By LARS HENNINGSSON and RUPERT FLORES
It is now more than 25 years since we started to work in sales, and facing establishing our very first pipelines. Like all other sales executives and account managers, the first time it was done we were just following the guidelines in the same way one was instructed to complete the sales reporting, update the CRM, submit expense claims etc. It was later, using the pipeline on a daily basis, that it became clear how beneficial it is. Where colleagues saw control, we saw help to reach the quarterly sales objectives. When others filled it in superficially because they had to do it, we saw that the more rigorously it was done the better was our control over proposals and meetings. Where colleagues forgot to follow up on the proposals that they delivered weeks ago, we forgot none.
What was the result? Objectives were reached quarter after quarter, year after year. In more senior roles, as sales director, and as principal consultant, the pipeline became the fundament for the sales forecast. We learned how big the impact of active pipeline management was on teams and on colleagues, and also experienced how limited the understanding of the way the pipeline works can be also at senior corporate levels. In fact, what is called the pipeline can in some companies be just a long list of dead or obsolete opportunities generated from the CRM.
There are different pipeline models. In this book we use the one we like the best. But the most important is not the model, but that you actively use whatever pipeline your company has signed up for. It will help you to reach the objectives, just as it has helped us over the years. And it still does.
There are some good sales executives in most companies. But a good sales executive taking control over his activity wins many more deals and new accounts than the equally good ones that do not use the pipeline to guide their activities. If currently working as a sales executive, this book will help to establish firm control of the pipeline, and thus of your chances of success. You will learn to visualize in what direction the business is going, and what you need to focus on when there is still time to influence the outcome. It also makes it possible to do a meaningful self-analysis at the end of the year.
As a sales leader, managing director, or CEO, the book is about how to leverage a stronger and more meaningful pipeline focus to increase the sales of your company. Rightly applied, a forceful pipeline focus can add millions to the top line and be the enabler of a fundamental transformation of a company's sales organization. The good news is that doing so does not require large investments in more reps, new IT systems or software. Stronger pipeline focus only requires a minimum of training, and a different leadership approach. It is equally applicable in B2C and B2B, though our personal experience says that the improvement opportunity often is larger in B2B, perhaps because the longer sales cycles make it more likely that sales executives lose track of prospects and deals over time.
By LARS HENNINGSSON and RUPERT FLORES
Many companies rely on tenders and formal buying processes to procure the goods and services they need. Studies show that more than half of what B2B companies buy, perhaps as much as 60%, involves procurement and purchasing professionals. And their weapon number one is the tender. Competitive pressures, a larger share of operations being outsourced, and the increased internationalisation of sourcing are factors believed to have played important roles driving this development. Colleges and universities furthermore supply a seemingly endless flow of business graduates, and we now see procurement-trained analysts and managers also in mid-sized and smaller companies. In some countries and industries, a tender tsunami is overwhelming tender desks and sales executives, indicating the need of a more strategic approach.
To be able to deal with tenders and purchasing organisations thus becomes a success criterion for the B2B seller. And our research and experience indicate that many salespeople and sales organisations struggle here. The capability, the 'know how', is just not there. Winning tenders is hard work, the margins of error are small, and a mishandled tender response can hurt your company's chances to gain business from a certain client for years. Most sellers learn the hard way, from their mistakes, as there is little relevant training and guidance available on what is key for success in this area.
While there are thousands of books and articles on sales, very limited attention has been given to winning tenders, even though being good at tenders can determine a B2B salesperson's career. In many industries, competitive bidding is the rule of the game and the sales executive that can master the process is looking at winning very large deals often worth millions of euros. This book aims at filling the gap and provides the structure and insights to help the seller be successful.
What exactly then is a tender? Basically, it is a competitive bid where a buying company has invited several potential suppliers to bid for their business, providing some information and specifications in the tender documentation. In most cases, a formal process is then followed in which the different providers' bids are evaluated. And often the buying company's purchasing or procurement department drives the process. The invitation is typically called Request for Proposal (RFP) or Request for Quote (RFQ). Historically, tenders have been most common for commodities, construction projects, major engineering works and in public sector purchasing. However, tenders are now also used in other industries, in many cases becoming the default for how companies buy.
This book provides the best practices we have discovered and helped develop over many years of work with major corporations across the world. The temptation is always to cut corners, it happens all the time. Because of time pressure, because of having new people in the team, or just because people do not know any better. What we will argue is that though there may be corners that can be cut, there are a few fundamentals that you must get right every time, And, if you do get them right, the success rate of winning tenders goes up dramatically.
Our research and experience show that comparable sales teams can have an up to 2,000% different win-rate on tenders. These companies having similar product and services portfolios, similar organisational set-ups, people with the same profiles, and as far as we can judge more-or-less the same level of brand recognition. The difference is the way they work the tenders, how they align internally, how they price and how they choose to interact (or not) with prospective clients. As we will see, the implementation of the business awarded is also crucial for the result.