Several of my clients are frequently asked to submit a proposal in order to be considered as the supplier for an upcoming project. I believe that before proceeding, several questions should be asked, the most important of which are listed here.
Is this a real opportunity for you or just an exercise for them to internally justify their current supplier? Who is their current supplier? Why are they considering making a change? Will that new manager really take a chance and allow a change with a provider early in his tenure? What criteria will they use to determine which supplier to work with? How will price factor in? Why would they bring in a new supplier when that represents change and change is hard?
What are the odds of your winning the business? You should have a good sense of this based on your previous conversations and tracked history of success with the company. At some point, it becomes futile to continue to work at acquiring business you have little chance of getting, no matter how sexy it seems. Get input from your team, define these parameters, and stick to them.
What lines have you established that you absolutely won’t cross to win business?
Are these clearly defined and in writing? Is your entire team aware of those lines and do they buy in to them and uphold them unreservedly? Are there exceptions that you’d be willing to make, and if so, in which circumstances?
What other filters do you have in place to determine your opportunity costs?
How much time will your team have to devote to complete the required specs by the due date? One of my prospects is constantly in the middle of answering rfp requests and, since they’re relatively small, these requests consume most of the owner’s time. If management needs to be involved, how will their shift in focus affect the team? To what extent will team members need to be involved? Will their personal time be impacted? What other projects will have to be put on hold while the proposal is completed? What will management have to delegate and how will that affect others?
Is this upfront work a financial investment or expense? That depends on why you’ve determined it’s important to respond. Being a go-to provider for a large manufacturing company may sound ideal in theory yet not be in practice. Do you have the only or best turnkey solution? Are you helping them create the specs? Do you need to leverage that relationship to gain other business and credibility in the market? Does your team agree with your rationale? Thoroughly review all of the costs you’ll incur if you’re selected, making sure your desired profits can be met.
We all need to generate new business. Let’s be sure we’re spending our time and resources productively on the opportunities that best fit our business models and allow us to attain the short and long-term profits we desire and deserve.
Recently I heard a statistic that 65% of all college graduates who find jobs do so because someone referred them to the hiring manager. I would venture a guess that this percentage is even higher in business. In mine it’s 75% currently and I fully expect that to increase over time.
Since referrals are so critical to each of us we need to understand the importance of developing and nurturing relationships at every possible level within our client’s organizations, especially our key and target accounts.
Consider the depth of your contacts. Say you primarily work with one or two departments, do you know everyone in those departments? Everyone? If so, you’ve achieved 100% depth of contact and you need to work continually to strengthen those relationships. If not, you should make an attempt to get to know those you’ve not met within the next 30 days.
Next, consider the breadth of your contacts. If you have a good working relationship with one manager or team, how many other managers or teams might become clients? Identify these and make a plan to get introductions, recommendations or referrals from your existing contacts within the next 30 days. If your company should be doing business with five divisions and currently works with three, there’s untapped potential that you should make a targeted priority for growth.
The depth of your contacts will determine the breadth of your contacts. It will always be true that the more people you know in one department, the more people you’ll gain access to in others. Strive for 100% depth of contact.
That brings us to the next layer of questions. Who are the people that you know that no one else knows? Who are the people that you have the best relationships with? Who are the people they might introduce you to? How else might you leverage those relationships? Can you refer them business? Can you introduce them to another company that would be a good strategic alliance?
In addition to the ‘who you know’ is the ‘what you know’. What have you learned about your client personally? How about their business, industry, market trends, etc., that no one else knows? Anything? What are you doing with that information? How might you leverage that knowledge to further solidify your relationships and deepen their trust in you? Can they share confidences with you without reservation? How might you personally help them be more successful?
The whole point of having deep and broad connections is to provide insight, offer help and solutions and become a valued source to your client’s entire organization. You want your company to be the one they turn to first. When you can accomplish that, you’ll have the ‘in’ your competition can only dream about.
So your prospect has granted you an appointment and asked you to present your ideas. Sounds like you're one step closer to a sale, but are you really? Before you ever make a presentation and share your pricing answer these italicized questions.
What are their specific needs?
Comments like: "we're experiencing some difficulty with our current supplier"; "we're planning budgets and need to understand all of our options"; "we need more storage space and are ready to upgrade", are not real needs. They are only indicators of underlying issues, nothing more. Ask questions like these to determine needs.
What does 'difficulty with your current supplier' mean exactly? How is that impacting your business? Your team? Your efficiencies?
When you assessed your current system, what was lacking? How would having those items help you and impact your bottom line?
Why is it that you need more storage space? What happens if you don't expand? If they don't admit to having a need, you can stop the conversation right there, they won't make a purchase.
What's their budget?
If they won't share a budget with you, beware. Anyone who is planning a purchase has an idea of what they'll spend and if they're truly in the market to buy, they'll give you a dollar figure. If they won't, they aren't serious about buying. You can give them some price ranges based on other customers in similar situations to see if they'll at least agree to a range they'd spend. If they have no money, they can't buy, so move on.
When will they make the purchase?
Is there a malfunction resulting in an immediate need for replacement? Are they planning to expand in the next six months? When you hear 'we're in the market, or looking to buy, or need three bids', realize that doesn't really mean they'll be purchasing anything any time soon. Ask:
Why now? Why then? So, what happens if you wait another six months? Understanding the real timeline allows you to properly forecast. Don't kid yourself, if they can wait to make the purchase, they likely will.
Who will make the final decision?
You need to understand who is involved in deciding which supplier is selected. Present to the decision maker(s). Ask:
Who else will assist you in making the final decision? How about anyone else? So, when will I be presenting to the group?
Stand firm on this, you want to present to the decision makers so you're the one to answer questions, etc. If you haven't been speaking with the decision maker you need to get face time with them and start over at the top with your questions and get confirmation of what you've learned from others.
Take the time to get these answers. That's when you'll be one step closer to making the sale.
Many times business owners tell me that they are quite content with their current sales volume. Or, I'll read about a company's rapid rate of growth and subsequent expansion plans. In both instances, I always wonder about a few things.
Is their growth due mostly to:
1) current demand/need for their product/service?; or
2) the incredible expertise of their sales team?; and, if their sellers are really that great, do they understand why?
If product innovation is what drives your success, understanding your target market and business landscape are critical. Since every product has a life cycle it's inevitable that demand will slow or subside at some point. Think pharmaceuticals. A newly released and highly desired drug can catapult sales to levels never before realized and the sales team really has little or nothing to do with results. These sales are transactional and short-term. Once patents expire and generics become available, sales likely drop off. (Lipitor, for example.) Enter the need for a different type of seller if the original product is still to be manufactured. Enter the need for consistent development of innovative new products to replace revenues.
If your sales team is the driving force behind your success, be sure you understand what makes them 'tick', so to speak. Are they transactional (order fillers/takers); consultative (good at longer-term selling); persuasive closers (good at shortening the sales cycle); drivers (good at asking for the order, may offend); or relationship oriented (form connections, but not necessarily at a deep level)? Each type will generate different results for you at differing speeds. If you offer multiple products with varying sales cycles, you need a sales team with varying talents and skills.
You may believe you know your team's abilities. I offer that what you know is subjective, i.e., witnessed behaviors and actions. The only way to be absolutely certain is to add objectivity. That's where science comes in.
Assess your team to understand their individual strengths and growth
opportunities and the amount of effort they're likely to give. Be sure to use only predictive assessments that indicate whether they'll succeed in your role, and with your manager, team and culture. There are many tools on the market, the majority describe styles and behaviors but aren't necessarily tied to a specific outcome. Only a few are actually predictive relative to high performance.
Knowing the inherent talents, beliefs and skills of your top performers will keep you focused when recruiting and hiring. It allows you to have a talent identification plan in place to find the candidate best suited to your needs. Without that information the longer a position remains unfilled, the better all candidates begin to look and hiring mistakes are made.
Your development, training and coaching efforts will also become more focused resulting in fully engaged sales people and that will always lead to growth.
Invest primarily in innovation if products drive your success. Invest primarily in assessing, training and developing if your sales team drives it; their growth will equate to your growth.