-->

Not different - better

Are ‘alternative’ tender bids worth your time and energy? Frequently, no. Here’s why, and what you can do instead to make your bid more competitive.

You may have noticed that some Request for Tender documents offer the option of submitting a compliant and an ‘alternative’ bid. Often, the alternative bid will only be assessed if a compliant bid is submitted as well.

Should you go to the effort of developing an alternative bid, on top of your compliant bid?  

And if not, what other options do you have instead?  

The psychology of complex decisions

First, let’s look how people make complex decisions, particularly where there is risk involved. Buyers who are evaluating competitive tenders are in exactly this situation.

Prospect Theory, developed by Daniel Kahneman and Amos Tversky, explains how people choose between different options (‘prospects’), and how we estimate the perceived likelihood of each of these options. In 2002, Kahneman won the Nobel Prize in economics for this work.

Prospect Theory suggests that in making choices, we are influenced by several factors, including our level of certainty in the outcome, a preference for avoiding loss, and what they call the ‘isolation effect’:

  1. Certainty - we would rather accept a small but certain reward over a chance at a larger gain; 

  2. Loss aversion – we tend to focus on minimising losses, even where the probability of those losses is small; and

  3. The isolation effect – we tend to disregard any elements that are common to more than one option, in an effort to simplify, and focus on what is different.

Live experiments using Prospect Theory have shown that when choosing among several alternatives, people will tend to avoid losses, and optimise for certain gains. This is particularly true in high-stakes and complex decisions, where the pain of potential loss has more effect than any potential satisfaction that may come from an equivalent level of gain.  

The value of alternatives

So how can you help your customer to make a good choice – in your favour – and one that makes them feel that they are avoiding losses, while achieving a definite level of gain? 

One way is to offer alternatives and options within your own offer, rather than just being one of many companies competing for their business.  

To avoid overburdening the customer, you might offer a choice among three options, in ascending level of cost and value. This approach has a proven track record in consumer markets, and is also known as the ‘good, better, best’ pricing strategy.

Offering three options has the advantage of giving the customer a ‘choice of yeses’, rather than the more binary ‘yes/no’ of a single option.

Pricing consultant Rafi Mohammed, writing in Harvard Business Review, says:

“...when faced with multiple options, customers tend to decide more quickly whether they are going to buy something, using their remaining time to focus on what. Having made that mental shift, they typically treat the Good version as a sunk cost, which makes them more amenable to upgrading. Salespeople exploit this tendency all the time: For example, instead of detailing all the features of a $1,200 appliance, they emphasize that “for only $200 more” than the entry-level $1,000 unit, a buyer gets lots of extra bells and whistles. Rental car companies highlight the full-size sedan you could be driving for $12 a day more than the price of a subcompact car.”

Prospect Theory and alternatives in the context of competitive bids and tenders

When a buyer puts a Request for Tender out to market, they have (usually) gone to some lengths to decide on what they’re going to buy.  

As you may have discovered, it’s hard to completely change their minds at this late stage of their buying journey.  

There are just too many hurdles they would need to jump to entertain a solution that is radically different from the one they are expecting. 

In this situation, Prospect Theory indicates that we should optimise our offer to avoid losses and deliver certain gains to the customer. More than one option could be part of this offer. 

However, adopting three options - a ‘good, better, best’ strategy - is not necessarily the answer in competitive tenders, particularly if your ‘best’ offer will require a lot of work on your part to submit an alternative bid.

Let’s think of your compliant proposal as your ‘Good’ (or entry level) offer. Your Good tender bid should give the customer everything they’ve asked for, at your sharpest possible price. From a psychological perspective, this is the buyer’s sunk cost – the thing they’ve already ‘bought’ by writing a tender specification. A Good bid means you’re in with a chance, but this field will be very competitive. 

Because you’re the expert in what you do, you might want to do things differently to what the customer has asked for, in order to deliver what you consider the ‘Best’ (or premium) result.

There’s a risk in this though, as it will most likely involve deviating from the scope or specifications to make an alternative proposal. In a competitive tender, you’ll need to decide whether this is really worth your time.  

Is it worth developing a completely separate tender bid for a customer who hasn’t asked for it, is already fairly fixed in what they want to buy, and is formally evaluating multiple other offers, as well as yours.  

Enter the Upgraded Compliant tender bid

Competitive tenders usually involve a high-value, complex purchase for the buyer, and a lot more work for you as the seller. 

Rather than simply submitting a Compliant (‘Good’) tender bid, you may be able to pull ahead of the competition with an Upgraded Compliant bid that offers something tempting – and better – than they are expecting, but that doesn’t ask them to change their specifications in any meaningful way. 

This is a ‘Better’ tender bid for you, and them, because it doesn’t stretch their decision-making faculties past the point of comfort.

In developing your Upgraded Compliant tender bid: 

  1. Don’t forget that the customer’s primary need is to avoid losses. Avoid trade-offs against the scope of work, unless you can prove these are minor and won’t affect the outcome or the cost. 

  2. Identify three certain gains that you can deliver, preferably gains that competitors can’t offer (or won’t have thought of) and that don’t cost you, or the customer, extra. No one likes to pay more, but everyone loves an upgrade. 

  3. Gains should be proportionate to the size of the opportunity – higher in perceived value for more lucrative contracts - while also minimising the effort on the customer’s part to realise them. 

A word of warning, though; this is all about the decision-making behind your bid strategy, not the mechanics.  

Every tender request has different requirements, so make sure to check yours carefully to make sure that your Upgraded Compliant bid will still comply, and won’t be thrown out for being non-conforming. 

When is a proposal not a proposal?

A proposal is a commercial document, written with the sole purpose of convincing a potential customer to say "yes" to you. To achieve this result, proposals need three things – style, substance, and relevance.  

Style isn’t just about how the proposal looks; it’s about how it sounds, the stories that it tells, and how it makes the buyer feel.

Substance is the content of the proposal; it outlines the offer you are making to the buyer in enough detail that they can understand what they’re actually getting from you.

Relevance is the “fit” between your offer and how well it solves the customer’s problem, or, delivers something that they aspire to.

You’ll run into problems whenever any one of these elements is lacking.

Where there’s style and substance, but no specific relevance to the customer, you may as well be handing them a brochure. 

Brochures are generic documents. They may look and sound great, but what’s in them could apply to anyone – and often ends up appealing to no one.

If your business is in tourism or the retail trade, by all means, go ahead with a brochure. Brochures are a valuable part of the marketing mix in these sectors. 

But if you’re selling to business or to government, don’t bother. According to a study by Sirius Decisions, up to 70% of content and collateral created by marketing departments in business-to-business organisations sits unused.  There are much better places to spend your time and energy.

Where there’s substance and relevance, but a lack of style, customers read the proposal as if it’s a report.

Reports may be useful after your work has been completed, but they’re counterproductive before this.  

Customers are accustomed to treating a report as a set of recommendations, not all of which may be adopted. This is the exact opposite of what you want your proposal to achieve.

Finally, where there is style and relevance, but no substance, you’ve got yourself a presentation. This won’t work either.

In his book Pitch Anything, Oren Klaff - a venture capital consultant who pitches multi-million dollar deals for a living - found out the hard way that customers see sales presentations as “the morning’s entertainment”; a pleasant enough way to spend an hour, maybe even to learn something new, but probably not to buy anything.

If you’d rather be selling something instead, make sure your proposal gives the customer an offer they can actually buy.

Crap in, crap out

You can’t polish a turd. But unfortunately, one of the loudest and most consistent complaints I hear from proposal teams is about exactly this: getting a huge dump of crappy content at the last minute, from the very people in the business that they are trying to win work for.

Here are just a few ways that this frustration is playing out, right now, in organisations around the world:

The screed…

“Here’s one I wrote (three years ago) for another (vaguely similar, 100-page) proposal. There might be something in there you can use.”

The handball…

“Fred wrote about this in the XXX proposal. Can you ask him instead?”

The absentee (after two reminders)…

“Sorry! I completely forgot about this. What do you need me to do again?”

And let’s not overlook the passive-aggressive pushback, after four reminders, and three days after the deadline…

“I’ve been out on site for 14 days straight in outer Timbuktu and without wi-fi OR a shower. I might be able to get something to you next week.” (Just kidding! - don’t bet on it).

In my experience, there are three main reasons why this happens:

1.     Lack of skills,

2.     Lack of time, and

3.     Lack of responsibility

First, there’s a lack of skills.

Most people aren’t taught to write proposals. They learn the hard way through losses, disappointments, and kilos of red pen and criticism from higher-ups.

Many would also much rather talk than write. It’s no wonder they see proposals as a brain-draining, mind-numbing chore instead of as an exciting opportunity to win new work.

In my proposals training programs, I’ve seen a massive mindset and cultural shift among teams who previously thought this way. Training is not the only solution to the problem, but it is a very good place to start.

Next, there is always a lack of time.

Proposal deadlines have shrunk by half in the last decade, and in most organisations, there are only a handful of people who work on proposals full time.

For everyone else, it’s work that gets done ‘five to nine’ in the cracks and crannies that open up around their day job. Expecting them to produce considered, customer-focused content in this environment is a recipe for burnout and disengagement.

One simple fix is to allow people to block out time for proposal writing in their diaries – time that can’t be booked over by meetings and other priorities. Another is to reward them for their hard work, no matter what the outcome, and always make sure there is a real celebration when you win. 

And finally, there’s a lack of responsibility.

If I have learned anything from decades on this planet, it’s this: people do what they feel inclined to do.

Unfortunately, unless it is their actual job, most people just don’t feel inclined to work on proposals unless they are compelled to. After all, there are many more pressing technical and operational issues to deal with, as well as work that’s much more fun on offer somewhere else.

This leaves your proposals team begging for content and commitment when they really shouldn’t have to.

Take a look at the job descriptions of the subject matter experts and managers you most rely on for content and proposal leadership. Is contribution to proposals mentioned anywhere? No? Fix that - now.

Conversation versus presentation

A proposal is really just a conversation with a customer, albeit one where you have to fill in both sides.

Most of us would much rather talk to a customer than submit a proposal, because verbal conversations offer a feedback loop that written presentations (like proposals) do not.

In a conversation, you can get started with just a general idea of what you want to achieve. Then you can go where the conversation takes you.

Provided that you are tuned in to the customer’s reactions, it is easy to pick up when your ideas have landed and when they haven’t. It is no problem to float new ideas and try out options. The customer’s body language, tone of voice and questions will also help you to find and correct any gaps and misunderstandings.

On the other hand, in a presentation, like a proposal, you need to know exactly what you want to achieve and be well prepared before you start.

In the absence of verbal and non-verbal feedback, you will need to outline what has already been agreed, or put forward a range of well thought-out options and alternatives. And with no room for gaps and misunderstandings, your offer will need to be complete - and absolutely clear - to have any chance of being well received.

With so much on the line, it’s no wonder you would prefer to have a conversation!

So when a proposal is the only option - like when you are bidding for a competitive tender - here are three ways to make your proposal feel more like a conversation, and less like a presentation.

  1. Less boasting. Going on and on about every project you have ever done isn’t only unnecessary, it also comes across like you are catcalling at the customer from a moving car. You’ve already got their attention. Use it to engage them in their favourite topic - themselves. 
  2. Less begging. Feeling insecure? You shouldn’t be. Just because the customer has the money, doesn’t mean they have all the answers. They want or need something, and you can deliver it. Treat your proposal as a conversation of equals, and ban subservient and conditional language (like ‘would’ and ‘could’).
  3. More sharing. In The Challenger Sale: Taking Control of the Customer Conversation, Matthew Dixon and Brent Adamson set out a solid base of research proving that customers value suppliers who challenge the way they think about how they can compete better or do business better. Although they may appreciate you confirming what they already know, Dixon and Adamson’s research found that there is vastly greater value in delivering insight that changes or builds on the customer’s knowledge in ways they could not have discovered on their own. You and your team are smart people and you know a lot that your customers don’t know. Impress them by sharing how you can help.

Building your proposal muscle

Getting better at proposals is like building muscle. It takes time, it takes practice, and it takes effort.

When I teach people new ways to develop proposal strategy, answer buyer questions, substantiate claims with evidence, write persuasively, or target their effort where it will help them to win, some ‘get it’ immediately; some take a little longer; and some may struggle without extra help.

If you have ever attended an inspiring training program, been super-motivated to do things better – and then ended up back in ‘business as usual’ – there is a reason for that.

The 70/20/10 model of learning & development was first developed by Morgan McCall and the Centre for Creative Leadership in the 1980s. It suggests that:

  • 70% of learning is experiential, occurring through daily tasks, challenges and practice;
  • 20% of learning is social, occurring with and through other people, like mentors, managers and co-workers; and
  • Only 10% of learning is formal, occurring through structured training courses and programs.

The 70/20/10 model acknowledges that while learning comes from many sources, experience is still the best teacher, and the most effective learning comes from doing –not simply knowing what to do.

However, formal learning remains dominant in most organisations. It’s easy to budget for workshop-based training. Workshops don’t take people away from their day job for too long.

And there is also the potential for workshops to deliver a lot of information, coupled with a boost to motivation, which builds new skills in a very short space of time.

Here are five ways to build your proposal muscle after attending proposal training.

  1. Revisit your learning. Pull out your workbooks, slides and notes from the session. Repeat the exercises. Re-read the examples, paying particular attention to the framework (not just the content).
  2. Implement useful tools, templates and processes. My proposal training programs offer new ways to organise your workflow, and methodologies that get better results in less time. Revisit these, choose which ones will work best for your business - and use them.
  3. Share what you learned with colleagues. One of the best ways to learn is to teach.
  4. Set yourself experiential challenges. Which proposal skills do you most want to improve? Make a list in priority order, and challenge yourself to work on one new skill a week.
  5. Find a mentor. A mentor is someone who has walked the path before, and can accelerate your success by busting problems, sharing tips and tricks, and offering a sounding board for your ideas.  This could be someone in your business, or an external proposals coach like me.

Have you done enough?

It is hard to avoid MasterChef on Australian TV right now, even if you’re not much chop in the kitchen.

MasterChef has been on our screens for the past ten years. It’s also on five nights a week during prime time – a saturation level of exposure.

The show is so popular that Prince Charles and the Duchess of Cornwall even made an appearance this season (apparently Camilla is a big fan).

Though not much of a cook myself, something I find really fascinating about MasterChef is how it represents the pressure-cooker atmosphere of intense competition.

MasterChef is filmed in a big hall with an open-plan cooking environment. Each of the contestants cooks at their own bench about six feet away from the others, and can clearly see what everyone else is doing.

In such an environment, MasterChef contestants are never allowed to forget that this is a competition, and that their dishes are going to be judged against other people's.

When the judges shout ‘stop cooking!’, and the adrenalin of intense pressure fades, anxiety starts to set in. It’s then that you will often hear a contestant say:

"I hope I've done enough.”

I hope I have done enough this cook, this day, to make it through the elimination and to please the judges.

This is a mindset that those of us who work on bids and tenders can learn from.

While you’re working on a bid, locked away in your war room (if you're lucky), or your cubicle (if you're unlucky), it is easy to forget that there are others out there doing the same. Maybe a handful, maybe hundreds; all of whom really want this business too.

In answering the question, "have I done enough?" you will need to consider not only what you are doing, but what others are likely to do as well.

Fortunes can change quickly in a bidding environment, and many of the people who approach me for help with their bids and tenders are new to the experience of feeling that they need it.

Everything was working fine, they were winning their fair share of business, and then something changes.

A competitor lifts their game. And what happens to your game? It automatically drops as a result.

This is why it is so important to continually re-invest in your proposal effort.

Because if you don't, it doesn't matter how good it was yesterday, or three months ago, or six months ago – it is not going to be enough to keep you winning forever.

How long should your proposal be?

One of the most common questions I am asked about proposals is ‘how long does my proposal need to be?’ The answer is, ‘only as long as it takes to get you hired’. 

Every week, I conduct independent reviews of proposals (both successful and unsuccessful) for organisations who find it impossible to get good feedback from customers, and are keen to improve their success rates.

One of the consistent findings from these reviews is that shorter proposals are usually more successful than very long ones.

That’s because a proposal is a commercial document with only one purpose; to have the customer say ‘yes’ to you. Anything that doesn’t fit this purpose – like including irrelevant material, or long, wordy descriptions of your credentials or methodology – gives the customer reasons to say ‘no’ to you instead. 

Recently, I conducted a study into supplier experiences of competitive tendering and dealing with procurement. A summary of the report from this study, Smiling But Sinking, was published by SmartCompany

One of the most striking findings from the study was how fast proposal deadlines are shrinking, and suppliers are now given only half the time that they believe they need.

About a decade ago, the most common timeframe given to respond to a competitive tender was about four weeks, but this has changed.

Most participants said that they are now given two weeks to respond to a tender in their business or industry (52.8%), while almost the same percentage (50%) said that they believe four weeks is a reasonable timeframe.  

97.6% agreed that tender deadlines are getting shorter, while response requirements either have not changed or have increased.

You’d think that shorter deadlines would be a good thing, because this would result in shorter proposals. Instead, we are seeing the opposite.

Shorter deadlines are delivering longer, more generic, and more confusing proposals, rather than shorter, more customer-specific and more relevant ones.

  • In our time-poor state, we are becoming even more reliant on canned content that is copied and pasted from previous submissions, regardless of how relevant it is.
  • With less time to plan and build win strategies, we are also becoming more anxious, throwing everything but the kitchen sink into the proposal just in case it later proves to be important. 
  • We have less time than ever to edit our proposals and remove superfluous material. (An age-old problem: 17th century inventor Blaise Pascale famously said, “I have made this letter longer than usual, as I have not had time to make it shorter”).

Time is the new money.

Respect the customer’s time, and your own time, by spending it where it will matter most – on giving them reasons to hire you.

Sell the job before you do the job

In my proposal-writing workshops, I train hundreds of technical professionals every year, including engineers, architects, project managers, environmental scientists, quantity surveyors, and market researchers.

When I ask them what they like the most about proposals (apart from ‘winning them’), they will usually say ‘designing the methodology’, or ‘coming up with the price’.

Technical professionals don’t see themselves as salespeople, and may argue that they didn’t work for years to get good at their job so they could become one.

In reality, technical professionals have to win the job before they get to do the job. This means that their ability to successfully pitch for work has a profound impact on their job satisfaction, and impact they can make in their chosen career.

However, writing successful proposals requires a different skillset to the technical skillset with which they approach their other work.

When preparing a pitch or proposal, a technical professional who prioritises the work, and focuses mostly on themselves and the way they will do it, comes across as a ‘boffin’.  Unless they have exceptional technical skills, boffins are likely to find themselves stuck doing routine work because they are not seen as customer friendly.

A professional who prioritises the technical work, but focuses on the customer, is seen as a ‘craftsman’.  Customers appreciate craftsmen and their obvious pride in their work, but aren’t always prepared to pay a premium for it.

In contrast, a professional who prioritises the commercial outcome, but focuses mostly on themselves, will come across as a ‘salesman’. This is an uncomfortable position that most technical professionals will actively avoid.

Fortunately, those who are able to prioritise both the commercial outcome, and the customer, will be seen as a ‘champion.’ These are the technical professionals that customers really value – and want to hire again and again.

champion_boffin.png

To win the work you deserve to win, a technical professional needs to be commercially smart, not just technically smart.

This means a shift from seeing opportunities mostly from your own perspective, and with the work as your priority, to seeing things from the customer’s perspective, and giving your best thinking to the outcomes that the work will achieve.

What job did you hire that product to do?

Here is an idea that may change the way you sell – and buy. 

Customers don’t simply buy products and services, they ‘hire’ them to do a job. Therefore it’s not enough just to understand customers – we must also understand the jobs they need to be done. 

This is the argument put forward by Harvard professor Clayton M. Christensen in Competing Against Luck – The Story of Innovation and Customer Choice

Christensen developed the theory of disruptive innovation in 1995, and has since written 12 books on the topic of innovation in business.

Recently, however, after decades of research, Christensen and his co-authors on Competing Against Luck came to an important conclusion: our long-held belief, that understanding the customer is the secret to successful innovation in business, is wrong. 

Christensen explains a ‘job’ as the progress that a person is trying to make in a particular circumstance. That ‘circumstance’ is intrinsic to their definition of a job. A job can only be defined, and a successful solution created, relative to the specific context in which it arises. When we buy a product or service, we are ‘hiring’ a way of getting that job done. 

For example, let’s say you are the owner of a business that wants to grow but is struggling to keep up with demand. You have poured a lot of time and money into the business and are desperate to see it succeed. The underlying ‘circumstance’ is the need to justify your investment, while also keeping customers and staff happy so that the business is sustainable. Therefore, your ‘jobs’ might be to find a way to take more customer calls, boost flagging staff morale, or fill last-minute product orders.

There are a number of products and services you could ‘hire’ to solve each of these jobs. Some will fit the underlying circumstances better than others. If you hire them and they work, you’re likely to hire them again. And if they don’t, you will look around for other options.

According to Christensen, customer choice is about progress, not products.

His Theory of Jobs To Be Done focuses on deeply understanding your customer’s struggle for progress, and then creating the right solution and attendant set of experiences to ensure that you solve your customer’s jobs well, every time. 

This methodology has been successfully implemented by respected companies and fast-growing start-ups including Amazon, Intuit, Uber, and Airbnb. 

By understanding why customers to “hire” a product or service, any business can improve its sales by creating products and services that customers not only want to hire, but that they will pay premium prices for. 

The Theory of Jobs To Be Done is just one of the applied methodologies we cover in the Win More Work With Existing Customers training program, which will give you a solid understanding of what drives your customers’ wants and needs, and help you build a commercial value proposition that delivers them. 

This workshop is only two weeks away, so don’t miss your last chance to book.

Are you living the same frustrations over and over?

Selling can be frustrating sometimes. We can’t change what customers do. We can’t change what competitors do either. But we can change the way we show up ourselves, and in the process, get a better outcome.

The Bill Murray comedy movie Groundhog Day turns 25 this year. It has become a classic not just because it’s funny, but because we have all had that experience of being stuck in a pattern that we simply cannot break out of.

Recently I was stranded at Tamworth Airport for four hours, waiting for a new plane to arrive. The snack bar was shut, and Groundhog Day was the only movie I had on my iPad.

As the movie started to roll, I realised it actually was Groundhog Day (February 2). Instead of a Philadelphia winter, Tamworth was sweltering through a blistering New England summer– parts of the region were entering their 40th consecutive day over 35 degrees.

While my fellow stranded passengers and I were wishing for air-con, Bill Murray trudged through the snow as Phil Connors, a weatherman sent to Punxatawney, Philadelphia each year, to cover the annual Groundhog Day festival.

Phil hates the festival, is rude and dismissive of everyone he meets, and generally just a pain in the butt to be around.

To cut a long story short, the next morning Phil and his crew find themselves waking up at 6am to Groundhog Day again.

The same events repeat that day, and every day after that. Pretty soon, Phil has had enough. Even after driving off a cliff in frustration, he just keeps up waking up every day, the same day, at 6am.

Eventually, Phil starts noticing other people and starts becoming a nicer person. He brings coffee and pastries to his crew, he buys food for a homeless man, and he stops to help three elderly ladies with their broken down car.

In the end, everyone loves Phil. He gets the life he wants, and finally the day stops repeating.

Groundhog Day shows us that we can’t always change our circumstances. We can’t change what other people do. But we can change ourselves, and when we do, we create the space for good things to happen.

It may sound obvious, but if what you’re doing to sell your service or product is not achieving the results you believe you deserve, maybe you need to change something.

Success in sales is really just a case of ready, aim and fire. If your sales pitch isn’t connecting, there’s a good chance you are spending too much time in the ‘aim and fire’ part – targeting customers and firing off pitches, proposals and presentations that simply are not hitting the mark.

Taking the time to rebuild your commercial value proposition – how to talk about what you do so customers want to buy it – could be all it takes to stop you living the same frustrations

over and over again.

Are you plugged in to your customers’ goals?

Here is a dystopian future scenario for you.

No longer content with making suppliers respond to tenders and sign complex service level agreements, customers have now implemented a new, far-reaching regime to test how well their suppliers are performing.

Supplier performance testing can take place at any time, and take almost any form.

In the next 30 seconds, you will get a pop quiz in your inbox from one of your biggest customers. The quiz asks you to name and describe the customer’s top three goals for their business over the next 12 months.

Earlier this morning, all publicly available information on this topic was temporarily removed from the internet, so a quick Google search is not an option.

Would you pass the test? How many of the customer’s goals could you name without checking, and how many could you explain back to them in detail?

When I put this question to people who are hoping to retain and grow their major accounts, many of them find it hard to answer.

  • They have never read the customer’s annual report or strategic plan.
  • They haven’t checked out the customer’s website to find out what is new in their world.
  • They aren’t in the habit of asking their direct customer contacts about what they are personally responsible for, or what they will need to deliver over the next 12 months.
  • That’s a pity, because customers not only appreciate it when we know this stuff, they actually expect us to know.

According to Bain & Company, originators of the Net Promoter Score (one of the most common methods for assessing customer satisfaction and loyalty), these are the top four questions that business and government questions are asking about their suppliers:

  1. Do they create economic and strategic value for our business?
  2. Do they simplify our daily operations (and my own work life)?
  3. Can I trust them?
  4. Do I like working with them?

This also fits with what we now know is the most successful approach to business-to-business and business-to-government sales.

Five years ago, Matthew Dixon and Brent Adamson, authors of The Challenger Sale, were interested in finding out why some salespeople were still making their targets during the global financial crisis, while customers were shutting their wallets to everyone else.

They found that customers will award business to salespeople who they feel can help them to compete better or do business better. This makes intuitive sense, but in practice, it’s not easy to achieve.

To win more work with your existing customers, you first need to appreciate what it will take to be their preferred supplier.

If you don’t know what their goals are, or what they are on the line to deliver this year, just ask them – before they decide to ask you. 

The next big thing

How do you win a tender with a customer you already have? This is a challenge for anyone who works in a project-based industry, where good work on a current project is no guarantee you’ll be successful in winning the next one.

Chasing new business is expensive. According to Gartner, it costs 5-30 times as much to win a new customer as it does to keep an existing one happy.

Nurturing existing customers will also grow your profitability: Bain & Company found that a 5% increase in retention can lead to a 25%-95% boost in profit.

However, customer retention and growth is a real challenge for people who need to win work on a project basis, including technical professionals like engineers and architects, creative professionals like event managers and graphic designers, market researchers, and project management consultants.

Despite doing good work and having good relationships with their existing customers, project-based professionals constantly need to pitch these customers for new projects that they believe should just be handed to them. It hurts when jobs go to competitors that by rights, really should have been theirs.

What they are reluctant to admit, but know is an issue, is that it is surprisingly difficult to find the time and space to prioritise the next project when you’re knee-deep in delivering the current one. It’s easier to hope that your good work and good relationships will carry the day – but this isn’t always a successful strategy.

Heidi Grant Halvorson is a psychologist, TED speaker and the author of many books on the topic of what really makes people tick. In one of her latest books, No One Understands You and What To Do About It, she cites a range of studies proving that people are much more impressed by our potential than our track record.

In other words, when we are deciding who to hire, promote or do business with, it turns out that we aren’t impressed by the ‘big thing’ nearly as much as the next big thing.

This is a challenge for incumbents who need to win work on a project-by-project basis, because customers are primed to want what is new and shiny, rather than what is existing and reliable.

To fill your pipeline in a project-based business, you need to be constantly positioning for the next job while you’re on the current one.

I have worked with many technical, creative, research and consulting people who are professionals first, and salespeople a distant second.

It’s no good just telling professionals to go and talk to their customers so they can win more work – they need something valuable to talk to them about. This has to be something that will help the customer to compete better or do business better, and it can’t just be about the job they are currently doing.

My new program, Win More Work With Existing Customers, is designed to help project-based professionals to understand what customers want to buy, not just what they want to sell, and to position themselves in the box seat to win more work with existing customers.

This program is also available as an in-house workshop for firms who want to make sure everyone in their business has the skills and confidence to share the responsibility for winning work.

Selling simplicity

Customers buy expertise for a reason; it fills a gap they can’t fill themselves. As an expert, one of your superpowers is pattern recognition, and the ability to simplify complex issues for your customers. Through many years of learning, doing and reviewing what you do, you’ve built a valuable frame of reference that helps you to see things that your customers simply can’t see for themselves.

Leonardo da Vinci once said, “Simplicity is the ultimate sophistication”.

More recently, Lisa Bodell, author of Why Simple Wins, lays out a compelling case for reducing complexity in the way that modern organisations work.

Complexity, she says, is a monster that is killing our ability to innovate and adapt. Because we are constantly knocked around by disruption, it’s becoming much more tempting and destructive for companies to add more and more, without sweeping away what’s no longer useful. This then becomes a huge drain on competitiveness.

Bodell cites an initiative by the Boston Consulting Group to track complexity by building an index based on surveys of more than 100 companies on both sides of the Atlantic.

What they found is both eye-opening and terrifying.

Over the last decade and a half, the amount of procedures, vertical layers, interface structures, coordination bodies and decision approvals needed in each of those companies had increased by anywhere from 50% to 350%. Extrapolating this over a longer time horizon, BCG found that complexity had actually increased by an overall average of 6.7% a year over the past 50 years.

Not surprisingly, complexity is also damaging organisational performance. Recently, SAP’s Global Simplicity Index found that complexity destroys a full tenth of company profits each year – or a combined $237 billion for the top 200 firms around the world.

Simplicity is the antidote to complexity.

When you’re pitching to a customer, make sure you value your ability to simplify things, to see the big picture, to flex and stretch, and to cut through their mental clutter.

Your ability to synthesise and make sense of a huge amount of information, and to find the holes, gaps and opportunities that will reduce complexity in their organisation, is work that your customer doesn’t have to do themselves – and that you should be rewarded for.

Profiting from productivity

Most of your customers are task-rich but extremely time-poor. Ask anyone how they are these days, and the default reply is ‘busy’. Most of us are desperate to find a way to get through our massive to-do list more quickly, and this problem doesn’t seem to be going away.

As a supplier, you can leverage your customers’ desire for productivity by showing how you can help them to do things faster, and to claim back some of their personal time and balance.

Around the turn of this century, when the internet really took off, so too did our need for greater productivity. Eat That Frog by Brian Tracey, Getting Things Done by David Allen, and The Four-Hour Work Week by Tim Ferriss are all classic reads on how to get more done in a shorter amount of time.

A few years ago, when introducing unlimited holidays for Virgin employees, Richard Branson explained that ‘time is the new money’ – and he should know. One of the busiest people on the planet (and outside it) he controls 400 companies, including Virgin Galactic, and is a humanitarian as well as a sought-after author and public speaker.

Productivity is a universal problem for people like Branson who are in positions of power.

For example, the Executive Time Use Project, a recent study by the London School of Economics and Harvard Business School into the day-to-day schedules of more than 500 CEOs from around the world, found that executives spent roughly 18 hours of a 55-hour workweek in meetings, and only six hours working alone. The CEOs surveyed all reported a desire for more “alone time”.

Email is another huge time drain.  A study by Palo Alto technology firm Radicati found that worldwide, the average worker sends and receives 122 emails a day. Another study suggests that Executives receive triple this amount of email – about 300 emails a day. One of my clients, the COO of a human services organisation, once told me he received upwards of 400.

Here are five ways to win by showing customer how you’ll get more done in less time.

Screen Shot 2018-03-13 at 7.15.10 PM.png

The risk of doing business

Fear is a motivator unlike any other, and your sales pitch will have more power when it identifies, communicates, and eliminates risks that the customer may not know they are facing.

Sigmund Freud, the father of psychoanalysis, identified that human beings are much more motivated to take action to avoid pain than they are to gain pleasure.

Put simply, when we realise we are sitting on a nail, we want to get off it – fast.

When you are pitching to a prospective customer, make sure you fully explain the risks you are helping them to avoid, as well as the more aspirational benefits of doing business with you.

It helps if you think of what you are selling as a kind of insurance policy that protects the customer against things that could go wrong. Insurance isn’t the sexiest topic, but it is a huge industry – in Australia, it is worth $58 billion a year and employs more than 22,000 people.

Insurance is something customers understand, and although they may not like it, they are prepared to pay for it.

Your customer probably faces risks from many sources, including financial risk, operational risk, governance and compliance risk, risks to reputation, and strategic risk.

For example, right now, when businesses and government are facing an environment of constant change and disruption, strategic risk is an issue that is getting a lot more attention – and money.

A recent Deloitte study of 300 major companies around the world found that 52% had increased their budget for monitoring and managing strategic risks; 42% were monitoring this area continually; and 38% had increased the number of executives assigned to managing strategic risk.

Here is a simple five-point plan for identifying and presenting risks in your proposal.

  1. Start by dividing your page into three columns.
  2. In the left hand column, list the significant risks that the customer currently faces, before adopting your solution (aim for 5-7 risks).
  3. In the middle column, list the consequences and impacts of each risk.
  4. And in the final (right hand) column, explain how your solution will minimise or eliminate the risk.
  5. Try to keep the list as concise as possible so that it stays on a single page.

You will find that the customer’s risk of doing nothing is much greater than the risk of doing business with you.

Because you’re worth it

When you sell complex services, the real enemy is not a customer’s demand for the lowest price. It’s having them understand the value of your product in the first place.

 As far as the customer is concerned, there are two financial elements in any sales transaction – the price they pay, and the value they get.

They’re all over the price, but usually much less clear about the value. 

When you talk to a potential customer for the first time, chances are they will ask about the price even before you have enough information to formulate an answer. There are three main reasons for this:

  1. We all carry the same colour money in our wallets. Of all the things that go into making up an offer or a deal, price is the one that is the most universal and easiest to understand (at least in theory). As consumers, we all understand the value of money and are able to make instant trade-offs in our head - “Wow! That’s 50 pairs of shoes”, or “Geez! That’s as much as a Tesla/Jeep/Lexus” (insert your favourite car brand here).
  2. Prices are easy to compare – at least in theory. Once a buyer has seen a number, they’re mentally totting up the value in their heads, comparing it with the value on the page and deciding whether the investment is worth it. Unfortunately, buyers often get this calculation wrong, simply because they are not making an informed comparison.
  3. The price has either been budgeted for – or not. Understandably, buyers can be nervous about investing too much time and energy in something that might be outside their ability to pay. 

Value is broader, and much more difficult for a customer to pin down. That means it’s your job to help them understand the cost impact of the purchase that goes well beyond the price.

Recently I ran my Value Labs program with a professional services firm that had struggled to sell a new compliance product to property developers.

Not only was this a grudge purchase for developers, but there were already other, cheaper solutions on the market, and they were not at all interested, despite the relatively modest fee.

That is, until we discovered that they had a $500,000+ problem that only my client could solve.

Suddenly, this didn’t feel like selling. It felt like helping the developer claim an inheritance from a long-lost, wealthy relative.

There is simply no way to be paid what you are really worth by customers until you first understand it yourself. 

What you do might just be the key to helping your customers to compete better, do business better and to reclaim money they don’t realise they are wasting.

Do you have a ‘work identity’ crisis?

Our work shapes our identity, not just to ourselves, but to everyone else as well. As British writer Quentin Crisp once said:

“It's no good running a pig farm for 30 years while saying, 'Really, I was meant to be a ballet dancer.'

By then, pigs will be your style.”

In a business, your ‘work identity’ is largely shaped by the kind of work that customers are hiring your organisation to do.

Take a look around right now at the projects, contracts and assignments your people are working on.

What do they really think about the work they are doing?

  • How much of it is engaging work that they love, and want more of? This is the kind of work that builds careers and reputations, and that people switch employers to get access to.
  • How much of it is routine work they have done many times before? Most people don’t mind doing some level of routine work, provided that it keeps them gainfully employed. Too much, however, and they will feel they are being held back in their career.
  • How much of it is marginal and painful work that is dull or uninteresting, feels pointless, or is difficult to deliver? What kind of work are your people actively complaining about, refusing to do, or at worst, resigning from your organisation to avoid?

If you find that your organisation has a work identity crisis, here is a three-point plan to fix it.

1.     Stop relying so much on opportunities that are defined by other people, like responding to competitive tenders. You’ll end up getting more of what you don’t want, and less of what you do.

2.     Start defining the kind of work you really want to attract. What does your business want to be known for? What kind of projects do your team most want to do? What type of customers do you most love to work with?  Where do these three things intersect?

3.     Position yourself to win this work by building an offer that explains the commercial value you deliver to your customers – not just what you do. Some organisations I’ve worked with on their commercial value proposition have doubled their revenue within a matter of months, simply through the confidence it gave them to go out and pitch themselves to their ideal customers.

Where do you want to go this year?

What opportunities are on your horizon this year? How will you win them? Are you pumped and ready for 2018? Or could your motivation use a little help?

Winning the work you want actually follows a very simple equation – it’s a case of ready, aim and fire.

The readiness part is important, but often overlooked. It’s not all about targeting customers, and firing off more and more proposals.

In fact, much of your success this year will rest on what you do before you make any kind of pitch.

Legendary American economist and Harvard professor Theodore Levitt said that “people don’t want quarter-inch drills; they want quarter-inch holes.”

It’s not your products and services that define you as an organisation, it’s how you solve problems for your customers.

Your ability to solve customer problems is at the core of your commercial value proposition, or message, which you then take to market.

·      Your commercial value proposition explains why customers choose to buy from you, and not from your competitors.

·      It builds conviction within your team about the true the value of what you do.

·      And, it is the foundation of successful proposals. As can be seen below, if your message is unappealing, customers won’t go for it and you will never win any business:

pimp my proposals value ladder_highlight.png

Successful companies review their commercial value proposition at least once a year.

This is an essential piece of competitive positioning that you absolutely have to get right. It will determine what you say about yourself, and how your market sees you, for the rest of the year.

It also supports your team who are responsible for winning work. Without a clear idea of your commercial value proposition, their proposals will always tend to be longer, more onerous to produce, and harder to present and explain to customers.

Without this readiness, you’ll see some pretty significant knock-on effects.

Over the course of a year, lost proposals represent thousands of hours of wasted work, low morale for your team, and sacrificing millions of dollars worth of new business that you otherwise could have won.

The start of the working year is an ideal time to build your commercial value proposition, before your workload takes off and time pressures get in the way.

Call me on 61 3 9557 4585 or email robyn@robynhaydon.com to schedule a Value Labs workshop with your team, and get your work-winning year off to a great start.

 

The top 7 of 2017

As we close out a huge year, and our thoughts turn to Christmas, here is a round-up of my most popular articles from 2017.

As regular subscribers and followers will know, I help people to solve three different kinds of business development problems; how to position for new business, winning tenders and proposals, and customer retention and growth.

However, this year’s top 7 shows that 2017 has definitely been the ‘year of the proposal’.

Proposals are never, ever, going away, and it seems we are all keen to find better ways of managing them – as well as winning them.

Thank you for reading The Winning Pitch this year. If you’re looking for a Christmas gift for yourself, or a colleague, check out my bookstore. There’s even a three-book bundle to keep you busy over the holidays.

Stay safe and happy, enjoy a well-earned break, and I hope that 2018 brings you the success you dream of, and deserve.

#1 - Why is employee engagement such a big deal for proposals?

Proposals rely on people. And not just ‘proposal people’. This article provides a framework for understanding your team’s personal, structural and cultural motivation to work on proposals, and how to deal with any deficiencies.

#2 – Where should I invest my time to win a tender?

In a competitive tender, submission or proposal, the difference between winning and losing often comes down to where you spend your energy and your time.

#3 - Don’t worry, be happy

When the volume of competitive tenders is less of a trickle and more of a tsunami, the stress and pressure can get overwhelming. Here are three tips to manage your energy, and get through peak workloads with your life and sense of humour intact.

#4 – Keeping your submission in line, and on time

This practical article contains a four-week schedule that will give you the time to think, and to plan your proposal, even when you are stretched with other priorities.

#5 - Five myths that will stop you winning the work you want

I’ve been a bid consultant since 2001. Since then, I’ve heard loads of trash-talk about competitive tenders – most of them from people who have never worked on one and/or never, ever won one.

#6 - Writing to inspire confidence

Have you ever lost a bid you deserved to win? Seen a contract go to a less qualified competitor? Discovered that the client had reservations about your ability to do the job? You may have fallen victim of a lack of confidence.

#7 - The toughest thing about proposals 

Pitches and proposals are some of the most difficult work that any of us will do. This article explains why, and offers three suggestions for managing the uncertainty before the outcome.

 

Don’t just innovate – communicate!

Many companies now rely on innovation as their primary pathway to growth. But growth through innovation can only happen when your market ‘gets’ what you are doing, and when it makes commercial sense for them to buy it.

This year, KPMG interviewed thirteen hundred Chief Executive Officers, many in Australia, and discovered that 91% were confident about their company’s growth prospects over the next three years.

More than half of these CEOs (55%) said they are investing heavily in innovation –developing new products, services and ways of doing business – while 43% said they were also pursuing an ‘innovation-led business transformation model’ as a route to growth.

This is great news for business confidence and investment. But realistically, where is all this growth actually going to come from?

In my work as a business development consultant, I’ve noticed that companies tend to view innovation as the solution to two major problems; disruption and commoditisation.

Both of these problems actually originate outside the business. Disruption is driven by competitors, and commoditisation is driven by customers.

However, innovation is only part of the solution.

Based on KPMG’s analysis, most businesses will fall into two main camps – those that are investing heavily in innovation, and those that aren’t.

1.     Businesses that are investing heavily in innovation are exciting to be part of. They’ve got new products and services, and will talk about them all day long if we let them.

The problem for these kinds of businesses is getting their customers to listen, and to understand, and to buy at a rate and margin that justifies the considerable investment they are making.

2.     Businesses that aren’t investing quite so heavily in innovation tend to have the opposite problem. They have been talking about what they do in the same way for so long that their customers don’t really value it any more, and are constantly demanding cheaper and cheaper prices.

The problem for these kinds of businesses is how to get customers to stop making unfair and unsustainable price comparisons, and to appreciate the commercial value that their products and services actually deliver.

Which camp would you say your business falls into? The first or the second?

Either way, even if you don’t have an innovation problem, you most likely have a communication problem.

That’s because business development success is a case of ready, aim and fire.

Most of us spend all our time in the ‘aim and fire’ part, targeting customers, and firing off pitches and proposals.

What we don’t invest enough time in is readiness; making the connection between what we know and do, and what makes commercial sense for customers to buy.

As a result, we end up woefully unprepared to communicate and hold our ground with demanding customers, including professional buyers.

Every organisation can benefit from regularly revisiting its commercial value proposition, making sure that their customers not only ‘get’ what they do, but actually want to buy it.