This is always a good question to ask, as is why/how did I win that piece of business?but that is a question for another day. We should all strive to understand the dynamics of the customer decision making processes so that we can adapt the way we bid to make it more likely customers will say yes to us. Although each customer will have some individual characteristics, by analysing the results, a pattern will emerge that you can use to tune your future bidding process to increase the likelihood of winning.
One important thing to consider is whether a particular deal that you feel you should have won has been lost. Extending this; is this a one off or a growing trend? To answer this question you need to have good sound data about the type of deals you win and lose against which you can compare individual cases. If you do not have such data then it is never too late to start collecting it.
Another factor that must be considered is whether there was actually a genuine chance that the deal could be won. Were you dealing with an actual prospect that had a problem they were willing and able to solve with the help of an external supplier? This is often summarised as; need, authority and money but we would also add “will”; do they have the will to proceed.
Even with the need, authority and money in place there can be other reasons why people do not proceed; one of the most common being risk. It may be a subconscious thing but people confronted with making a decision assess the risk; are they better to stay with the status quo even if that is a less than ideal scenario is the sort of question people ask themselves.
We have worked with various businesses in recent years where the habit has developed that quotes or proposals are provided to almost anyone they talk to who appears to have a problem they can solve. I can hear the cry; “we have a huge pipeline but no one is making a decision …” ringing in my ears. It may be that of every 10 opportunities your bid for, only four or five were winnable by any company, so that will distort the results. It must also be recognised that at least 50% of the time, effort and money spent on bidding for work is wasted before you even start.
So, an obvious starting point when answering the question “Why did I lose that piece of business?” is to decide first whether it was winnable by anyone and then was it winnable by you. Assuming it was winnable by you – you then need to explore why you lost. As mentioned earlier we recommend formal evaluation of both losses and wins through a structured process of win/loss reviews. In undertaking such an evaluation you will need to look at your organisation as well as each prospect’s.
In looking at the prospect organisations some key things to consider, after establishing that they had the need, authority, money and will, are:
- Does the prospect actually have a process for decision making? When they get your proposal or quotation what will they do to systematically make a decision and to make the right decision when choosing between different supplier’s proposals. This pre-supposes that receiving a proposal is a part of their buying process. Did you find out what their process was and did you align with it?
- In many cases today decisions are made by a number of people; the decision making unit (DMU). The people that make up the DMU will wear different and sometimes multiple hats such as; buyer, user, influencer, decision maker and budget holder. You need to know who these people are and engage with all of them as early as possible. If the first time you are meeting these people is when submitting your proposal you are probably in a weak position as other potential suppliers (including incumbents) will already have relationships with these people.
- What you will need to provide in your proposal will be determined by the individuals when you meet them. By way of an example; if you are supplying a piece of equipment to a factory the DMU is likely to include such functions as; engineers, health & safety, facilities manager, general manager and finance director. Each will have a different need in terms of the information they want from you; finance may want a RoI justification, H&S will want certificates and other relevant information, and so on.
- Now you know the people, the hats they wear in the buying process and what they will want to see, you need to establish what format they want the information in and what critical timings they want you to meet. Once you understand them and their specific requirements you can align everything to what matters to them.
- You need to understand the specific process they will use and key timings. If the actual decision will be made at a steering committee meeting that is held every quarter it is obvious what you need to do.
All of the above is in effect a summary of the key points of the role of an account manager. It is all about understanding the complete prospect or customer, and building the appropriate relationships both with the individuals and with the account as a whole.
If you have sent proposals but received no decisions or feedback it may well be because you sent the proposal at an identified point in your selling process, but that it was not relevant to their decision making process. It is not good enough to ask the prospect “do you want us to do a proposal?” why would they say no as you are in effect offering free research and market intelligence.
If the situation has stalled then you need to go back and ask them tough questions like; did you actually want what we proposed and if so when and how will you make the decision? This will be tough because you will have to accept that some will not turn into new business but at least you will know where you stand and you will get stronger for the next bid.
Phil Shipperlee is co-founder and CEO of Performative, where he combines his knowledge of sales and selling with his extensive practical business experience to help other people to grow their businesses and transform their sales performance.