It is the Process, Dude!
I was just involved with one of my long-term clients bidding on a huge annual contract from one of our relatively new customers. We lost. It was a contract we fully expected to land, so it was a huge disappointment. This customer has enormous potential for us. They annually outsource corporate wide ten times our total sales volume, (10 times our annual sales volume). We presently have less than 1% of their annual spend, (less than 1% of their spend). Pretty good customer/prospect, huh?
Obviously, we were upset when we lost this sale. My client’s business is a little slow and they also believed we were going to be awarded this business. The customer gave us every indication they were going to award us the business, so we were a bit blind-sided. This was the first big transaction we had bid on that was hotly contested and had a high profile. We had primarily picked up small pieces of their business here and there and this package would have increased our business by three times. We were competing with one of their top vendors. We lost the deal for a couple of reasons, neither of which are terribly important in this blog.
What is important is that after we learned we had lost, we spent time with the buyers understanding what led to their decision. Not long, just about an hour, over the course of two or three conversations. We asked them numerous questions about the selection process and checked to make sure that they actually followed the process as it was explained to us initially. We inquired into the role the bosses at corporate headquarters played. We clarified certain terms. We were told in the beginning by the plant buyers that all vendors would get one opportunity to come in at their best price, however a few weeks before the decision was made the Supply Chain Manager at Corporate told us the incumbent vendor would get a final look to meet the lowest price. We learned whether this had actually happened.
Because of this follow up and the actual experience of the competition, we now have a better understanding of their selection process and how the company, and the people involved, make decisions! When we are successful without fully understanding the process, it is at least partially due to luck. It is like a baseball team who does not understand the rules and still wins the game.
When selling to a big organization, usually they will explain to you the selection process, who will be involved in the decision, and the selection criteria. Any decent salesperson will spend a significant amount of time understanding this process. You cannot win unless you understand the rules. You cannot direct your organization’s resources nor develop strategy, if you do not understand how the process will work and what the customer is trying to accomplish.
Even after the customer explains the process, it does not mean that they will follow it. It’s always possible that some other unknown criteria or person will influence this process. Even when people have the best intentions, the buyers and supply chain folks have their own interpretations and each decision has its own twists and turns.
In this particular transaction we lost. However, our customer saved hundreds of thousands of dollars because through the process they were able to get two qualified vendors to compete for their business. It was a huge win for them. Because of this I am sure that they will be back quoting some of their other business.
This next time though, we will understand the rules much better and may even be able to negotiate how the process will work. Knowledge is power. Understanding what is important to your prospects and how they go about pursuing these objectives is an incredible competitive advantage.
When we win these next deals and triple or quadruple our business, it will not be luck or being at the right place at the right time. It will be because we understood the process, and then precisely managed that process to give ourselves the best chance at winning. The primary reason we will have this success is because we paid attention in the first go around.
You see, when I say it is the process, dude, I mean It is the process, dude!
Update: This blog was originally written about four years ago. I’m still working with this client today, and their business with this client has in fact increased four hundred percent.