Archive for March, 2007
Anyone who’s had a contract up for renewal, especially of the 80/20 variety, knows the fear of losing it (80% of your revenue from 20% of your contracts).
In Would You Rather be Barbarian or Duck? I listed the positives and negatives of being the incumbent or challenger. So, if you’re the incumbent, when is the right time to work on renewing the contract?
There are two answers.
1) You’re either working to avoid your contract’s rebid, or 2) preparing to rebid. If you’re not doing either, your duck is firmly squatting. Who knows what will happen to the contract?
Working to Avoid Contract Rebid
In a few instances you can avoid a rebid if you start working on it from day one. You’ll need to execute a plan flawlessly, but it can be done.
However, many bids can’t avoid a rebid for regulatory or policy reasons.
In this case, the best strategy is to execute a plan flawlessly to avoid a rebid - knowing it will be rebid. Sounds funny, doesn’t it?
If you do that work, you’ll create a high wall around your incumbent position. You’ll have:
- Produced an outstanding track record of quantifiable results
- Created great relationships deep into the customers’ firm
- Communicated your value effectively & often
And start working on this the first day of service and every day thereafter. This will put you so far ahead of your competition, they’ll feel the bid was just an exercise.
Preparing for the Contract Rebid
This is the boat most of us find ourselves in about 60 to 90 days before a renewal date. We’ve heard unofficially an RFP is going out. And we want to up our chances of winning.
Now’s the time to start working on the rebid. This doesn’t mean wait around for the RFP, see “Don’t Wait for RFPs, Start Proposals Early“.
While you’re still under contract and the RFP hasn’t come out, there are things you can do. And things you shouldn’t do. Here are some examples:
Price Reductions or Incentives
Too late for this now. It’s an obvious attempt to buy the contract. And they’ve already made up their mind they’re going out to bid. UNLESS asked by the customer, and in return you can ask for a contract extension to avoid the rebid.
Introduce a Service Improvement
If you normally introduce improvements, then continue. If you don’t have a history of them, think about how this will look. If there’s any hint it’s an attempt to kiss up at the last minute, skip it.
Gathering Pre-RFP Info
You should definitely be doing this. It’s your greatest advantage as the incumbent. Whatever info you seek, make sure it’s done low key and in the same manner, preferably by your same personnel, who have done it in the past.
DON’T do anything that MIGHT appear to be stealing info, sneaky or disreputable. It’s all about perception. Not yours. Your customers. You can always ask your customer contacts directly.
What to find out? Things you should have been seeking all along.
- How’s the overall business doing - up, down, flat, which direction?
- How does the contract service impact the overall business?
- What strategic initiatives are starting, or stopping?
- Who are the decision makers? Their roles & influences?
- What business changes will affect customer contact’s department?
- Who’s on the rise or fall, within the business?
Begin Your Analysis
60 to 90 days before the RFP comes out, start your proposal development.
Get your team together and analyze the customer’s business, contracted service, decision makers, and service’s impact on the overall business. This is your best, last chance preparing for retaining the contract. Take advantage.
Which of your Large Contracts is out to bid in the next 60-90 days?
Technorati tags: rebid, incumbent, contracts
March 29th, 2007
Diana of SMO asked about informational versus persuasive proposals. Here’s my answer from contractor and customer jungles.
1) Life begins & ends with a contract
2) Contracts are won with a proposal
3) Purpose of a proposal is to secure a contract
However, we’re blind.
3 Mysteries in the Universe
There are three mysteries in the universe:
- Water to a fish
- Air to a bird
- Mankind to itself
Swap “contractors” for mankind and there’s our problem.
We’re blind. We’re focused intently on our own businesses. We don’t see that customers don’t care as much about us as we do.
When a customer asks for a proposal, we fall over ourselves telling them about our gloried past and informing them of our exciting future. We’re so proud, we dump it all into our proposal responses. We can’t help ourselves.
Customers Don’t Care?
Of course customers care about contractors, but only in context. Only as contractors impact their businesses, their jobs, their stress levels.
The Law of the Customers’ Jungle
1) Customers have problems
2) Customers have goals
3) Customers need solutions to solve problems & achieve goals
4) Customers seek contractors to provide solutions, that solve problems & achieve goals
5) Customers select contractors based on proposals that show the best solutions, that solve problems & achieve goals
The New Math
Proposal = Written solution that solves customers’ problems & achieves goals + proof contractor can deliver + $$price$$
The Secret to Persuasion
It’s about customers. Not surprised I’m sure. Also, not showing up in contractors’ proposals either.
A customer buys what a contractor is going to do for them, at their sites. They don’t buy:
- Contractor’s annual revenue
- Number of contractor’s employees
- Number of years contractor has been in business
They only buy what that specific contractor will do for them at their specific sites.
That Persuasion Thing
For a contractor to persuade a customer, the customer must read in the contractors’ proposal that the contractor understands the customer’s specific problems and goals.
Only then will a customer consider the contractor’s proposed solution. And that solution must tell customers specifically “who” is doing “what”, “when”, “where” and “how”.
The final piece the customer must see is “can the contractor deliver on their proposed solution”? This is where the contractor trots out their proof points.
At last a customer sees a contractor who knows what’s needed, has a plan, is capable of delivering, and has a price attached to value.
Sounds easy. It is in theory. As you know, the real challenges begin when a competitive opportunity arrives, then all kinds of craziness joins in.
Are Your Proposals Informational?
Is your company history at, or near the front? If it is, you’re likely informing customers. You’re vulnerable to contractors with persuasive proposals.
If you’d like a FREE proposal assessment, contact me and I’ll be happy to review your proposal and provide our feedback.
Technorati tags: contract sales, proposal writing, RFPs
March 20th, 2007
In this corner, with a 42% large-bid win rate, the contract challenger, “Barbarian at the Gate”.
And in this corner, with more than 48 consecutive months of uninterrupted service, the incumbent contractor, “Sitting Duck”.
Which would you rather be? Challenger or Incumbent, in a competitive bid?
Of course from a money standpoint, we’d want the incumbent’s revenue and profit already gained. But, when the contract’s out to bid, who has the best chance of winning?
Here are some thoughts.
Sitting Duck POSITIVES (+)
The following are potential positives. Doesn’t mean they’re automatically handed over. But the incumbent has the inside track. And smart ducks work from the first day of service to the inevitable rebid.
- Understanding individual contacts’ personalities & preferred work styles
- Knowing service bottlenecks & how to work around them
- Developing relationships with HR, Finance & others who may be decision makers during rebid
- Knowing customer’s strategic initiatives & internal changes
- Understanding customer’s business pains (red ink, bad press, layoffs) affecting service
- Influencing the RFP for contractor qualifications & specifications
- Presenting the duck’s intelligence with proactive, on-going innovations & R&D
- Showing duck’s commitment with involvement from its top executives
- Understanding customer’s culture regarding communication, changes & conflicts
Barbarian at the Gate NEGATIVES (-)
- All the positives of the Sitting Duck are the negatives as a Barbarian.
Sitting Duck NEGATIVES (-)
- Customers know when & how badly a Duck has messed up
- Customers judge how well a Duck has delivered against expectations - not service actually delivered, but what customers knew about
- Duck’s performance compared to customers’ expectations - even if customers’ misunderstood or were unrealistic
- Duck’s actual performance on the roulette wheel of service - hiccups occur
- Legal, mandatory procurement requirements to rebid contracts
- Customers like change for the sake of change - they’re people too
- Duck may limit itself in proposals feeling customers’ have already decided
Barbarian at the Gate POSITIVES (+)
- Barbarians are always standing on the greener grass
- Barbarians’ proposal claims are taken at face value
- Customers can’t validate barbarians’ meltdowns, they haven’t seen things go wrong yet
- Barbarians bring fresh perspective, can present new ideas without legacy of failure
Summary
Sitting Ducks and Barbarians at the Gate need knowledge, understanding, and insight into the customer’s bid opportunity. The game is about figuring out what’s not in the RFP.
What Would You Rather Be? Barbarian or Duck?
Technorati tags: contracts, incumbent, challenger
March 13th, 2007
I love truisms because they’re true, but I hear them so often I ignore them. Like marketing quicksand words and phrases.
Eventually, and it always happens with truisms, something occurs and I realize “Wow, that’s just like….So it is true!”
For years I’ve heard “no-pain, no-gain”. Just recently I’ve realized the literalness of that truism. That when change comes it’s gonna hurt.
- Little change => discomfort, irritation
- Big change => emotional upheaval, total confusion, big pain
- (I’m talking about emotional pain, not to be confused with physical)
And only when the change is through does the pain stop. When the new becomes the normal, familar, and comfortable -again.
Here’s the Irony
The most important things I’ve learned, those that really matter in life, are all lessons linked with pain.
For me to learn, to grow, I’m going to experience some hurt. “That which doesn’t kill me, makes me stronger”.
Don’t Believe Me? Try This!
Here’s an exercise. Think about the top three things you’ve learned that have been the most important to you in your life. Don’t rush, think about those most important life lessons.
Now, with those in mind, think back to how you felt when you were learning them. Try and remember what you were feeling at that time.
I’ll bet if you were to describe your feelings they might include “scared”, “hurt”, “confused”, “lost”, “angry”, “frustrated”, or “disappointed”.
Irony Restated
Human instinct understands change is painful. Our early warning system for pain is fear (probably tied to the physical). Instinct says be scared of change because it’ll hurt. Fear and pushback is meant to protect.
But it’s pain that helps us grow. If we were to avoid every instance of pain, as instinct wants, we’d never learn anything. The irony is, to grow we’re going to hurt, and by nature we avoid hurt.
Selling Change
When selling change, prepare for the instinctual fear. Develop bridges that link the new with the known. Present the inevitable and logical progression. Context for the new is everything. Without a link and rationale back to the known, the new is off floating in space. And instinct says no way.
Those are rational tactics. Prepare yourself for the emotional as well. Not that you can avoid emotional response to change, someone else’s or your own. But awareness engenders compassion. And if you’re expecting some form of emotional pushback, you’re in better shape to work with it. Rather than strangling it.
This is true for sales of new services or products, making business changes, even for dealing with change yourself.
We’re all in the same boat when it comes to growth-change-pain. Individually, we just take it at different speeds.
I once read that without pain we wouldn’t know we were alive. That’s the good news about pain. It means we’re alive and there’s an important lesson waiting to be learned. Even if it’s not immediately visible.
How Do You Sell Change?
Technorati tags: growth, change, learning
March 8th, 2007
