One of the key concerns of the sales team I advise is the increase in projects requiring multiple bidders. As a result, the cost of customer acquisition is on the rise. We all talk about the commoditization of products and even services, but I think we should also focus on the commoditization of the proposal itself. I am not going to suggest that you charge for proposals – I think that is still a non-starter! However, rather than give quotes away – often indiscriminately writing one for any opportunity – sales representatives should emphasize the scarcity of their proposals.
Is your product scarce enough to be valuable?
Maximizing your proposal efforts begins with explaining to the customer that not all RFP’s (requests for proposal) are responded to. Resist the opportunity to crank out a quote unless it meets all three of the following criteria:
Suitability, Winnability, and Scarcity.
Customer: “Can I get a quote?”
You: “I would like to provide one if it makes sense for both of us. First, help me understand more about your needs.”
Most of us already ask for a meeting or conversation before processing an RFP, but is that enough?
Being all things to all people is a problem if you seek a less commoditized bidding process. The first test is to assess the customer and the project to learn if you are even right for the job, but more importantly how many other companies would be suitable as well. If the pool of potential bidders is large, then your challenge is to somehow shrink that pool by asking the right questions and identifying the key challenges that the customer may be overlooking. In short, influence a change in the request for proposal to favor fewer competitors. If there is no opportunity to do this, then chances are that any further effort up to and including writing a proposal will be wasted. Save time and money by declining at this time.
“I’m so glad you included us in this process, but based on the needs assessment this is a project that many companies can easily perform.”
Once the project passes the Suitability test, then the next step is the Winnability analysis. This is also part of the standard qualifying process, but in the effort to create more revenue opportunities, many sales organizations fudge this criteria. If your company believes that it should never be the lowest bidder (or simply can’t be because of your cost structure and quality), then a buyer that is focused on price is an automatic disqualification. Yet, many sellers will submit an expensive proposal and trust that their thoughtful narrative will win the buying committee over. Bottom line: if winning the project is dependent on your proposal’s performance and price is the key consideration to the buyer – then mostly likely the project is not winnable for you.
Don’t write a proposal for a project unless you know that you can and should win.
“Upon review we agree that this is project that will invite a lot of price-competitive quoting. Unfortunately that eliminates our company from the running.”
If on the other hand, the buyer is focused on value and is interested in ways that you can enhance the outcome, then move on to the next qualifier.
Assuming that you have vetted this project as suitable and winnable, then it is time to introduce an intangible value to the discussion. It allows you to deviate from the bid specification without disqualification. Some aspect of your offering is not only valuable to the goals of the project, it resides only in your company. Is there a service, product, or process that only you can provide? Are you the definitive expert in this kind of job? Are you the incumbent provider?
Scarcity is what ensures that your proposal will be given due consideration.
Successfully selling Scarcity requires a modicum of self-awareness and outright honesty with the customer. Do you know enough about your skills and those of your competitors and are you fair (and unemotional) in how you evaluate both? Can you frankly identify where the client is misjudging their needs and point that out in a constructive manner?
“The project you have presented to us is very attractive on many levels, but what speaks most to us is [insert overlooked critical element here]. We feel like the success of the project hinges on this item for these reasons [insert consequences of not overlooking this need]. Do you agree?”
The client may not agree and now you know that you will not have a unique position upon which to build your proposal. Truly disciplined selling organizations will decline at this point.
On the other hand, if you have determined that the project and client are worthy of your proposal, the real work – and expense – begins. The next step may not even be a proposal; it could involve a capabilities pitch, which could even be the fourth qualifier on a major project. Requiring a potential client to visit your facility and see and hear what you are capable of is a fair request when big money is on the line. In conclusion, the harder you work to disqualify bid requests, the more productive you can be on the best opportunities.
Tom Stimson MBA, CTS helps owners and management teams rediscover the fun and profit that comes from making better decisions about smarter goals. He is an expert on project-based selling and a thought leader for innovative business processes. Since 2006, Tom has successfully advised over two hundred companies and organizations on business strategy, process, marketing, and sales. Learn More at TRSTIMSON.COM