I’ve recently been writing quite a bit about business-to-business selling in the Post-GFC world, in other words, what has changed in sales since the advent of the economic issues that have plagued us since 2008. But some recent client work has reminded me of an important trend in B2B sales that is still occurring, though it may be obscured by a GFC-driven counter-trend.
For the sake of this discussion, let’s consider the situation where the sales organisation unexpectedly receives a Request for Proposal (RFP), or similar request to submit a proposed solution, from an account or potential account. The fact that the RFP is unexpected means that the selling organisation has not been working with the buyer to uncover and develop the need in this case. (Ideally, of course, a proactive and customer-centric salesforce would have been involved from the start, creating the opportunity and possibly even helping to craft an RFP, if an RFP is required. I’m sure I’ve written on that topic before! But we’re discussing the situation where we get the RFP later.)
In the 1980s and 90s, large organisations saw a huge increase in the number of purchasing decisions that were taken away from the business and given to a professional, formal sales process, often led by a purchasing or procurement group. The logic was clear: the company was more likely to get the best possible price in a competitive situation. Great steps were taken to remove possible bias, to ‘level the playing field’ among competitors. This generally meant that communication to the business during the sales process was cut-off. Any information would come from purchasing, and the conversation flow was uni-directional.
While this process was initially only applied to materials and product purchases, the late 1990s and 2000s saw this trend extend to purchases of services as well. Selling organisations, no matter what they were selling it seems, are now put through a controlled, formal selling process, without significant communication back to the purchasing organisation: proposals were to match against the specifics of the RFP and that was it.
This situation is obviously frustrating to a salesperson. Without access to those who will be using or interacting with the product or service, it can be hard to determine the right solution for the client. Companies that can have a major impact on their clients, but who might not fit the specific details of the request, can have a hard time communicating why they are, nonetheless, the right choice. And no organisation wants to be judged solely on price (well, perhaps one organisation per industry wants to be...). Sellers are forced into a formal, and somewhat blind, process of their own, trying to create a low-cost bid that ticks the right boxes. Or they discard the RFP.
Over the past couple of years, that trend has seemed to increase. Decisions that formerly were made by managers now are made by procurement. Decisions that used to be simple, are now made via a complicated formal process. The GFC’s focus on costs and cost savings has accelerated the above trend, and also has increased the number of third-party specialists in the purchasing process.
But there is another macro trend, operating in the background, one that began before the GFC. While many formal purchasing processes remain locked down and one-directional, we’ve noticed an increasing willingness of purchasers to engage in conversations, even after an RFP is released. A willingness to engage, that is, if the selling team makes the effort.
One of the key drivers in this effect is the buying organisation itself. After years of being told by suppliers that a blind tender process often results in a poor buying decision, many procurement organisations have recognised this fact themselves. The political pain they have felt from decisions that the rest of the business were not behind was certainly part of it. But, more importantly, many procurement organisations continue to become more engaged with the business itself. With more analysis into the past performance of previous purchases, the result is a buying organisation that is more interested in making the *right* decision, not just the cheapest one. So we’ve seen companies very interested in sitting down and discussing the RFP, the underlying need, and the key assumptions with suppliers. They don’t want to waste time, energy, and ultimately money, by making the wrong decision.
This is clearly a good trend for a consultative, customer-focused salesperson. But most salespeople have given up: once they receive an RFP, they immediately shift into Respond Mode, crank out a response at the lowest possible price, and sit back and wait. However, there is still plenty of room to be proactive, and to create value for the customer and the sales organisation.
One recent conversation (one of three or four that sparked writing this article) reminded me of the importance of being proactive in response to an RFP, and trying to initiate conversation. While trying to coach a salesperson towards the idea of going back to the issuer of the RFP to query some of the assumptions, the salesperson, “I suppose I could go and ask them if they would be open to discuss it, but 99 times out of 100, they will say no.”
I questioned his statistic, and asked how many times in recent memory he had done so. It turned out that he hadn’t for a couple of years. In this case, he went back to the customer, and, luckily, the customer was more than happy to open the discussion (I say luckily because, in this case, it makes for a much more interesting article). The discussions are ongoing, but he certainly stands a better chance of coming out ahead now.
For a sales team or manager, the action in response to this trend is quite simple: push back on RFPs that you receive. Ask questions. Request a meeting. Don’t *assume* that they will say no. The worst case scenario is they respond that the information required is in the RFP; you are no worse off than before you acted. Second worse is that any conversation that they have with you, or any answers that they give to your queries, also will be communicated to the other bidding parties. In this case, you’re still better off than before. And finally, the third worst-case scenario, is that the account engages with you, allows you to have a conversation about the issues and the needs, and you’re able to work effectively with the account.
Given the *cost* of pushing back on RFPs – almost zero – why not? Make it your company sales culture to do so, and you’ll be more likely to be successful.
