How does a small firm get the attention of the monster companies?
Most of the time, bigger firms are so bureaucratic and risk-adverse —and their buying operations so tied to the tried-and-true monster suppliers—you can't offer any form of marginal improvement to get in the door. You've got to make an offer they can't refuse.
Sure, the entrenched competition will be out there making killer offers too, and with track records to prove they can deliver. To make matters worse, your competition's sales teams have probably worked for years to develop personal relationships with the key players inside each customer's buying operation, shepherding them through more "special events" than you could count. In other words, your competition has made itself the devil they know.
Which is why you have to do something radical. You can't get a contract by offering a somewhat lower price or somewhat faster delivery. The first time out, there's just no reason for the buyer to risk his reputation by believing in you for that kind of payback.
Rather, you have to buy your way in the door with a transformative value proposition with almost zero risk attached. Essentially, you have to make it seem dunderheaded not to do business with you—it's a no-lose proposition.
Case in point is the Indian outsourcing business Wipro. Starting in the late 1980s, it came seemingly from nowhere to wiggle its way around the established technology-service providers and into the hearts of big customer after big customer. Its modus operandi was to offer something outrageous—significantly higher quality with a massively lower price—and then over-deliver on that promise by orders of magnitude. It was stunning, and the buyers who went with them very quickly looked like heroes in their organisations. No wonder it took only a couple of decades for Wipro to grow to a $3 billion global operation with nearly 80,000 employees.
Similarly, in its early days in the mid-'70s, the consulting firm Bain & Co. told potential clients, "You don't need to pay us very much upfront. Down the road, just pay us a percentage of the additional profits our recommendations are sure to earn you." With that kind of upside-only proposition, it's not surprising that Bain was able to get a foothold in an industry that was already overcrowded with brand-name firms.
Along with their almost too-good-to-be-true value propositions, both Wipro and Bain possessed a second critical quality that won them clients in their start-up days, and that was fire. Their sales representatives may have been well-educated engineers and MBAs, but the best of them still displayed a certain religious fervor about the unmatched value their company could deliver. Their presentations would leave behind converts, who wouldn't be saying, "Hmm, interesting," as in the typical post mortem, but: "Did you see the way those people believe in themselves? Did you see the fire in their eyes? They make me believe too."
So, not easy, but there are your marching orders. If you want the big guys to at least hear your proposal, the promise of your proposal has got to blow them away, with an outsize upside and minimal downside. And once in the door, you have to blow them away again, with your passion. Together, that's the foundation upon which winning enterprises are built.
Posted 27 August 2009 : Director.co.uk
