This article is the first in a six part series that looks into the sometimes mythical topic of pitching. Over the next six issues, we’ll explore the six key success factors in winning major tenders, contracts and pitches, from deciding on what is an attractive piece of business through to the final ingredients needed to get the deal across the line. In this first article we will look at what is often the most important decision you will make in regard to any pitch: whether to actually go for it.
TO PITCH OR NOT TO PITCH
Imagine that you’ve just received a request for tender which looks like the opportunity of a lifetime. It could help you secure a prestigious new client, expand into a new market or win a massive contract that will accelerate your growth plans. But is this opportunity really what it appears to be?
Too many times businesses find out too late that what they have actually embarked on, and possibly won, ends up costing more than it is worth. Margins are too low, the client is incredibly demanding and unreasonable, their business is heading south or you just plain don’t like working with them! Not all business is worth pursuing. The more that is at stake, the more important it is to know what you are getting yourself into.
So we must make the first critical decision: do we A.C.C.E.P.T. the challenge to pitch or not? Here are six critical issues that you must examine before answering that question.
APPROPRIATENESS
- What do you really have to sell and is that what they want to buy?
- They say that people have two reasons for buying something: the right one and the real one. Do you know the difference?
- Do they want a big supplier or a niche player?
- Is it about quality or about cost?
So where can you get this crucial information to undertake an appropriate due diligence on our prospect? Dive into the internet and use reputable services such as IBISWorld, Business Who’s Who, Bloomberg Thompson Financial to name a few. Public companies provide a range of reports that can be invaluable in getting an insight into what is really going on. Join and participate in the professional associations your target would typically belong to. Subscribe to the trade magazines and publications that your prospect reads.
Last but not least, the real competitive edge comes from direct contact with the prospect’s key stakeholders. Meet with them, mix with them, build credibility and trust and show them you are interested in their business. You must be able to get a read on how they truly see you (rather than how you see yourself) so that you can realistically appraise your chances of success.
CLIENTS NEEDS
Understanding the needs of both the organisation you are pitching to and the key stakeholders is another critical factor in making the right decision.
- What is the dimension of the deal and the degree of importance placed on it by your prospect?
- How will your solution/product impact on the success or failure of your prospect’s business?
- Are they under pressure to act due to competitive tensions, market rationalisation, contraction or expansion?
- On the interpersonal side, who are the key stakeholders in the decision?
- Do you have existing relationships with them?
- What are they like to deal with and what are their personal preferences when dealing with business partners and suppliers?
- In other words: what’s keeping them awake at night? And will a relationship with you help them to sleep better?
COMPETITION
- How do you stack up against your competitors?
- How easy will the incumbent supplier be to budge?
- How does your value proposition compare on the basis of scale, price, efficiency, service and risk?
- Most importantly, what is your prospect’s view on this?
It’s all very well for you to assess the competition and decide that there are five reasons why you are the best choice, but if your prospect doesn’t know those five reasons it means nothing.
If you know your competition, then you can form a reasoned opinion on your chances of success and move forward with the confidence that you are in with a fighting chance of winning.
ECONOMICS
- What is the cost of sale likely to be on this opportunity?
- It is worth considering both the best and worst case scenario here because, when you are half way through the bid and have spent thousands, it is not a great time to realise you don’t want to continue for economic reasons.
Beyond the hard costs, also keep in mind what you won’t be able to do because of the time and resources you apply to winning this piece of business.
- On the positive side, how profitable do we expect this business to be?
- Can we expect demand for additional services or product lines over time?
- Can this contract give us access to a whole new industry or network of opportunities?
- From a risk perspective, what is the prospect’s financial record in dealing with other suppliers?
- Are the terms likely to be acceptable to us?
Over the years we’ve seen many companies bid for work, only to find that the “pot of gold” was not quite what it appeared to be.
POTENTIAL
- Are there synergies between our companies that would suggest that we can expect to have an ongoing productive relationship with our prospect?
- Can you continue to meet their needs as they grow? Will this contract give you the opportunity to innovate in terms of your product or service offering?
- Do you get the sense that your organisation has a fundamentally similar culture and core values to those of your prospect?
- Are they people we feel we can trust? Are they someone you and your business will be proud to be associated with?
Often, long term potential can cloud the short term realities of winning the business and implementing the solution. Nevertheless, it is a significant factor and can play a major role in influencing your decision.
TIMING
When will the decision be made? Are you geared up to meet their timetable if you win? Does the timing fit well in light of your existing clients? Will it inhibit your ability to maintain your standard of service to other clients?
Sometimes the opportunity is good but the timing isn’t – an often forgotten fact, but worth thinking about.
So do you A.C.C.E.P.T.?
In weighing all these elements up and their impact on your organisation and strategy, you will have a much clearer perspective on the relative risk and reward on offer. Naturally, the extent to which you go in examining these issues will depend upon the significance of the opportunity. Either way, you will be in a position to make a far more informed decision.
Paul Laurendet & Geoff Mulray are the founding partners of Technique Group, a business development consultancy that works with blue chip Australian organisations to enhance sales strategy, systems, structure and skills. www.techniquegroup.com