We Have A Strategic Sales Process—Is It Cost-Effectively Delivering An Optimal Win Rate?
I work with all kinds of businesses across most industry sectors, and, whether a company is soliciting sales or bidding on contracts, time and time again I’ve seen how the lack of a strong strategic sales process has stopped them from getting a return on sales or an optimal win rate on bids.
In a contracting company, a strategic sales process that is not cost-effective looks like committing resources to bids when they don’t necessarily have the relationships to win the work.
If you’re a company that bids on contracts, you probably have your finger on the pulse, so you always hear when a big piece of work is coming to market. Then, when you see the announcement, you excitedly run a bid review, gain approval to commit resources and prepare your bid. The problem is the bid is normally won before it goes to market due to existing relationships.
Whilst this is not always the case, it seems to follow the 80/ 20 rule. This can lead to committing resources to build a high-quality bid, engaging with the customer and their procurement team, only to be disappointed when you find you have been unsuccessful. The client loved the bid, all your engagements were positive, everything seemed on track.
So, what went wrong? Why is your win rate so low?
In the case of a contract or project bid, you may have had your ear to the ground, but did you even engage with the company soliciting bids before then? To win a bid often requires establishing relationships with the key decision makers a year or even two years before the request for bids comes to market. Your level of engagement with the company before bidding, along with proving you have enough market intelligence to ensure a compelling solution, are what determines your success rate.
Don’ forget, if you have managed to get to the second round of a procurement cycle, the client already thinks you are capable. At this stage the client is looking to buy trust. In other words, by the second round, the procurement team will have two or three bidders they think capable and the winner will be the one who is most trusted—which requires a relationship.
In a manufacturing, distribution or service business where there are many accounts, the sales people all seem to be busy. The sales pipeline seems to be full, but the sales still don’t meet expectations.
In cases like this, you need to consider whether you’re measuring the right drivers, or if you know what the real-time focus is for your sales team. Is there any differentiation in the sales approach? What is really in the pipeline and how visible is it?
The Trust Cycle
A good strategic sales process doesn’t ignore the need to factor time into a sale. Investing in your customer relationships includes acknowledging that the trust cycle often takes time.
There are three parts to the trust cycle: meet and greet, test and trust, becoming a trusted supplier. Going from meet and greet to test and trust to trusted supplier takes one to two years in any market, regardless of what you’re doing. It’s just how long it takes humans to trust each other deeply, and for you to demonstrate you can do what you say you can do whilst differentiating yourself from your competition.
I have a tool I use with my clients to help determine where they are on the trust cycle with their key customer relationships. Most people aren’t where they think they are when it comes to the trust cycle. Often people can assume they’re trusted by a customer even when they haven’t done any work for them yet. Or they have carried out work, however for some reason the dynamics of the organisational relationships have changed.
Why does this happen? Because the depth of relationships isn’t there, the trust isn’t there and people underestimate the time that takes to get a trusting relationship. They don’t factor it into the sales process strategy.