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Proposal leadership

Are you running a proposal sweatshop?

In the two decades I’ve been observing people in selling situations, one thing has always been particularly fascinating to me. It’s the way that we will spend ten times as much effort on a presentation that we know we will have to give in person, when compared to a written proposal or a tender response.

Proposals have become the routine, marginal and painful work that no one really wants to do.

Yet we produce a lot of them. When I speak to people about the volume of proposals they generate, most say that their business, company or division produces anywhere from five to more than 30 proposals a month.

That’s a lot of information going out into the market representing your brand, your work, and your value, and with the potential to open doors for you.

Unfortunately, because proposals are seen as paperwork, rather than as an exciting opportunity to win new business, proposal teams may feel they are working in conditions that have more in common with a sweatshop factory than a modern business. Here are just a few of them:

1.     No choice in what to produce

2.     Inescapable grind; long days turns into long weeks, months and years

3.     Constantly working extra hours to meet deadlines

4.     Disconnected from the rest of the business

5.     Under-appreciated by managers and leaders

6.     Responsibility without authority

7.     Produces output at the lowest possible cost, which is later expected to be sold at a premium price

If there is a disconnection between the conditions in which your proposals are created, and the outcomes you want them to deliver, you have got a problem.

What you get is dull, mass-produced documentation, and not the dazzling, inspirational calls to action that you really need.

A proposal is usually the first piece of work a customer will see from you. It’s the gateway to the opportunity you really want, and the chance to get in front of the customer to do your verbal pitch.

As a business leader, it’s your job to invest in your proposal effort and give it the resources, respect and reward it deserves.

If not, your brand will be damaged, your work will be devalued, and those doors you want to open will remain firmly closed.

How to avoid becoming a commodity

Buyers don’t commoditise suppliers. We do that to ourselves, by not giving them the criteria to make a better choice.

Warren Buffet once said that “price is what you pay, value is what you get”. While it’s a simple idea on the surface, there’s a lot to this concept of value.

Price is easy to understand, which is probably why we default to it so often. “Value” is much harder.  Value is both a subjective and objective concept. It exists in tangible and intangible form.

Value is like a snowflake – no two people see value in exactly the same way.

What creates value for me probably won’t represent value for you. That’s because we have different hopes, dreams, goals and problems to solve.

Acccording to the Harvard Business Review, value in business markets is the worth in monetary terms of the technical, economic, service, and social benefits a (business) customer receives in exchange for the price it pays for (your) market offering. The HBR authors, James C. Anderson and James A. Narus, point out that these same customers are increasingly looking to their purchasing or procurement departments as a way to increase profits, and therefore will pressure suppliers to reduce prices. (No surprises there).

So, they argue, if we are to have any hope of getting our customers to think about total costs rather than simply the cost of acquisition, it’s essential to have an accurate understanding of what our customers value now, and would value in the future. 

Because of this, I reckon the way we run new business pursuits is completely wrong. We wait until customers tell us what they want, and then, like everyone else, try to give it to them – for the lowest price. And all the while, we know there is a better solution for the customer – if only we could crack the commercial value that will make them sit up and take notice.

A recent study on sales execution trends by Qvidian found that only 63% of salespeople actually make their targets, with pursuits ending in “no decision” the major reason for the shortfall. While four in 10 salespeople thought that an “inability to effectively communicate value” might be behind their lack of success, only half of them also chose this as a skill they needed to work on.

Understanding what customers truly value is the only way to combat price pressure, and to avoid becoming a commodity.

There is thought and work involved – certainly more than sitting and waiting for a tender to cross your desk – but it’s the most worthwhile work you will ever do.

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.

Had a tough year? Missed out on business you really wanted? Let’s make sure 2016 is different. The Pole Position program will position you to win the opportunities on your radar for next year. Email info@robynhaydon.com or call 03 9557 4585 to find out more.

Five business development behaviours that sabotage long-term success

Do you spend more energy getting new clients than servicing the ones you already have? Praise and heavily reward new business wins? Would you rather start a new job with a new customer than fix a problem with an existing one?

Our prevailing business development culture tends to measure and reward new business success over everything else. 

But this could be costing more than you think.

A study by Bain and Company (cited by Harvard Business School) found that the high cost of acquiring customers means that many customer relationships are initially unprofitable. However, this changes when the cost of serving loyal customers falls and the volume of their purchases rises. 

The same study found that increasing customer retention rates by just 5% can increase profits by 25% to 95%.

Add to this the Gartner Group’s assertion that 80% of a company’s future profits will come from just 20% of its existing customers, and it’s clear that investing in the business we already have makes logical commercial sense. And yet, in many cases, this investment just doesn’t happen. 

Here are five business development beliefs and behaviours that sabotage our long-term success.

  1. Focusing too much on revenue. Most BD metrics focus heavily on the revenue line. New customers push that line up much faster than incremental growth in existing accounts ever could, and what gets measured gets rewarded.
  2. Believing customer satisfaction will result in customer loyalty. Most organisations run annual customer satisfaction surveys. Unfortunately, satisfaction measures are not a good predictor of loyalty OR of future behavior. I hold customer interviews as part of my pre-work for the retention programs I facilitate for clients. On more than one occasion, a customer who at one point reported themselves “highly satisfied” has turned out to be angry, disengaged and/or preparing to walk.
  3. Performing well, but becoming complacent. When we’re hitting all our KPIs, it’s easy to forget that good work is what we get paid for, and not a selling point.
  4. Shying away from the hard work. Let’s face it, some large customers are demanding and hard to deal with, and the relationship can become strained and tense over time. It can be easier to get excited about a new customer than to dig in and turn around a difficult one.
  5. Being seduced by bright, shiny objects. It’s fun and exciting to pursue new business, with all its promise and possibility. In contrast, re-competing for customers you already have feels like applying for your own job. It’s hard, and confronting, and there is much, much more at stake.

Customer retention pays enormous dividends when we get it right. While the probability of converting a prospect can be less than 25%, we should be odds-on favourite with an existing customer. 

But incumbency is only an advantage if you choose to use it. Request the white paper and learn more about Getting Ready to Recompete For Your Most Important Contracts and Customers.

Robyn Haydon is a business development consultant specialising in competitive bids and tenders. Are you part-way through a contract term with a big customer? Have an important piece of business coming up for renewal or re-tender in the next 12 months? Join Robyn’s one-day workshop “How to Retain Your Most Important Contracts and Customers” and develop a Ready to Re-compete plan for the business you can’t afford to lose - http://www.robynhaydon.com/workshops/

Robyn Haydon is a business development consultant who helps helps service-based businesses that compete through bids and tenders to articulate the value in what they do, command a price premium, and build an offer that buyers can’t refuse. Don’t let others dictate how far and how fast your business can grow – take your power back! Email robyn@robynhaydon.com to request the white paper for the Beyond Ticking Boxes program.

The DNA of a successful bid team

A bid team is a living organism – a group of smart people who come together to apply their skills and knowledge to developing a functional solution that will win or retain an important contract or customer.

The most successful teams share a particular type of DNA. In very simple terms, DNA is a blueprint for how to build a living organism: it gives instructions to our cells about how they should grow and function.

Likewise, bid teams need the right mix of customer and technical experts, balanced by a Bid Leader with the authority to make commercial decisions, and the skills to draw out the best ideas and drive the organisational change necessary to win.

What often happens, though, is that it’s left up to the customer experts – the sales team – to run bids on their own. Customers have expectations and the sales team knows all about them: they will happily tell you what they are. Without the leadership and authority to implement these expectations, or the technical know-how to configure the systems and processes of the organisation to suit the customer, this knowledge remains under-used.

Building your team with the right mix of people creates a meeting of minds that will help you win. As you can start to see from this diagram, it’s at the intersection of these specialities that the magic truly happens. Customer experts provide information about customer expectations, which the commercial experts use to provide leadership to the technical people, who can configure a solution for the customer.

 Figure 1: The DNA of a successful bid team contains the right mix of specialists with commercial, technical and customer expertise

Figure 1: The DNA of a successful bid team contains the right mix of specialists with commercial, technical and customer expertise

Avoid letting senior leaders outside your team hijack the bid strategy, particularly if they don’t know the customer well or haven’t worked at the coalface for a long time. Often these people dominate the discussion with commercial concerns and big-picture competitive strategy, at the expense of valuable customer and technical insights, and can make disastrous decisions that undermine the good work of the people who really know what is going on. 

Robyn Haydon is a business development consultant specialising in business won through formal bids, tenders and proposals. She is the author of two books on proposals and sales, including Winning Again: a retention game plan for your most important contracts and customers. Read more about it here.