It’s a damned pity to lose out right at the end of the sales process
If you’re losing – what’s going wrong?
The primary reasons for losing out are price (you’re just too expensive), your sales process is weak or that at the end of the day your ‘value proposition’ to your clients is just too weak. If you are too expensive then you need to go out and do the hard work to get your cost structure down so that you can realistically compete. If you have a poorly structured sales process (or your sales people don’t follow it) then you have a sales management issue to address.
Clients are not dumb â€“ they will buy on price if your value proposition is weak
Procurement departments come in for a lot of criticism from sales organisations. But all they are doing is protecting the interests of their own organisation when its making important purchases. If your ‘value proposition’ is weak and/ or unconvincing – then it’s straightforward for your client’s procurement function to make the decision solely on price forcing you to discount heavily and/ or lose business to your competitors.So your failures to win must relate to your Sales Process and Value Proposition
Assuming you have something of real value to offer clients and your cost structure and pricing strategies are competitive, then the root causes of failing to win profitable contracts are :
- You’re unable to articulate added value that you bring
- Clients fail to accept your articulation of value
- Procurement structure bid comparisons on a commodity’ basis
In terms of what needs fixing, this boils down to:
- Fixing a weak sales process
- Fixing a weak value proposition’ and/ or supplying convincing evidence to substantiate the claimed value proposition’
How to diagnose whether you have a value proposition’ issue
To get a useful assessment you could do a rapid ‘desk research’ job for yourself to get a first cut answer for yourself on whether your value propositions’ stack up. It should only take you 5-10 minutes to analyse a specific business proposal using our Value Proposition diagnostic tool, so you can analyse a representative sample of proposals within 45-60 minutes.
To test how well your sales organisation makes propositions take a look at a sample of five current sales proposals and invite your lead sales person (and their manager) to sit down with you and evaluate each proposal opportunity against these ten questions:
1.Does the proposal demonstrate knowledge of the client’s business?
2.Does it summarise the agreed needs of the client?
3.Does it specify the objectives for making a change?
4.Does it explain how the proposed solution would meet their needs?
5.Does it describe clear and tangible benefits relevant to the expressed needs?
6.Does it provide a financial justification and/ or ROI calculation?
7. What proof/ evidence do you have to support the ROI calculation (and how convincing is it)?
8. Can your client coach who is supporting your bid articulate your ‘value proposition’ for themselves unaided by your assistance?
- Increased revenues
- Higher margins
- Reduced costs
- Increased customer retention
- Higher sales per square foot (in retail)
- Increased customer satisfaction
- Increased wallet share
- Increased basket value
- Higher operational efficiency
- Reduced employee turnover
- Increased employee productivity
- Reduced error rates