The new rules of professional services procurement and why firms must adapt – or quit?
Paul Vincent, PSfPS Associate and Founder/Chair of the Management Consultancies Association Buyers’ Forum
Is there any point in professional services firms submitting a tender or proposal any more? Does the limited chance of success justify the time, money and scarce resources required?
Yes, argues Paul Vincent, PSfPS Associate and Founder/Chair of the Management Consultancies Association Buyers’ Forum…BUT only if you are prepared to adapt your approach so that it properly aligns with the mind of your buyer. Firms who believe they can carry on winning business the way they always have done should just ignore every Request for Proposal that comes their way. However, if you ARE willing to adapt, your chances of success can be greatly improved, despite the increased competition and more demanding buyer…
The marketplace has changed. Buying organisations are increasingly knowledgeable about their options and far more challenging in their expectations. Proving your competitive credentials as a service provider has never been more important.
At the same time, the traditional sales approach no longer applies. Service providers need to be bolder. They need to proactively start suggesting – rather than asking – what keeps their clients up at night.
The problem for service providers is that the way buying organisations receive their proposals is different every time. Often this difference is a function of the experience of the people involved and their own opinions on what they think they need. As a result, service providers can end up misreading exactly what their target clients really want and pitch the wrong service. What’s more, the person receiving the pitch might not in reality be the ultimate decision maker.
Fundamentally, service providers will only be successful if they truly understand the buying behaviour of their target clients and are genuinely in tune with how they want to buy services.
So do you understand your target clients? Do you understand the mindset of the people who review your proposals and why they ask for the information they do? Do you know who is making the final decision? Do you know the ‘actual’ requirement of the buyer?
Here are a few top tips that will improve your chances of procurement success:
1. You must be prepared to unlearn what you know
The old rules no longer apply. Far fewer buying organisations need help defining their need. No longer can you offer a ‘free health check’ or ‘situational audit’ as buyers are now sceptical of this approach. Your focus should instead be on how they arrived at their perceived need and then how you can challenge their analysis with your expert knowledge. Fundamentally, why are you the best option to meet that need?
2. You must know why you really are the best option
The ‘why us’ question is always difficult for service providers to answer. Typical answers include “We have [x] years of experience,” “We can be your partner of choice,” “We have a track record of success,” “You will only work with our best people.” These statements hold much less sway with a knowledgeable buyer and are instead simply the pre-requisites of approaching your firm.
You should alternately focus on “Why are we the benchmark?” and “If I were the customer, why would I buy from my organisation?”
3. You must properly tailor the message
Stephen Covey writes an analogy in his book “The Seven Habits of Effective People” where people struggle to reach the top of a ladder (i.e. their goal) only to find at the top that the ladder is leaning against the wrong wall (i.e. wrong goal).
This can be applied to service providers who spend a long time telling the buyer a fantastic story about their firm and only realise afterwards that the recipient needs that story through a different lens. This can be because the ‘buyer’ who receives the pitch might not be the key influencer on the decision.
Make sure you always know the role of the ‘buyer’ to whom you are pitching within the procuring organisation and their influence on the final decision. This will ensure you tell your story through the right lens and do not end up leaning against the wrong wall!
4. At all costs, you must avoid certain death…
If you are proposing your services as a ‘quality firm’ then you must absolutely ensure that any documentation you submit matches this assertion. The writing must be good, the design should be neat and there must be no spelling mistakes. The cardinal sin is to make it patently obvious that you have copied and pasted from an existing proposal(s). It is not unheard of to find another firm’s name in a proposal.
You should always consider and respect your buyer’s time. Your documents must be readable, focussed on delivering the outcomes the buying organisation require and be centred on the things that matter most to them…not you.
5. You must know your buyer’s mind
The marketplace has never been more challenging and it is more difficult now than ever for service providers to differentiate their firm. Buyers are savvy and knowledgeable, so old strategies can no longer be applied in the same way.
Ultimately, by understanding your buyer’s mind and adapting your behaviour accordingly, you can still navigate your way to success in procurement. Otherwise, you should just hope that you can still win business the way you always have done. Hope is not really an ideal business strategy though is it?
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Should this article resonate, you may be advised to see our corresponding ‘Partnering with Procurement‘ or ‘Responding to RFP/ITT‘ programmes that form part of our Business Development Behaviours curriculum.
Please do not hesitate to contact us to find out more about how we help businesses develop the key skills and behaviours required to maximise their chances of procurement success.