firstly if a prospect has a very strict and restrictive procurement process then the sales people may need to find other ways to gain visibility of the things that really make their company different.
- Secondly, even a flexible procurement process will tend to sanitise the responses such that the solutions all look rather similar with the main differentiators being price and terms & conditions. If the intended purchase is something such as a piece of equipment with a very clear functional purpose, then a restricted purchasing approach will usually work. However, if the intended purchase is for a service or a solution, then for the customer to enjoy the best outcome the procurement process will need to be more interactive and flexible.
How has the procurement scene changed?
We quoted the results of a couple of surveys a few months back which demonstrate clearly that the real issue for suppliers is the easy access that potential customers have to apparent information. Apparent as much of what is found on the web is often just data and unsubstantiated opinion.
A further piece of recent research suggest that ‘buyers’ are some 60% along the way through their decision making process before engaging with potential suppliers and as a result the buyers are in the driving seat. This often leaves the potential suppliers with the task of dealing with the consequences of misinformation and this task is not easy if the procurement people are, as is understandably the case, of a skeptical nature. This is a classic procurement scenario where the engagement is led by the ‘buyer’ with the potential supplier being left to react when responding.
Another piece of research sends a dire warning for those suppliers who wait for the prospect to contact them as it found that 76% of the orders go to the suppliers who engage early leaving just 24% to fight over for those who wait to be approached. This supports a long held view that ‘blue birds’, opportunities that turn up unexpectedly, are often just a prospect wanting a few make-weight bids and that the likely winners of the work are already well entrenched. Many companies qualify out such apparent opportunities saving themselves the time, effort and money of bidding for something they almost certainly cannot win.
Why and how should sales people break the rules?
The why is simple; if the situation is that the prospect has a restrictive procurement process then the sales people will need to act to change the ground rules to improve their position over that of competitors who will be bidding for the same piece of work. To some this will seem very self-serving of the suppliers but the reality is that the ‘users’ of whatever is procured as a result of a more open approach typically get a better outcome hence both sides benefit equally. If the procurement specification is restrictive and the ground rules can’t be changed then, as with the blue bird mentioned earlier, consideration should be given to whether this is in effect an opportunity to be qualified out.
The how is also not too difficult;
- Scenario one is that sales people build relationships with the procurement people in their target prospects and the engagement process is then driven by the procurement rules.
- Scenario two is built around the idea that the role of the sales person is to engage long before a procurement process has begun. That engagement will commence with the user community and the financial people, then the procurement people and other stakeholders who might have a say or an interest in the decision that will be made.
Scenario two will be familiar to anyone who has been involved in professional selling over the past 10 or more years but may be less familiar to those who have only more recent experience. It is a tried and very well tested approach that hinges on one key strategy; suppliers must engage with the prospects they are targeting before there is a requirement. The objectives can be summarised as:
- Building relationships with those who will use the solution, once it is acquired, as well as those who will be involved solely in the procurement and decision making process
- Use this period before procurement commences to understand the full set of issues the users are struggling with
- Use the time to demonstrate to the potential users’ new and different ideas they may not have thought of. Suppliers are an excellent source of information in effect providing a free source of research so the suppliers need to ensure there is mutual respect in the relationship at this point
- The interactive nature of the relationship building process enables both the supplier and the users to influence and shape the eventual opportunity to the advantage of the user, who will get a closer fit to their real need. This is also an advantage to the supplier who will be seen as providing thought leadership creating a shared vision of the final outcome and this will put them in a strong position when the formal procurement process commences.
We would think that scenario two would appeal to many suppliers as it leads to more business for them and more happy customers but, to enjoy the benefits of this approach, one important change in thinking needs to be made. Many companies now focus their sales and selling efforts on working with prospects that have an actual and current requirement. If this is your situation then you will rarely engage with a prospect before the requirement has been defined internally which means you will miss out on the opportunity to build the relationships before procurement commences. This also means you will probably end up fighting over that last 24% of potential new business.
So, the question is; are you willing to change your go-to-market approach and modify the objectives and incentives of your sales people to encourage them to build relationships rather than simply chase already defined requirements?
In his article Richard makes the point that “Any sales training consultancy would claim that they train sales people to be customer focused.” In most cases this is based upon the supplier’s view as to what customer focus should look like. Real customer focus is demonstrated by those suppliers who are willing to let the end user have a say in what they want the supplier to focus upon and how (part of the Identify stage).
In summary; our current experience demonstrates that the optimum go-to-market model for a supplier in the 21st century is a proactive outbound strategy designed to engage widely across the prospect organisation before the formal procurement process begins. In working with the user community the model should be focused on demonstrating the Unique Value Proposition the supplier can deliver but that UVP should be arrived at cooperatively with the prospect rather than being assumed and imposed by the supplier.
This is a simple but powerful approach to supplier/customer relationships that we know works – if you haven’t already, why not try it?