In an earlier article (‘Do you understand the mind of your buyer’, April 2020) I explained why consulting firms need to ready themselves to deal with more knowledgeable buyers. However, engaging with more knowledgeable buyers is not the only landmine to watch out for when selling into large organisations. Here are some of the other ways a service provider can come unstuck.
1. The person who claims to have the budget and authority to engage you actually doesn’t. This is very common. Many people in a large organisation, especially people who may have been newly recruited into the company to solve a specific problem, like to think they have a totally free hand to award business externally but few actually do in practice.
2. There is internal expertise available to do some (all) of the work but the person who has asked you to bid has not properly qualified this yet, often because they are not sufficiently aware of the resource themselves. This scenario can be a particular risk to those practices whose propositions include change/programme management.
3. Many requirements have more interdependencies than are realised at the outset – and the person who has asked you to bid may ‘not know what they don’t know’. Often this can come to light at the purchase order/contract approval stage because somebody in the approval chain will ask the right questions and throw the proposed scope of work up in the air. An associated occurrence is that similar sounding initiatives/contracts can suddenly come to light and you are then perceived to be replicating something which already exists. This is not an ideal place to be – especially if you are charging more!
4. The procurement function is kept at arms-length until the last minute. This is increasingly unlikely to be a recipe for a smooth and successful sale, particularly if the organisation operates a full or partial preferred supplier list and you are not on it.
5. Your proposed pricing cannot be easily linked to specific outcomes. Remember that the person who has asked you to bid needs to be able to sell your proposal to their approval chain. They can sometimes be blinded by the urgency or complexity of their need and ‘want you to get started straightaway’ - the less tangible the business outcomes are, the harder it will be to sell your solution for approval. In your understandable desire to support the internal customer you may also take a risk and begin working on the project before receiving a fully approved purchase order...
6. You assume that your ‘lead contact’ for the requirement will be working on your behalf inside the organisation to ‘smooth the way’. Vary rarely have I seen a requirement owner do this really effectively, especially when it comes to consulting or professional service engagements. Too often they perceive that presenting their approval chain with a fait accompli will be more likely to result in a positive outcome.
7. Your proposal is not as competitive when broken into constituent parts – for example if it includes an element of project management. When it comes to the value for money question there are lots of ways service providers can come unstuck if they are seen to be charging exorbitant day rates for activities that could be just as easily performed internally or obtained via a direct resourcing route.
8. You believe people when they ask you to work free as a lead-in to a definite engagement/business opportunity. Even if you do a ‘fact finding’ piece of analysis for nothing you still have to convince the approval chain that you are the most credible and capable service provider for any subsequent piece of work. See point 6 above, this could be a big risk if insufficient internal positioning is taking place on your behalf.
9. You overestimate the value of your ‘executive relationships’. I am not saying these are unimportant, they can be very useful indeed, but wouldn’t you rather be chosen because you are regarded as the most capable and credible company to do the work, rather than being appointed because ‘so and so’ said to give you the contract. In today’s climate you need people to recommend your company to others based on what you can do, not who you know.
The good news is that all these points are manageable. BUT consultancy service providers do not always know what questions to ask, who to ask and when to ask them. To avoid being blindsided when dealing with large buying organisations, it is critically important that you read between the lines of what you are told. If you don’t, then your sales strategy might look good above the surface but underneath it could be fatally undermined.
Global Head of Services Procurement, Hays Talent Solutions
Paul is globally responsible for how Hays Talent Solutions support their clients in engaging Statement of Work based services, which of course includes management consulting.
Paul is a member of the Chartered Institute of Procurement & Supply and Black Belt trained in Lean Six Sigma. He has long experience in the management consultancy landscape as a buyer, client and service provider and this accumulated know-how, underpinned by the practical insights gained from leading a variety of transformational change initiatives over the years, makes him ideally suited to offering our readers a buy-side perspective on our industry.