Large government and private sector contracts tend to last for three to five years. There’s often an official commitment to an initial three-to-four-year contract along with an option built in to extend for a year or two if both parties are happy. This sounds very like a contract that a political party strikes with the public when they are elected to power. Traditionally the work involved in an election campaign was only high profile in the month or so leading up to the poll. Today political parties seem to be permanently in campaign mode throughout a parliamentary cycle, even when they are in power.
It seems to me that the organisations who are the best at winning business are also permanently in campaign mode to ensure that they keep their current clients as well as winning new ones. Sounds exhausting. Tony Blair and Alastair Campbell wouldn’t have rampaged home back in 1997 without a solid campaign strategy – which was rolled out in the years running up to the election. In today’s complex procurement environment you’re unlikely to win anything at all if you are only focusing on an opportunity as soon as you see the RFP. You’re more than likely just a makeweight in the buying process.
What has changed in the buying environment?
Back in the stone age the suppliers had all the power. If a buyer wanted to find out about what was on offer in the market he had to engage with the supplier’s sales reps. The reps could get to work early and have considerable influence on the buying process and the eventual content of the RFP.
The internet, social media and content marketing changed everything. I get vertigo looking at LinkedIn these days – the volume of product content available is overwhelming. It’s great for buyers though.
The End of Solution Sales
In 2012 Brent Adamson, Matthew Dixon, and Nicholas Toman co-authored an influential article called “The End of Solution Sales” which appeared in the Harvard Business Review. It opened with these head-turning and stomach-wrenching paragraphs:
The hardest thing about B2B selling today is that customers don’t need you the way they used to. In recent decades sales reps have become adept at discovering customers’ needs and selling them “solutions” – generally, complex combinations of products and services. This worked because customers didn’t know how to solve their own problems, even though they often had a good understanding of what their problems were. But now, owing to increasingly sophisticated procurement teams and purchasing consultants armed with troves of data, companies can readily define solutions for themselves.
In fact, a recent Corporate Executive Board Study on more than 1,400 B2B customers found that those customers completed, on average, nearly 60% of a typical purchasing decision – researching solutions, ranking options, setting requirements, benchmarking pricing, and so on – before even having a conversation with a supplier.
That article was riding on the coattails of their book “The Challenger Sale” which is one of the more significant sales texts published in the last 15 years. In a recent blog on his website Dixon reckons that the 60% number has increased considerably since 2012. With that in mind, how far ahead of the RFP do you need to be in order to win? Not all buyers are made equal – some are downright lousy and lazy – but it seems to be getting harder to gain meaningful access.
Buying Organisation Complexity
Today the main purchasing decision makers are unlikely to award contracts at the stroke of a pen. Given the size and complexity of the contracts involved they are more likely to involve other stakeholders in the decision so that they are not left without a chair when the music stops. Buying committees consist of a range of players from across the organisation as technological advancement has increased the complexity of solutions. In the past sales reps in Ireland might have experienced a range of buying stakeholders from neighbourhoods in Dublin, Cork, Galway and Borris-In-Ossory. Nowadays they can wind up on sales webinars with stakeholders from Beijing, San Francisco and Cape Town, never mind Dublin. Each stakeholder has a different agenda, a different world view and a different way of assessing value. My head hurts.
All of this complexity means that it is much harder for everyone to agree on one solution. This leads to compromise and a watered-down and less valuable deal.
Challenging and Mobilising the Sale
In The Challenger Sale (2011) Adamson, Dixon et al introduced us to the superhero of sales – The Challenger Rep – who could break down doors and win the business through provoking, offering insights and showing how her solution could make life a lot easier for the buyer. They followed up in 2015 with The Challenger Customer, where they introduced us to the Mobilizer – the Challenger Rep’s equivalent on the buyer’s side. The Mobilizer possesses a set of traits that lead to the building of consensus within the buying organisation around a particular solution. Challenger Reps intuitively identify the Mobilizers and discard the “talkers” who are less influential. By doing so they are able to strike deals that are far superior to what the core – average – reps do.
What Next?
I’ll look at buying themes in further detail in future articles. In the meantime click on the link below to chat about your business development strategy and how to win that RFP.
