Learning Nugget 14 - Uncompete
How do you spend most of your day, your week, your month, your quarter ?
Would you mostly agree or even partially agree it is spent trying to figure out how to compete better ?
Sound like fun?
What if, however you did not have to compete ?
Would that be a better investment of your time ?
If you take 9 months plus to win an opportunity – by competing better – but you only win 30% of those you pursue, that’s a lot of effort for a low return.
How many could you win, if there was no competition ?
Do your clients, want a raft of companies competing for their business ? Logic says yes. But which “customer” are we talking about. Procurement love it. It’s job protection. Justified by squeezing competing vendors for the lowest price. But what phase of the buying cycle does that take place in? Phase 0, 1, 2 or 3. One might argue IT does, they love having many companies competing for their business. Again which phase do IT typically get involved ?
As conventional B2B sales people our learned behaviour is ABC. Always Be Closing. But this is flawed. We attempt to push a client through their buying cycle, hurry them to the PO, in our own self interest.
Most sales people only think about how to move an opportunity forward, the successful sales people think about how to move an opportunity backwards (ASPIRE! Group 2016)
Start by doing what's necessary; then do what's possible; and suddenly you are doing the impossible. (Francis of Assisi)
Is it possible to not compete.
To uncompete ?
I’m yet to meet an executive that wants to go to meeting after meeting with different vendors who are all talking about the same thing. I have to meet their sales team and hear how wonderful they are and their product is, then do the same with the next competitor and the third. Then repeat all over again for RFP presentations, for demos, for RFP reviews and commercial presentations. That’s a lot of meetings, when all most executives want is to make a positive impact against their desired business outcomes.
They go to all these meetings:
They get some form of thrill by mindlessly filling their diary with vendor meetings
They haven’t got anything better to do
Historically technology investments haven’t delivered against their promises, so we need to suss as many out as possible to de-risk our investment
They don’t trust sales people, so by laying a few off against each other it keeps them honest
If it’s any of those 4 or even remotely close to any of those 4, wow, that doesn’t paint a rosy picture.
Yet even the most onerous of probity based organisations, governments, will buy / procure outside their own rules and not go to tender. Companies are winning business and not having to compete.
Consider a typical buying process that you are involved in today. The client has many meetings to define their needs, then IT publishes an RFP, there may be several meetings in just getting the RFP out to the vendors, such as vendor briefings. Then there is a bunch of RFP presentations and countless review meetings internally to assess each RFP response. After that they might ask for demos, site visits, references, case studies, a proof of concept, then f you are luck to get that far, you may have a commercial bake off with another shortlisted vendor and they dutch auction the business between the final two. Finally you are selected and move to formal contract negotiations.
How much did it cost your client to undertake that process ? Salaries, opportunity cost, in many cases real $$ as well (they may be paying a highfalutin consultant to run the process for them – to further cover their arse if it goes pear shaped).
Our own analysis suggests that for many enterprises, when all said an done the cost is circa $150K on average (time and materials). One could argue if they can get the “solution” for $150K less than they otherwise would have then it’s a good deal. Spend $150K to save more than $150K.
But herein lies the real risk.
If the average tender process takes 6-9 months, what is the lost opportunity cost of taking so long to achieve positive impact against the desired outcomes ?
Many tenders are tenders for just one leg of the stool, in fact, often for half a leg of the stool. What real hope, if any, does it truly have of making a positive impact against the desired business outcomes ?
Even after all of the competitive tendering and posturing, lets say you get a killer great price, will the vendor be in an emotional state to go he extra mile, to deeply care about your outcomes? You’ve just screwed them to the wall on price or contractual terms, one suspects it left a bad taste and a lower desire to exceed your expectations
So lets state the obvious……..Clients will not seek competitive engagements if they feel the partner is a true trusted advisor. Someone who is focussed primarily on their business outcomes to seek a win win.
So how do you uncompete ?
You move backwards in the buyers cycle BEFORE you move forwards.
Unless you are leading with the idea and creating the opportunity in Phase 0 you are always in demand reaction. If you come in at Phase 1, 2 or 3 you are in demand reaction.
If you want to uncompete in this opportunity you must first take it back to Phase 1 or Phase 0. You must focus on all 3 legs of the stool, engage a dynamic performance ecosystem, and engage different stakeholders and you must stay engaged after the PO, and after the blinky lights are on. You must do what the others simply cannot or will not compete on.
Unless or until you do that, you should go in eyes open, there will be competition.
When considering the 9 phases of BOLD, it’s reasonable to contend that today most engagement in in phase 2 through 5. Just 4 phases out of 9. Look at the stakeholder map below. The primary stakeholders in the other phases are outside our typical engagement paradigm.
(Note – primary stakeholder map only, secondary stakeholders will also have some involvement in other phases)
To uncompete go backwards.
If you like competing, keep going forwards.