One is the loneliest number when it comes to sales
There is no sales force. We’re not selling a product, we’re providing a bid service. I can crank out the bids with the help of my staff. Should there be more to sales or am I smart to keep things lean?
Thoughts of the day: Responding to bids is highly competitive. Companies that want to grow margin learn how to get additional business without being the low bidder. The owner of a growing firm can’t be its only salesperson.
In bidding, the greater fool theory takes hold. An enthusiastic optimist bids less in order to get the work. A qualified firm offers an unusually low price to keep cash flow going or to build its portfolio in a particular niche. An unqualified firm sneaks in and steals the show with a good bid. Over time, bid prices decline and margins deteriorate.
There are advantages to pursuing work through bidding. Getting onto bid lists can increase a company’s pipeline of opportunity. Bidding can level the playing field, limiting a favored seller’s influence. Publication of bid results can reveal information about competitors.
Once your company has submitted a number of bids, it’s time to evaluate results. Are you winning anything? Or, coming closer to winning? For example, are you moving from second runner-up to first runner-up? Can your company do the work at the winning bid’s price and make a profit?
If you can answer “yes,” keep going with more bids. More than one “no” answer? Quickly change with your bidding process. Or, quit bidding — figure out what, when, why you lose — then avoid those kinds of bids. Losing bids means wasted effort. Redirect energy into more productive sales activities. Assign someone to working a list of targets.
Look for companies that don’t typically bid or that have a reputation for working with key suppliers. Seek out buyers with unique and constantly evolving requirements that, when met, eliminate most other suppliers. Invest in getting to know those buyers. Find out which ones will purchase without going through sealed bids.
Lead the market rather than following it. Be a problem solver and get favorable sales treatment from forward-thinking prospects. Partner with buyers to develop custom solutions in exchange for preferred supplier status.
Want to build exit value for your company? Commit to building a sales and marketing force. One reason most companies participate in a bidding process is because they don’t get enough work from other means. Break the cycle by thinking long term.
It may take a year or more to build an effective sales and marketing team. The sooner you get to work ramping that up, the sooner you’ll see the results. And the less vulnerable your company will be, as it no longer depends on you, the owner, for the next sale.
Think you can’t afford to invest in marketing and sales? Consider the margin your company leaves on the table through competitive bidding. Once you get through the ramp-up cycle, a sales and marketing force will pay for itself in multiple ways. Your new team should produce higher margins, greater volume and a better match with ideal customers who are less difficult to service.
If you don’t want to manage or can’t afford to build a full-time sales force, consider a rep network. Look for people who are already selling to your target market. Get them training and tools to help them sell your offerings. Help them to increase their income by expanding their portfolio.
Looking for a good book? Try “Building a Winning Sales Force: Power Strategies for Driving High Performance” by Andris A. Zoltners, Prebhakant Sinha, and Sally E. Lorimer.
Andi Gray is president of Strategy Leaders Inc., strategyleaders.com a business-consulting firm that specializes in helping entrepreneurial firms grow. She can be reached by phone at (877) 238-3535. Do you have a question for Andi? Please send it to her, via email at AskAndi@StrategyLeaders.com or by mail to Andi Gray, Strategy Leaders Inc., 5 Crossways, Chappaqua, NY 10514. Visit AskAndi.com for an entire library of her articles.