June 30, 2008

Establishing Meaningful Outcomes

In the last message, we discussed the impact and importance of solving a customer’s problems. By focusing on the impact of these results, customers can then become inspired to make a decision because they are more aware that the problems they face are actually worth solving.

So how do you find out which results actually matter to the client? Are they solely financial? Technical? Social? A combination of these and several more? That is your ultimate goal, to establish all levels of outcomes a client deems as most meaningful.

If the customer doesn’t get that the problem your proposal addresses is real and you are providing a significant potential payoff for the organization, then run for the exit. You’re wasting your time.

People buy to meet their needs or solve their problems. To get them to buy from you instead of your competitors, you need to broadcast a clear, compelling value proposition over a channel they’ll be sure to hear: WII-FM.

What is WII-FM? A radio station? Actually, no, it’s a receiver located inside everyone’s head that guides the decision making process, translation - What’s In It For Me?

When your offer is delivered, customers want to see that it produces positive business impact. They may be seeking goals such as improving financial performance, increasing market share, retaining more customers, advancing the technical infrastructure, automating a labor-intensive process, or even complying with regulatory standards. It’s your job to identify these goals and then link your value proposition to them.

Ineffective sales messages focus on information about your company, your products, or your services; however, effective messages provide answers to these four basic questions decision makers typically ask:

1. Is this really what we need?

2. Will it have a positive impact on our business?

3. Can this vendor deliver the products or services on time and on budget?

4. Are we getting good value for our money, particularly considering the probable impact on our business?

By consistently returning to these core concerns as you deliver your sales message and keeping the customer tuned in to WII-FM, you can remain on that sales frequency.

So where’s the best place to get insight into what outcomes the client desires? From the client, of course. Try these questions: What kinds of results are you seeking? How will you measure success? Are there key performance indicators that you will monitor to determine whether you’re getting the right results? When you did similar projects in the past, how did you measure success? How will managers in other areas of the company know that this project was a success?

In the private sector, clients often measure success in financial terms. They seek increased revenue, greater profitability, a bigger market share, reduced headcount, lower cost of operations, budgetary compliance, and so on. For government agencies and nonprofits, financial return is likely to be less compelling than fulfilling the mission for which the organization exists—improving time on station for a particular weapon system, increasing diversity among graduate students, or reducing recidivism rates among parolees.

Two other areas of performance are frequently important. Customers often seek technical outcomes or infrastructure improvements. For example, getting disparate information systems to share data across mixed platforms might not increase revenues, but it will make the IT infrastructure work more efficiently. Likewise, achieving compliance with the requirements of Sarbanes-Oxley might not increase market share, but it might keep your CEO from costly and time consuming legal challenges.

The other area of performance is one we might call “social outcomes” such as reducing attrition among middle managers, increasing customer loyalty, or even developing a stronger relationship with suppliers or resellers.

Clearly, there’s a lot of overlap among financial, technical, and social goals. The point is to make sure we look at all to maintain a three-dimensional view of outcomes.

When the client sees a big payoff from different levels, he or she is much more eager to hear about your solution.

That’s why Sant’s clients get so excited about our messages on improving proposal processes and content. Sant Suite delivers a compelling, measurable improvement in financial, technical, and social terms. Call us, we’re tuned in and ready to deliver the right results for your organization.

June 15, 2008

Once More with Feeling

Winning the second time in a proposal competition is normally much easier than winning the first time around. Incumbent vendors win, on average, about 90 percent of all rebids. Even incumbents who have performed poorly win about 50 percent of the time. Clearly, winning a renewal is not as difficult as winning new business.

But you still have to do it right. That’s our topic this time.

In many industries, contracts come up for renewal every year or two and we are required to recompete for the business we’re already doing. This can feel like a waste of time. If we’ve been the client’s choice for several years and have done a decent job of providing services or products, we may think it’s unnecessary to write a persuasive proposal just to keep the business. Unfortunately, that attitude can creep into our proposal, suggesting complacency or even contempt, triggering the customer to start looking closely at competitors.

Another mistake people sometimes make on renewals is to wait to start the process until the Request for Proposal has been issued. If the decision maker in the client organization hasn’t heard a word from us in the past year, we may have made our job harder than it needs to be. It’s a good idea to start the renewal process on your own, well before the client brings it up. For example, you might schedule a “mid-term review” so you can remind the client of the promises you made in your last proposal, what you have done to fulfill them, and how well you have met or exceeded their expectations.

The renewal proposal can be shorter and more focused than a first-time proposal, because you don’t need to include some of the traditional content areas. For example, you won’t need to provide as much evidence of your competence. The client already knows whether you’re competent. You can minimize the company history, the team resumes, the references, and the case studies. (Obviously, if you’re responding to a formal RFP and the document asks you for these items, you must provide them.) Your renewal proposal can be much more concise and still be effective. However, you still must provide some evidence of competence, ideally by referencing work you have done during the previous period of work for this client.

There are two other changes to a renewal proposal that are important to note.

First, you should use the same persuasive structure you use in competitive proposals where you’re not the incumbent, focusing first on the client’s needs, then the outcomes, followed by the solution and evidence. However, when you present the client’s needs, you need to finesse them. After all, if you’ve been the incumbent provider for any length of time, the client might reasonably ask, “If you’ve been doing such a great job, why do we have these unmet needs and unsolved problems?”

The answer to this conundrum is to position the issue of needs by pointing out to the client that because of the positive changes that you have already introduced, because you have successfully resolved existing problems, you have laid the foundation for further growth, for improvements and innovations. Or you might try to position the client’s needs in terms of changes in the marketplace or the competitive landscape that require a response. Or you might present what they need in terms of opportunities. We’re no longer taking the client from a state of disarray to a state or order. Now we’re taking them from a very good position to a state of excellence, from a position of strength to a state of overwhelming competitive advantage.

Second, at the very outset of your executive summary, before you ever discuss the client’s needs, take a few minutes to remind them of some key successes during your recent contract. People have short memories. They tend to forget how it used to be before you came in to fix things. If you really did do a great job of improving their situation, you don’t want them to forget about it. Listing the accomplishments and comparing the client’s before with their after is an effective and appropriate first step.

What if there were problems between your organization and the client’s? What if you failed to deliver, missed deadlines, had cost overruns, or otherwise had serious client satisfaction issues? Is it better to ignore those problems and hope for the best, or to acknowledge them and try to put a positive spin on the situation? In general, if the problems occurred recently and were of some significance, you are better off mentioning them and indicating what lessons were learned and what changes to procedures or personnel were made to assure smooth performance going forward. However, if the problems occurred early in the contract and considerable time has passed, there’s probably no point in bringing them up. If you had some hiccups during start-up, for example, but since have had two years of seamless performance, why dredge up ancient history?

Renewal proposals are great, because your odds of winning are so much higher and you can cite specific examples of success the client will recognize. But the one thing you can’t afford is to take the renewal—or the client—for granted. Maintain a competitive attitude and write to win.

Did you know that Sant Suite allows you to convert your previous proposal into a new document with just a couple of mouse clicks? That feature makes it easy to turn your proposal into a review document or to transform a review presentation into a proposal. And with Sant Suite you can easily modify the proposal format so that renewals are different from first-time proposals. It’s all part of giving you a complete solution for your proposal needs.

June 6, 2008

Calculating Trust

Math was never my favorite subject, but here's one equation that I find fascinating: The formula for trust.

Creating trust is an important part of selling. If we understand the components of trust, we can work that equation so that it comes out in our favor.

Most people prefer to buy from people they trust.

That sounds like common sense. Almost nobody would dispute it. But it leaves an important issue unresolved:

What is trust? And what are the behaviors that will contribute most directly to the creation of trust?

Here's a simple equation that expresses the essence of trust:

*****Trust = Rapport x Credibility / Risk*****

Rapport is based on a gut-level reaction. Do I like this person? Do I enjoy talking to him or her? Am I comfortable with this person's style?

The personal reactions that are the basis of rapport vary widely. A person who is very pragmatic and bottom-line oriented will become impatient with someone who is long-winded and detail oriented. Another person will be alienated by habitual tardiness, while someone else won't care. In general, it's safe to say that being respectful, behaving professionally, demonstrating sincere interest in the other person, not taking yourself too seriously, and being reliably truthful are all behaviors that consistently build rapport.

Credibility tends to be based on cognitive matters. Does this person seem to be an expert in his or her own field? Do they understand my business? Do they have the insights into my business that will help me achieve my goals?

To demonstrate your credibility, include case studies, references, testimonials, project plans, timelines, brief resumes of key team members, and similar forms of proof. The customer is looking for evidence that you know what you're talking about.

And then there's risk. Customers always perceive risk. Will I waste money? Will I waste time? Can the vendor really do what they claim? Are they too small to deliver? Too large to care about our business? Is their technology too old? Is their approach too new?

The best way to minimize risk is to offer some kind of guarantee. A service level agreement, a risk-sharing plan, a free trial period--these are all strategies for minimizing risk. You can't always do that, though. The other approach that will work is to provide good references to similar kinds of customers. Detailed case studies are also effective in overcoming the perception of risk.

Plus, you need to recognize that the sense of risk often comes from anxiety. By addressing the customer's business concerns and defining clear outcomes, you minimize concern about wasting money or time.

Finally, you can overcome risk by showing a big payoff from taking the chance. If the potential reward is big enough, even conservative decision makers will move forward. But the payoff has to be believable, and it has to deliver in an area that matters to the customer.