The way we sell is shaped by the way people buy, which is aligned to the prevailing economic and social environment of the time. We’ve already moved on from a time where the most experienced supplier would always win, to a time when the most cost-effective was generally the winner. Now that buyers are grappling with the effects of disruption on their operating environment, the game has changed again – and it’s the supplier who can make the greatest value contribution that will achieve the most success.
The following chart describes this evolution, showing that the way we sell eventually adapts to keep up with changes in the buying environment.
Chart: The evolution of sales organisations
In the past, when the buying environment was simply competitive, the most experienced supplier would usually win. We mostly sold on our credentials, and our biggest sales problem was convincing the buyer that we had what it took to do the job. This was the “no one ever got fired for buying IBM” era.
You know you’re in a competitive environment when:
- Customers demand a lot – they have a very high list of hurdle requirements that you need to meet, which helps them to weed out “less qualified” suppliers.
- You often lose to larger or better-resourced competitors.
- The most successful people in your industry are those with an impressive track record of similar work.
Then, the buying environment became commoditised. Challenging economic times fuelled demand for buying practices that would bring costs down, like category management and competitive tendering. As a result, the most cost-effective supplier would usually win.
You know you’re in a commoditised environment when:
- Customers buy through competitive tenders and online reverse auctions; constantly ask for discounts and ‘best and final’ offers; and the price goes down every time a contract goes back to market.
- You often lose on price – and often by a wide margin.
- The most successful people in your industry are those with a very low cost business model, or who are prepared to sacrifice margins to get the business.
Now, the buying environment is changing again, but in the most significant way of all – business and government are being disrupted. In 2015, consulting firm PwC undertook a study of thousands of CEOs to find out what kept them up at night. 52% said their greatest fear was “being Uber-ised” – disrupted by someone from outside their industry that they simply didn’t see coming. Disrupted environments bring a lot of problems that buyers need your help with.
You know you’re in a disrupted environment when:
- Customers ask for reform, innovation, or new ideas.
- You often lose to a competitor who is proposing something dramatically different to what the customer initially asked for.
- The most successful people in your industry are those who can break the mold of the way things are traditionally done, and deliver dramatically better results.
While each new buying environment keeps some elements of what came before – you’ll always need a strategy for credentials and price – disruption is a major opportunity for suppliers who seize the day early.
So what are you doing to codify (and explain to customers) the inherent value in what you already do and offer? How are you engaging your team in the work of customer value creation? What are your plans to “disrupt yourself” before someone else does?
Think about these questions, but don’t think too long. Start moving. In a disrupted environment, the future will belong to those who act – quickly.
|Robyn Haydon is a business development consultant specialising in business that is won through competitive bids and tenders. Her clients have won and retained hundreds of millions of dollars worth of business with many of Australia’s largest corporate and government buyers.|
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