Working with suppliers and buyers of telco platforms and services (and in a virtualised environment, the platform is increasingly delivered as a service), we have seen a trend for telco RFPs to be vague on what their business needs are in the RFPs or ITTs. Although this can be a criticism of RFPs or ITTs in general, it does seem to us to be a more pronounced problem in the telco sector.
As a result, when we have been asked to review past bids and responses to explore why they were not successful, we see that suppliers have often fallen into the trap of trying to cover as much breadth in their service offer as possible in an attempt to maximise value - but failing to differentiate themselves from their competitors or to show insights relevant to the buyer that would make their solution compelling. The common bid response in the telco sector is therefore more akin to a shotgun blast rather than to a rifle shot that precisely hits the target and wins.
In major telco contracts, we have also observed buyers using the RFP like proxy market research – “let’s see how many things on our wish-list we can get”. In one extreme instance, a client, buying a platform for a new service, included a slew of “requirements” only relevant to an existing platform that ideally needed replacement. Effectively, the RFP was being used to see if they could get a “buy one, get one free” deal.
Sellers, clearly keen to win business and often adopting a “refuse to lose” strategy, respond in kind. They are “fully compatible” with the maximum number of features and, as my colleague Bob Wiesner highlighted in his blog, this approach doesn’t add value and rarely secures the win.
Instead, sellers should pause, review the situation and ask if they really understand what the client wants. We frequently hear that “businesses won’t talk to us once RFPs are out” or even that “everything we need is already in the RFP”.
Sellers should never pass up on an opportunity to ask for more information – ideally prior to the RFP being issued or even after it has come out. At worse, you’ll be told “no” but our experience is that in many instances you will get extra information. In most cases the insights gained from that extra information will be extremely valuable and can make the difference between a win and a loss.
Asking questions always helps build a clearer understanding of the buyer’s strategic business objectives – which are never about a new platform or having a more responsive outsourced management supplier. Business strategies are built on much bigger concerns, like increasing revenue, lowering costs or expanding market share. To uncover business key drivers and personal motivators through questioning takes probing skills and techniques that not everybody has, but all can learn.
Uncovering these key drivers, by delving deeper into the buyer’s thinking, enables sellers to move their responses from being merely compliant, or at best informative, to a point where they become persuasive and buyers start to think of the proposal as the right choice.
Following this approach, I’ve seen bids for national telecoms licences successfully re-crafted after the bidder recognised that the strategic objective was to re-establish a position of national leadership in mobile services and infrastructure – a key point, not explicit in the RFP simply because no-one wanted to publicise the view that national leadership had been lost in the first place!
Similarly, a platform vendor was able to achieve a major shift in customer opinion by affirmatively answering the simple question : “Can the sales force stand in front of existing customers and tell them this new platform is better than the one they’re very happy with now?”.
We see first-hand how clients following our approach to strategic bids can secure improved win rates, year-on-year and achieve this while increasing margins and profitability. As a start to supporting your own efforts to increase win rates, we’d be happy to give a no-cost point of view on a recent bid response, and then work with your organisation to explore possible ways of making your future bids significantly more compelling for buyers
- John Fletcher
I’ve written frequently about trust in new business pursuits. Briefly,
Trust plays a bigger role in prospect buying decisions than most pursuit teams seem to acknowledge.
Too many pursuits are orchestrated in a way that makes it damn hard to prove your trustworthiness.
We also know that “chemistry” plays a huge role in decision-making. Chemistry is basically the prospect judging how much they actually like the pursuit team. And, of course, a big part of chemistry has to be the prospect asking, “Do I trust these people?”
Now comes fascinating info published in the Harvard Business Review on the physical or biological factors that accompany or even predict whether we’ll trust someone.
Your Brain on Trust
The author says that two things go on in your brain that predicts whether you’ll view someone else as trustworthy, which he calls The Biology of Trust. First, “theory of mind” – how well you think you can forecast the behavior of the other. Second, empathy – how well you share the other’s emotions. So,
To trust someone, especially someone unfamiliar to us, our brains build a model of what the person is likely to do and why. In other words, we use both theory of mind and empathy during every collaborative endeavor.
And in the author’s research, not surprisingly, trust directly impacts sales.
The Trust Contagion Effect
You can’t tell someone else to trust you. But you can improve the odds that they will through your own behaviors. If your face-to-face approach during the pursuit indicates you trust them, they’re more likely to trust you. And the more they trust you, the more likely it is that you’ll win the business.
Here’s what the science seems to say:
Ever yawn because someone else yawned first? Same with trust behaviors, apparently.
Your Capabilities Don’t Build Trust
Take this a step further. It’s your first time in front of the prospect. Your focus looks to them to be on yourself. Lots on your company, your capabilities, your cases. Even if this is just the first 10 minutes of the meeting, it’s not doing anything to build trust. In fact, based on the science, it might be making it more difficult for that oxytocin surge and, therefore, more difficult for the prospect to feel any empathy with you.
So you have to be really good at those face-to-face interactions. Have lots of them. Know how to engage and interact. Focus on them and their problems/opportunities at the very start. Win at trust and you’re well on your way.
- Bob Wiesner
The most important predictor of successful revenue growth is a strong strategy and the ability to execute it.
Well, when we at The Artemis Partnership look at the landscape among agencies and professional services firms, all we can say is
One out of two ain’t bad.
When we’re called in to help a client get revenue growth to where it belongs, our diagnostics often reveal one of the following:
Lousy growth strategy and lousy execution.
Great growth strategy and lousy execution.
Lousy growth strategy and great execution.
Number 1 above needs little explanation.
Number 3 sounds weird. But it’s common. “Lousy” might not even be the right term. More like “No growth strategy” Maybe this is your organization: You chase after every shiny object that crosses your path. You respond to every RFP. You might even win a fair number. But you still miss your revenue targets and certainly your profit objectives. Though you win a decent percentage of your pitches, you’re not winning the big ones. And your people are burned out.
Strangely (to us), this is the way many organizations go about trying to create revenue growth year after year. So there are good years (lots of pitches, reasonable winning percentage) and bad years (maybe not as many pitches, disappointing winning percentage). As a strategy, it needs some serious adjustment.
So what about Great Strategy and Bad Execution?
We don’t see this a lot among companies that call us for help. I guess it’s because so few of these companies actually have a great growth strategy. But when we see it, it’s so, so sad.
What accounts for Bad Execution? Could be any number of things:
The team lacks persuasion skills
There’s too much emphasis on the organization’s credentials or solutions and not enough on understanding the prospect’s decision-makers
The team doesn’t know how to create true differentiation
Team members are poor communicators, poor at delivering pitches
And there’s more. But here’s one that struck a chord with me.
No Strategic Guardrails
Maybe a big reason for poor execution of a great strategy is that you are pursuing too many NON-strategic opportunities. Someone in the organization made smart decisions that drove your growth strategy.
So maybe you know the kind of new business you want. You know why those targets should work with you. You know where your competitive advantages are (and where they’re not). But you don’t execute that strategy. Instead, you pursue too much, dare I say, junk.
This HBR article on autonomy and innovation really resonated. Though not written for the business development universe, consider this quote:
Leaders often say they want to empower autonomous teams and free the front line to innovate, but they also fear the chaos that might be unleashed if they do. What if people go off in too many directions? How will people make decisions? What about resources? Who gets what, and how do you mitigate all of the risks? It’s possible to create alignment and control — while also giving your employees more freedom — by putting guardrails in place. These guardrails can help leaders make a real change.
If you fear that people will go off in too many directions — that they won’t be aligned with strategic priorities — here’s a guardrail: Cultivate a strategic mindset.
The Missing Ingredient
That’s what we don’t see in too many cases: The “strategic mindset guardrail.”
If you want to have successful execution of a strong revenue growth strategy, you’ve got to make sure that everyone who touches that strategy – especially those with the responsibility or ability to implement it – always think strategically.
In fact, does everyone involved in business development know what the strategy is? Have they been persuaded that it’s the right strategy? Do they understand the purpose it serves? Does it seem aligned with their personal and professional goals?
A great growth strategy isn’t the end of the process. It’s the beginning. Now comes the hard part. Sell it to your organization. Make sure they’re aligned with it. Create incentives and accountability. Don’t waste your efforts. When the shiny object crosses your line of sight, who stops and says “Hold on – not on strategy”?
When you’ve learned how to say “no,” you’re well on your way to becoming better at executing your growth strategy.
- Bob Wiesner
At Artemis, we strongly advocate for subject or category expertise. When evaluating options, prospects are likely to put heavy weight on how well the competing firms understand the business and the specific needs of that company and its decision-makers.
But how do you reflect this expertise during the pursuit? Do you simply parrot back to the prospect stuff that the prospect already knows?
You could. That would be the price of entry into the prospect’s consideration set. But it might do little for differentiating you. And, by using equivalent expertise in the development of your solution, you might possibly come up with something that looks a whole lot like what the other guys have come up with.
Break the Category Conventions
In our experience, the best, most innovative, most differentiating solutions can emerge when the pursuit team knows the “category conventions” and then brainstorms deliberate steps to break them.
This HBR article on innovation says it well. The first of three steps recommended for innovation is this:
“What is the existing practice/the recipe for success/the way we’ve always done it at our organization?”
Replace “our organization” with “this category” or “this prospect.” A deep study of the way things are usually done is then followed by an equally intense discussion of this:
If we didn’t follow category conventions, what would we (or the prospect) do?
Broken Rules and Great Solutions
There are plenty of examples of terrific solutions – ones we take for granted today – that broke category conventions. Consider
Convention: TV is a linear medium, one episode a week. Innovation: Drop all episodes at the same time.
Convention: Smartphones have keyboards (think Blackberry). Innovation: Type on a screen.
Convention: Coffee is a cheap commodity that accompanies breakfast. Innovation: Coffee is an event.
These are very big ideas. Most pursuits and pitches don’t require solutions of this magnitude. Yet in all categories, except those that are highly regulated, there are potential advantages during the pursuit to taking this approach. First make the prospect confident that you understand the category conventions. Then show the value of a solution that steps outside those assumed boundaries.
- Bob Wiesner
It’s a core and unshakeable belief, shared by all my Artemis Partnership colleagues:
Pitch less to win more.
I’ve argued this point for years. Still, I continue to find organizations that don’t get it. Yet the evidence in support of this objective continues to mount.
Consider this from a July 2019 article in HBR:
While burnout can affect anyone, at any age, in any industry, it’s important to note that there are certain sectors and roles that are at increased risk, and purpose-driven work — that is work people love and feel passionately about — is one of them.
No one argues how dreadful it can be to pursue new business when the team is unaligned, distracted or disinterested. Yes, definitely, your pursuit teams should be highly motivated, intrinsically and extrinsically. And for sure they should have a passion for the pursuit.
So what’s the problem?
Too much passion can hurt
The information is becoming increasingly clear. Even when people are engaged in work that aligns with their Purpose, too much of it without sufficient recharge and refuel time will likely lead to burnout.
Some individuals and teams might compensate by taking their feet off the gas from time to time. Understandable. Sadly, if you’re really chasing quality, strategic growth, a half-speed or half-intense pursuit effort will be noticeable to your target. And your odds of winning will get longer and longer.
So even with a driven, talented team you need to be highly selective about your pursuit activities or you’re at high risk of burning them out.
But even then, you’re not out of the woods.
You might have an inbound problem
Smart, strategic growth plans are highly selective about proactive targets. That is, those businesses the firm will pursue – and attempt to win – before an RFP arrives.
Ah, but what about those RFPs? If you’re careful about your outbound efforts, but you agree to enter nearly every inbound RFP-based competition that comes your way, you’re still buying one-way tickets for your people on the burnout crazy train.
Avoiding burnout – and winning more – can only be the result of highly-considered decisions of when to pitch and when not to pitch. And the accompanying go/no go decisions that have to be made throughout the pursuit process.
Passionate people can deliver great results only when they’ve got the energy and drive to do so. Don’t let new business burnout be the cause of your low win rates.
- Bob Wiesner
Many of my clients have tried to improve revenue growth by adding new capabilities. Sometimes it helps.
Sometimes it just drags down profitability. Pitch win rate doesn’t improve. Jobs are lost as profits diminish. And the company’s brand suffers, which leads to more losing pitches.
So why do they do it?
I guess the good news is they’re paying attention. They see prospects turn to providers with capabilities that these companies might lack. Maybe that capability is a digital platform. Maybe it’s analytics. Maybe it’s a manufacturing resource.
They’re missing the point. Winning Comes From Value.
Prospects award their business to the winners of pitches because they have truly established their “value.” Not the lowest price or the most efficient process. By “value” I’m referring to the company’s ability to get the job done for the client at a fair price and a fair profit.
And the most important part of the statement is “get the job done.”
This HBR article says it well. Companies that have won in the marketplace have done so by improving what the author calls “CVP” – Customer Value Proposition. They’re able to do things that the client needs to get done at the right price while making a reasonable profit.
Many firms involved in new business pitches place little emphasis on the components that define customer value. Instead, they lead and then hammer to death their own capabilities. They think prospects care. Nope.
Prospects want to know you’ll do what they need to get done at a price they’re willing to pay. Yes, capabilities matter, but only those that can be brought to solve the prospect’s business problem. Prospects want to hear about your process, but only as reassurance that what you’ve done successfully for others can be done successfully for them. Not because your processes are, themselves, anything special or unique.
Again It’s About Context
If you have more or different capabilities to solve problems than the others in the pitch, you have an advantage. When the prospect believes those capabilities are relevant to their specific issues, it’s better. When the prospect then believes those capabilities can be used on their behalf, they’ll be willing to pay for them.
Customer value is a reasonable decision criteria for prospects in pitches. It doesn’t mean you have to be the cheapest. If your relevant capabilities are highly regarded, they might pay a surprisingly higher price for them. But only when you’ve proven that connection. Not just because you’re proud of them in your capabilities deck or your website.
- Bob Wiesner
The creative pitch was scheduled for an hour. The team was worried, almost in a panic. That’s not enough time, they thought. We have to explain where the idea came from, show consumer research, show the many ways it could be executed, provide all our rationale.
And we have to show alternatives, they believed. Show the ideas we rejected. Maybe show some other good ideas, let the client know we’re thorough. Let them participate in the decision.
Even give them choice. Sheesh. Here’s another way of looking at:
They’ve given us an hour to show our creative idea. Awesome. What are we gonna do with the extra 30 minutes?
Simple, Obvious, A Winner
Somehow this is always true: The best ideas, once they’re presented, should be seen so brilliant that they’re obvious. The head-slapper. The ideas that elicit this reaction:
Why didn’t we think of that before?
I’m really impressed by the thinking presented in this HBR article. Great ideas come across as great ideas because there’s crystal clarity about the problem the idea is solving. That is, when we really understand the problem – or the objective or the insight – it’ll be so much easier to buy into the creative idea designed to save that problem.
Even better when the idea is immediately relevant based on experiences and perspectives that evaluators might have. We get it because we can relate to it. The author of the cited article quotes a University of Minnesota paper:
“In times of clarity, your resolutions appear obvious and simple; but in fact, they appear simple because the illumination has all the parts lining up and shedding light on a resolve”
10 Minutes + 10 Minutes + 10 Minutes. Thirty minutes is enough to present a big creative idea if you’ve done your job right.
First 10 minutes: Establish with pure clarity the problem the idea will solve
Next 10 minutes: Present the idea. Show how it’ll be executed in only enough detail for proof of concept
Last 10 minutes: Get client reaction. Discuss the way forward
And as for showing rejected ideas and alternatives? Nope. Not necessary. It only confuses things, and gives clients more opportunities to not like something. Get a great creative idea. Connect it to a real client or consumer need.
Sell it just that way.
- Bob Wiesner