Many companies have become smart buyers, but some have become too smart.
Many companies have become smart buyers, but some have become too smart.
Some companies have refined the buying process so far that they have precluded the words ‘quality’ and ‘value’ from the buying process, and they have taken the words ‘productivity’, ‘ease of use’, and ‘morale’ out of the delivery process.
The typical request for proposal has a bunch of standards about what has to be offered by the vendor, but far too little (or nothing) about what happens after the company takes ownership. They have the specs in the RFP, but not the details of use, value, productivity, or morale.
The major flaw with the RFP process is that the people conducting the bidding are not the people who use the product or service once the bidding is complete. Nor, for the most part, do they care.
The main goal of bidding is not get the best product. The main goal of bidding is get the cheapest price – and often that precludes the best product. It also lowers the profit of the company doing the bidding. Long term, this is not good for the survival of a company.
Reality: ‘The customer took the lowest bid’ is as bogus as ‘the dog ate my homework’. The fact is, you let the customer control the selling/buying process. Not good.
Reality: If you follow the customer’s RFP requirements you will lose even if you win. If you win, it’s likely you did at a severe reduction of price and loss of profit. Not good.
That’s the bad news. Let me give you the good news, and the sales news.
There are several strategies you can employ to get around the bidding process, or legally and ethically change the bidding process. Here are some ideas you can begin to use immediately.
1. Ask for a clause to be put into the RFP that states all claims must be backed up with customer testimonial videos as proof. Any procurement department should be happy to add this clause into the bidding process. It will assure them that everything being claimed will come to pass. This will also help in establishing the reality of installation, ease of use, and long-term serviceability.
2. Request that the people who actually use the product or service you’re selling be more involved in the selection process, especially as it relates to their actual experience and their projected needs. This is not as difficult as it sounds, particularly if you can apply internal pressure to senior management where your product will be used. Keep in mind that procurement and purchasing don’t actually use what they purchase. They just buy. They’re relying on the person or people who made the internal request, and will often get their input before making a final decision.
3. Make an appointment with the CFO. He or she is most interested in making a profit, not just saving a dollar. Make your case against taking the lowest price and in favour of making a profit. The higher you go to make your presentation, the easier the sale becomes.
4. Have an active social media presence that is easy to find, so your reputation is both visible and impressive. The customer will check you out before you get there, and may use it as part of the decision-making process.
4.5 Gain better insight to the buyers of your products and services. Talk to the person who makes the budget, not the person who spends it. Make service response time a mandatory part of the bid. Talk to those responsible for what happens after purchase, not the people buying it. Make certain that third-party proof, in video, is a major part of your proposal.
Caution: The bidding process is often tightly controlled by those who execute it. The only people likely to influence change of modification are C-level executives. Meet with them as part of your normal selling process.
Note well: Every company, even the government, has preferred vendors – people who have achieved a ‘higher than equal’ status. Become one of them.
