At the end of last year I had the opportunity to present a day’s workshop on Advanced Tendering.
The cohort of attendances were a terrific group and we spent a good deal of time talking about business capabilities.
When businesses think about capabilities they tend to think about the investments they make that drive their unique value. This is perfectly correct.
Importantly though, one of the most over-looked capabilities a business can have is the ability to acquire new clients / win new business. And it is a critical capability.
It is the lever on growth and renewal – bringing in sufficient new business to enable the business to expand.
So how do businesses develop capability and competency in winning new business?
Step 1 is to know how your target Customers buy. You need to understand this process if you want to be part of their supply chain.
Below is a checklist that can be easily applied to your next target opportunity. Take the time to find out the answers to these points ….
1. Know their procurement policy – understand the factors and requirements that shape how they bring new suppliers into their system. Also be conscious of the expectations and directives that may be applied to suppliers through their policy – this might include annual price reductions, payment terms, supplier collaborations, due diligence requirements etc;
2. Know their buying team – take the time to appreciate the individuals who make and contribute to procurement decisions. In my experience it is seldom the functional department head alone;
3. Understand their mechanisms for supplier engagement. Do they buy through open tenders, through personal selling, or from short-listed / pre-qualified entities (such as a Buying Panel). Know this and take appropriate steps to align yourself with the supplier engagement methodology;
4. Uncover relevant Contract expiry dates. If there is an incumbent holding a 2-year contract, know the details of when this expires and when the process for evaluation starts;
5. Know purchasing pre-requisites. Every business has them. This might be the necessity for a quality management system, an environmental management system, a safety management system, locally deployed resources etc. If you can’t satisfy the pre-requisites you are unlikely to ever do business with this target client;
6. Understand their position on preferences and feature-association. Many businesses and agencies are placing higher preferences on elements like local content, businesses that confirm a clear commitment to workplace and gender equality, employment of indigenous resources, social and corporate responsibility, community engagement, carbon footprint reduction, etc. Know these preferences and demonstrate alignment with clarity;
7. Know what is keeping your target client awake at night. Know their problems and you are given an insight into how you can save their day;
8. Finally, understand your target client’s latest strategies, directives and programs that guide their business and practices – many of these in turn inform procurement practices. Here are some recent real examples I have seen –
- Adoption of a simplification strategy, translating as a rationalisation of suppliers (good information to know),
- New management team and a new vision (translating to new areas of investment and capability development);
- Change and transformation to drive improved efficiency (watch for suppliers that resist change or cannot change – they’ll be the first ones to depart);
- Off-shoring functional activities, which provides disruption to staff, processes, business continuity, operational management etc;
- Investing in automation, machine learning, AI technologies (these are cost reduction measures and also help to prevent exposure to off-shoring and other people-based practices, which have been hit heard through the global pandemic).
On this last point in particular – know that change brings disruption and there is often opportunity in change. Be a proactive supplier, and be offering solutions to help your (new or potential) client through the change. Timing can often be everything.
If you think about these checklist points, there are many examples here that are not conspicuously sales-related, and can be approached with a target client in an enquiring and non-confrontational way. It’s what a good (new or prospective) partner would want you to know about them.
Winning new business is about having what your target client needs, but it also about meeting their specifications for how they buy. Close this gap and you will be well on your way to successful engagement.