
Hi!
Here's the Jun 2011 issue of Psyche-Selling TM
eNewsletter, and as you read through this newsletter, probably
another 10 proposals have been tossed into the garbage can
by a Procurement Manager.
As many sales people work night and day to create the
"killer" proposal, only to be killed by the buyer who claims
that the price is too high, I thought I have to write
something on how to improve your chances of winning in a
Request for Proposal (RFP) situation. Especially if
you are NOT the lowest-priced option.
Using concepts that I learnt from
Shipley,
we look into why price is NOT the reason why you lost
the deal.
Hence, this
month's topics:
-
Price is NOT the Reason Why You Lost the Deal
; and
-
The One Question That Instantly Improves Accountability
This issue's main article is on "Price is NOT the Reason Why You Lost the Deal", and we
seek to understand the priorities of the buyers, and
explore ways how we can win the deal.
In brief:
-
While only 7% of the highest-priced bids are awarded the deal, ONLY 4% of the lowest-priced bids eventually win the deal;
-
52% of the technically superior bid ended up losing,
while 80% of the bids are awarded to the incumbents;
-
To win, you need
a sharply customer-focused strategy to address
customers' real concerns, and then communicate the
right language for the right value proposition via a
well-positioned and planned proposal that complies
with the customers' criteria. In
Shipley's
framework, that's a formulated 96-step process
covering the entire strategic business development
cycle.. Read on... ...
To read the rest of this newsletter, pls.
click here (http://www.psycheselling.com/page4.html.
In the meantime,
please do help us with our
2011 Talent Management
Survey. If you respond by 30 June
2011, we will be giving you a preliminary report on
how you can attract, retain and develop your key
talents by mid-July.
Price is NOT the Reason Why You Lost the Deal
by c.j. Ng and Tony Wai
Just before knocking-off from work, Tommy received a
Request for Proposal (RFP) for a project that required
him to bid for a project worth US$1-1.5 million. As the
deadline for the project is very tight, Tommy would have
to submit his bid within a week.
Tommy and his boss were very excited about the RFP. It has been a long time since they were given a chance to bid for a deal of this size. Instead of going home after work, Tommy decided to stay back and start working on the RFP immediately. In fact, Tommy spent the next 4 nights working till the wee hours just to make sure his proposal will be perfect for the bid.
Tommy submitted the proposal a week later, confident
that he had proposed a solution that will deliver what
the customer needs. He waited for the next 2 weeks for
the good news he's expecting. At the end of 2 weeks, he
decided to call the customer's Procurement Director to
find out the news. Tommy was shocked and disappointed
to hear that the project has been awarded to someone
else.
"Your proposal was very good, but your price was
just too high", said the Procurement Director.
A few months later, Tommy got to know other staff
working on the project in the customer's company in
a networking event. Tommy casually remarked that he
had bid for the project, but was beaten by a cheaper
competitor.
"Oh, we we know about your bid," the project's staff
said, "But although your price is higher than the
final winner, there were a lot of other losing bids
that were a lot cheaper."
"By the way, did you know
who won the bid? The same guys who
also implemented similar projects for us last year,
and the year before."
If Tommy's story above sounds familiar to you, then
you are probably one of the many others who have
worked hard for a Request for Proposal, only to be
beaten at the very end by a cheaper competitor.
Until you can read the decision makers' mind on what
their real concerns are, you'll keep thinking about
price, understandably. However, if you really want
to win a deal, then some of
Shipley's
methodology framework may help you on some of the
insights, as well as the competitive analysis and
price-to-win is part of the strategy.
While your client may be telling you that price is
the reason why you lost the deal, research made by
Shipley
(a company that helps clients winning US$2 billion
worth of bids, including bids in China and Asia)
shows that:
-
While only 7% of the highest-priced bids are
awarded the deal, ONLY 4% of the lowest-priced
bids eventually win the deal;
- 80% of the bids are awarded to the incumbents, i.e. vendors who have been supplying the client on similar projects, products or services in the past;
- 52% of the technically superior bid ended up losing;
-
In many cases, the buyer has already made the
decision whom to buy from BEFORE the Request for
Proposal, and issued RFPs just to formalise the
buying process;
- The bidding criteria listed in the RFP are not all equal. Some criteria have much higher priorities than others, and those criteria may have even much more importance than price
Many sales people will argue that their customers
actually bought from someone else quoting a lower
price. That could be the case in reality. However,
if you were to probe further, you will find out that
there will also be a number of bids that are priced
even lower than the winner's price.
Hence, while the winner might have been priced lower than yours, the fact that the customer did NOT award the bid to the lowest-priced bidder shows that price is NOT the determining factor in their buying decision criteria.
In fact, anyone with a decent purchasing/
procurement
background will know that price is only but a factor
in the Total Cost of Purchasing/ Ownership. Other
factors that will impact overall costs in purchasing
include:
- Increases in
productivity;
-
Decreases in downtime;
- Improvements in
profitability;
- Capturing market
opportunities;
- Safety;
- Environmental issues,
etc.
Some of these factors are more important than others
in different bids for different purposes. The
question is, do you know what are the top priorities
of what your customer wants, BEFORE you prepare your
proposal?
The Early Bird Catches the Worm
As
Sun Tzu
puts it,
"Know yourself and know your adversary, a hundred
battles fought and not be imperiled in any" (知己知彼,百战不贻).
If you don't know the customer before they send you the
RFP, it might be a better idea NOT to bid at all. You
might as well spend that time prospecting for new
customers, or developing better relationships with old
ones.
Your chances of winning will be much higher if you are
already a supplier for the customer, even if it's for
much smaller deals.
Leveraging your knowledge of the customer, you will get
to know:
-
What could be some emerging large projects that
the customer will be issuing an RFP soon;
-
What will be the priorities for the different
criteria in the RFP. If you are not able to
fulfil all the customers'
buying criteria,
at least you can meet the requirements of the
MOST critical ones;
-
Who will be the
key influencers
in the buying decision, what are their levels of
influences and what buying criteria will each
influencer be most concerned about?
You
might wonder why would your customer share so much
information about themselves. Well, some information are
only shared with the people your customers
trust.
Here's an outline of the
R4
model that we can use to build trust, credibility and
respect with your customers:
-
Reliability.
Whether you, as the seller, can deliver your
promises in ALL aspects ranging from product
quality, delivery lead times, maintenance
schedules etc.
-
Relationship.
Apart from cultivating
guanxi
with some key decision makers, seek to build
relationship with everyone that has an influence
over whether this customer should or should not
buy from you. Seek to build an "emotional bank"
by helping them out in their work.
-
Responsiveness.
Not just how fast or how frequent you respond to
customers' requests, but also your
responsiveness to the customers' needs and
concerns, even before they mentioned those needs
and concerns.
Resourcefulness.
Can you coordinate the internal and external
resources required to give customers the
integrated solution they need?
In fact, your ideal situation will be to exert
influence on the customer so much so that the
customer "stole" your ideas and pasted them onto
their RFPs!
Formatting Your Proposal
Even equipped with in-depth tacit knowledge of the customer's buying criteria, it still does not guarantee success.
With the amount of proposals the Procurement Director receive each day, proposals that are poorly organised can be tossed out immediately. Conversely, proposals that are well-organised will stand better chances.
Well-organised proposals include the following:
-
Executive summary, highlighting the key points of
discussions and tentative agreements;
-
Table of contents;
-
Index page;
-
Appropriate usage of pictures, charts and other diagrams
-
Compliance to the buying criteria
-
Well-illustrated logic on how you meet the buying criteria
In other words, well-organised proposals make it easy for
the Procurement Director to read and reference through, and
for her to understand and appreciate your distinct benefits
and values.
As such, if your customer chose to buy from someone else
instead of you, there are a lot more factors than simply
"price". The winning approach would encompass a sharply
customer-focused strategy, employing proven processes and
tools to address customers' real concerns, and knowing how
your solution fits into customer's expectation with the
right specification. You have to take into consideration of
market competition, and then communicate the right language
for the right value proposition via a well-positioned and
planned proposal that complies with the customers'
criteria. In
Shipley's
framework, that's a formulated 96-step process covering the
entire strategic business development cycle.
Need help in winning more profitable bids? Simply e-mail
info@directions-consulting.com or call +86-136 7190 2505
or Skype:
cydj001
and arrange to buy me a mocha. All information
shall be kept in confidence.
Power Breakfast Hour: 20 Jul 2011
Price is NOT the Reason Why You Lost the Deal
Join International leadership, innovation and
sales force effectiveness consultant c.j. Ng and CEO of
Shipley China in this Power
Breakfast Hour in Shanghai where you will find out:
Why
52% of the technically superior bid ended up losing, while 80% of the bids are awarded to the incumbents;
and
How to create a sharply customer-focused strategy to address customers' real concerns, and then communicate the right language for the right value proposition via a well-positioned and planned proposal that complies with the customers' criteria.
VENUE: Crowne Plaza Shanghai • 400 Panyu Road
(near Fahuazhen Road) • 上海银星皇冠酒店 • 番禺路 400 号
(靠法华镇路)
DATE: Tuesday, 19 Jul 2011
TIME: 08:00 a.m. - 10:00 a.m.
PRICE: RMB 200 ONLY!
To make this a more conducive
discussion, we are expecting a small group of about 15
people only. The room can only take in 18, so please
register early to avoid disappointments. Please e-mail
your registrations to sales@directions-consulting.com
You can also download our Power Breakfast Hour video on
Selling to Muggles: How to Make
the Sale when Buyers Have No Idea What You're Talkin' About.
Pls. check out our web sites
www.directions-consulting.com and
www.psycheselling.com/page4.html for more inspiration.
Need a Keynote Speaker for your Annual Conference?
Whether you are holding a
conference for your regional staff, resellers or even
customers, we have the right speaker who can help you
deliver the spirit of your conference, and effect positive
changes to meet your goals.
The topics our
speakers can speak on include:
-
Achieving
Exceptional Customer Satisfaction, Productivity and
Talent
Retention by Boosting Your Employee Engagement
-
Using the Six Thinking Hats® to Win More
Sales and Get More Customers
-
Why Some Sales People Succeed While Others Fail?;
-
How to Lure Away Your Competitors' Key Accounts, and
Make Them Buy from You Instead?;
-
Improving Sales Productivity by Motivating the Sales
Force;
-
Sun Tzu and the Art of Strategic Decision Making;
-
The End of Guanxi as We Know It!; and many more!
Simply e-mail your requests to
info@directions-consulting.com or call +86-21-6219 0021
for enquiries. Sample video and audio recordings
available upon requests.
Practical Tips for Managers:
The One Question That Instantly Improves Accountability
By By Mark Murphy,
CEO of
Leadership IQ
There’s one area that we all participate in where
accountability raises its head, and that is meetings.
In a typical meeting, people share several ideas, goals
and plans, but we’re all too familiar with what often
happens next: nothing.
Days, even weeks go by, and no one brings their concepts
to life. Virtually no progress is made toward achieving
the meeting’s goals. Everyone gets frustrated – you, the
project leader, most of all – and people begin to point
fingers. When you follow up to ask everyone for an
update, you start to hear an array of responses that
noticeably fit into the 5 stages of accountability
(denial, blame, excuses, anxiety, accountability). You
hear statements of denial like, “Oh, I didn’t know this
was a high priority.” And blame like, “I can’t do my
analysis until I have the numbers from accounting; have
you talked to them?” And excuses like, “I couldn’t get
it done because IT was fixing my computer last week.”
And anxiety like, “I thought this would be easy to
finish, but turns out there’s a lot more to it than I
thought. If you still need this, I’ll need a few more
days to figure it out.”
If any of this sounds familiar to you, your organization
could suffer from a problem with accountability.
There are several ways to improve the accountability of your organization, and one of the quickest and easiest comes in the form of a simple two-part question that you should ask at the end of every meeting:
“What are you personally going to achieve and by when?”
Machiavelli was spot-on: interests are what matter to
and motivate people. When buying a car, some
people care about (that is, have an interest in) mileage
because they worry about the price of gas, others are
more concerned about the environment or about the
security and source of oil supplies. The
self-interest about costs is not inherently less or more
reasonable than an interest in the environment or, for
that matter, the lack of concern (or lower priority)
expressed by someone buying a gas guzzler.
This question seems simple enough, and you’re probably
already familiar with its use in the workplace. But the
key to this question comes not only from its wording,
but also from when and where you ask it. (Everyone
thinks they’re already asking this question, but unless
it’s done just right, it won’t be effective).
To dramatically improve this question’s effectiveness, follow these tips:
-
Ask the question at the end of every meeting to
summarize the actions required to move forward.
-
Make sure every attendee in the meeting answers the
question in front of the group. It doesn’t work if
all the other group members don’t hear the answers.
-
Make sure a specific date is given to the “by when?”
part of your question (“Next week” and “next month” are
unacceptable.)
-
As each person answers their question, make note of
their goals and deadlines. Within an hour after the
meeting ends, send an email to the group with a summary
of everyone’s goals and deadlines. (For maximum effect,
draw a three column grid on a white board. Along the
vertical axis, write everyone’s names. Along the
horizontal axis, write “Goals” and “Deadlines.” As
people answer their questions, add their answers to the
grid while everyone watches.)
-
Finally, after everyone has answered their questions,
and you’ve taken note of each of their responses, end
the meeting by saying, “Ok, everyone. I’ll be sending
around the summary of what everyone has agreed to here
(pointing at the white board). If anything comes up
between now and your deadline that might push back the
completion of your task, be certain to let me know, and
I will update the entire group as needed.”
Here’s why each of these tips is important:
First, research shows that when people make promises not
just to one person (even if that person is their boss)
but to an entire group of people including their peers,
they are more likely to keep that promise. This is
easily applied to the workplace. In other words, if you
can make your employees accountable not only to you,
their boss, but also their peers, they are more likely
to achieve their goals.
Second, if everyone shares their goals and deadlines in
front of the group, the group achieves 100%
transparency. When everyone is on the same page like
this – not just conceptually but also with regard to
specific actions and deadlines – you greatly reduce the
chance that denial or blame will come into play in the
future.
Third, when you can visualize accountability, like
putting everything on the whiteboard, you’re accessing
the powerful “pictorial superiority effect.” This is the
neurological finding that concepts are much more likely
to be remembered if presented to our eyes rather than
our ears. To what extent do we remember more? Well, when
we only hear information, our total recall is about 10%
when tested 72 hours later. But, when we see visuals,
that number shoots up to 65%. It’s a pretty substantial
difference.
Finally, once everyone knows it’s their own
responsibility to alert you if something comes up that
might affect their deadline (such as an unforeseen
circumstance around the office or a greater scope than
originally thought), you will dramatically reduce the
likelihood that excuses or anxieties will affect the
completion of their tasks. Instead, if any excuses or
anxieties do arise, you will learn about them in real
time, which allows you to manage them individually so no
single task will delay the larger goal.
If you follow these steps carefully, more often than not
you will bypass the first four stages of accountability
(denial, blame, excuses, anxiety), and your employees
will be left with only one choice: complete
accountability.
Find out how
to "Put More Accountability in Your
Culture." Learn more about the our
live webinar that will show you how
to get your employees to act like
owners, fully accountable and
passionately driving huge results
without ever making excuses.
If you would like to get more and better ideas how to
improve accountability, you can e-mail
info@directions-consulting.com or call +86-136 7190
2505 or Skype:
cydj001 and arrange to buy me a mocha. All
information shall be kept in confidence.
About PsycheSelling.com
Sales... ....the
lifeblood of a company, a matter of "life and
death", survival or extinction. Indeed,
something that needs to be studied, applied and
re-modified consistently.
Yet today,
-
many companies still don't have a coherent approach
as to how they can generate more sales and
achieve better margins;
-
many sales people are still lying to their
customers so that they can meet their targets at
the end of the month;
-
many customers are still waiting ethical and
professional sales people to help them find out
their real needs, and provide solutions that
work
Psyche-Selling TM
is set up so that companies and sales people can
make healthy profits and STILL provide genuine
solutions to customers.
Psyche-Selling TM
would like to create an environment where customers
can trust sales people to give them what they
want, and NOT be pushed with all kinds of
products and services. In return,
customers will become loyal fans of these
ethical and professional sales people, and repay
them many fold for the long-term.
Psyche-Selling TM
will not rest, until the above is achieved.
Not just in China. Not just in Asia. But
everywhere where buying and selling takes place.
Psyche-Selling TM
is a wholly-owned brand of
Directions Management Consulting Pte Ltd
that specialises in the field of improving sales
performance by enhancing the performance of the
entire sales team. Apart from the regular
"selling skills training",
Psyche-Selling ng TM
conducts pre- and post-training analysis,
interviews, monitoring and reviews, working
closely with managers and even senior
management, to deliver real improvements in
sales leadership and performance.
Hence,
Psyche-Selling TM
would like to be known as the preferred choice of
outstanding and remarkable clients, and pride
ourselves as such. We will also be
continuing to assist our clients achieve greater
heights in 2009 and beyond.
Enquiries and suggestions,
pls. e-mail
info@psycheselling.com or visit
www.psycheselling.com


|