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Many salespeople enjoy submitting proposals, because they give them a false sense of achievement.
They tick the box in their customer relationship management system and get rewarded for reaching a “milestone”.
Keith Dugdale, author of Smarter Selling, says you should write a proposal only when you know you have a significant chance of winning.
Proposals should confirm agreements, not be a shot in the dark.
It’s this kind of thinking that caught the eye of Vanessa Bluen on her global hunt for ideas that can inspire clients of The Consultant Powerhouse.
“When we met Keith we were challenged to reconsider what we knew about selling,” she says.
Dugdale will be in SA from July 11 to 13 to share ideas with the market. Smarter Selling and IoweU are relationship and trust enrichment training programmes implemented in more than 22 countries to change the way relationships of trust are built.
The Consultant Powerhouse offers these programmes to the local corporate market.
Dugdale’s experience confirmed that many companies earn 80 percent of their revenue from winning tenders.
Their average success rate is nearly 25 percent (the lowest was 5 percent), meaning they spend 75 percent of their time losing work.
The cost of unsuccessful proposals can outweigh the profit made on work that is won. However, few organisations track the cost.
One of the key issues around proposals is the “go/no-go” decision. Organisations have so much flexibility that the rules might as well not exist.
As soon as anyone says “this is a strategic opportunity”, all other considerations disappear.
Our rule is simple: “If you do not have a partner relationship with people of power and influence, you do not bid. End of story.”
Sometimes you can pull a rabbit out of the hat, but if you do not have that close relationship then someone else probably does.
If the win rate across large tenders runs at nearly 25 percent, then the win rate where there is no critical relationship in place is near the 5 to 10 percent mark.
“The irony is that the harder you worked on perfecting that proposal, the less time you had to build the relationship you needed,” says Bluen.
Organisations often keep going even though they know they cannot win, partly out of habit and because they are measured and rewarded, even for failure.
The key to the IoweU Smarter Selling process is that the sales team’s job should be to build relationships with people of power and influence. When an opportunity arises you will know about it early and they probably want you to win it.
If you achieve this then you could get the proposal out of the process. Even where a proposal is needed for due process, you can help write the tender documents.
Even if you can’t do that, having relationships with the right people on the tender panel will help you win and reduce their focus on price.
Even in government tenders it makes a significant difference.
Despite the regulations, the trust relationship salespeople have with key stakeholders before the tender is issued is often critical.
Essentially, a partner relationship is one in which the customer trusts the salesperson.
Some people of high power have little influence, while some people of low power have high influence.
Most sales organisations focus on customers with high power, and lose out because they did not identify the influencers.
Next time you have the opportunity to bid for work where you do not have the right relationships, consider the following:
l Calculate the hours the bid will take and calculate the opportunity cost.
l Decide not to bid.
l Identify the most powerful and influential people across your current and desired customer base.
l Allocate your salespeople to those customers.
l Allocate the time you would have spent building partner relationships with those customers.
Despite the possible natural discomfort with not bidding, it will stand you in good stead going forward.
l If you would like to improve the performance of your sales teams by attending one of the Smarter Selling workshops or exclusive engagement sessions this month, contact The Consultant Powerhouse at 011 234 6127, e-mail firstname.lastname@example.org or visit www.theconsultantpowerhouse.co.za.