Are competitive proposals a significant part of your business? What does your win ratio look like? In our experience, too many people spend too much of their time losing. In one case, a client proudly told us that their win ratio was 18%. In a competitive market, they thought this was a good result – at least until we got into a discussion about how 82% of their time and effort was spent losing.
How often you win can depend on many variables. Most of the time you’ll be told that you didn’t win because of price. Don’t believe it.
The “price lie”
Buyers tell you this because it may be uncomfortable for them to say they do not like your service or product, your company or your people – all of which would be painful for you to hear and may impact your future relationship. And for you, you do not want to feel that you did a bad proposal or pitch, but if someone else just undercut you, it doesn’t feel like your fault. The “price lie” works for all parties and it is easy to see why it is so common!
So, while price is an important factor, it is rarely the single factor, and often not the key factor in the buying decision.
People buy based on feelings
Organizations like to think that buying decisions are objective and pragmatic. They build bidding systems and processes to ensure objectivity. And larger organizations set up procurement functions to manage these processes. However, despite all this, people ultimately buy from people. As Ford Harding famously wrote in his best-selling book “Rainmaking”:
“People buy [based] on feelings and use facts to justify the way that they feel.”
I’ve sat on bid assessment teams where we have used score sheets; notionally allocated 70% of the decision to technical factors and 30% to price competitiveness; then, at the end of a day of “beauty parade” presentations, the chair of the selection committee has opened with the question “Who did we like?”.
On one memorable occasion we all agreed that the person who presented to us at 11am was our preferred choice, but at 5pm we could not remember their name, nor the company they represented!
Consider your own behavior when you make certain decisions. When your car needs servicing, a technically demanding procedure, do you check the equipment the garage will use? Do you question the mechanics qualifications? Or like me, do you make the decision based upon the telephone response or face-to-face interaction with the receptionist?
Be different, be human
The key to improving your win rate is to be different. Many people forget that if every bidder in a pitch is the same, the decision is harder for the buyer. How can they choose when everyone appears to be the same? In the absence of other differentiating factors, price becomes the dominant selection criteria!
Happily, despite advances in “robo-selling” and the vast choice available via the internet, the human element remains a powerful differentiator. As Dov Siedman noted in How:
“There is one area where tremendous variety still exists, however, one place that we have not yet analyzed and commoditized, and which, in fact, cannot be commoditized: the realm of human behavior – How we do WHAT we do.
The tapestry of human behavior is so varied, so rich, and so global that it presents a rare opportunity, the opportunity to outbehave the competition.”
So, the next time you are invited to pitch, refocus your attention on the human side of the process.
• Press for a face-to-face meeting. If you aren’t granted a meeting, consider withdrawing and re-investing your time in a process that gives you a better chance of success.
• Listen patiently to your prospect. Really listen. Ask questions that demonstrate interest and understanding. Avoid questions and statements that display capability – that comes later.
• Share examples and insights – of things you’ve seen; not things you think. People do not really care what you think – what they care about is what others do; the things you’ve seen.
• Waste valuable time talking about yourself. They can always hear or read about you and your organization later, if you grab their interest.
• Offer brochures and other marketing materials – that puts the focus on you, not your prospect. Instead, wait and see if they ask for information. If they do, you’re on the right track. If they don’t, maybe you did not make the right impact.
• Offer to send a proposal. This is the biggest mistake made by poor salespeople and consultants. The other person will say yes to a proposal because it entails no commitment on their part and stops you eating more of their time. Then they can say “no” at a distance – typically by telling you that your price is too high!
For more thoughts and tips on next generation consultative sales approaches, sign up for our regular posts.
David Lambert is co-author of Smarter Selling, the best-selling book published by Financial Times, available in seven languages.
engage-universe.com delivers business relationship and sales skills training to executives, professionals and sales teams around the world, helping build business trust.
Subscribe now to receive insights and updates to help you improve your business.