Jeffrey Gitomer November 12, 2013
November 11, 2013
By Jeffrey Gitomer
November 12, 2013
“They get bids for everything and always take the lowest bid.”
“They send out an RFP and I can never speak to the decision maker.”
“We’re becoming a commodity. All they do is take the lowest bid.”
November 12, 2013
“They get bids for everything and always take the lowest bid.”
“They send out an RFP and I can never speak to the decision maker.”
“We’re becoming a commodity. All they do is take the lowest bid.”
“It’s the government. They have to take the lowest bid.”
Many companies have become smart buyers, but many have become too smart.They’ve refined the buying process so far that they have precluded thewords “quality” and “value” from the buying process AND they have takenthe words productivity, ease of use, and morale out of the deliveryprocess.
The typical request for proposal (RFP) has a bunch ofstandards about what has to be offered by the vendor, but far too little (or nothing) about what happens after the company takes ownership. They have the “specs” in the RFP, but not the details of use, value,productivity, or morale.
The major flaw with the RFP process isthat the people conducting the bidding are not the people who use theproduct or service once the bidding is complete. Nor, for the most part, do they care.
The main goal of bidding is NOT get the best product. The main goal of bidding is get the cheapest price. And oftentimes that precludes the best product. It also lowers the profit of the companydoing the bidding. Long-term, this is not good for the survival of acompany.
REALITY: “The customer took the lowest bid” is as bogus as “the dog ate my homework.” The fact is you let the customer controlthe selling/buying process. Not good.
Many companies have become smart buyers, but many have become too smart.They’ve refined the buying process so far that they have precluded thewords “quality” and “value” from the buying process AND they have takenthe words productivity, ease of use, and morale out of the deliveryprocess.
The typical request for proposal (RFP) has a bunch ofstandards about what has to be offered by the vendor, but far too little (or nothing) about what happens after the company takes ownership. They have the “specs” in the RFP, but not the details of use, value,productivity, or morale.
The major flaw with the RFP process isthat the people conducting the bidding are not the people who use theproduct or service once the bidding is complete. Nor, for the most part, do they care.
The main goal of bidding is NOT get the best product. The main goal of bidding is get the cheapest price. And oftentimes that precludes the best product. It also lowers the profit of the companydoing the bidding. Long-term, this is not good for the survival of acompany.
REALITY: “The customer took the lowest bid” is as bogus as “the dog ate my homework.” The fact is you let the customer controlthe selling/buying process. Not good.
REALITY: Ifyou follow the customer’s RFP requirements you will lose even if youwin. If you win, it’s likely you did at a severe reduction of price andloss of profit. Not good.
That’s the bad news. Let me give you the good news, and the sales news…
There are several strategies you can employ to get around the biddingprocess, or legally and ethically change the bidding process. Here aresome ideas you can begin to use immediately:
1. Ask for a clause to be put into the RFP that states all claims must be backed up with customer testimonial videos as proof. Any procurement department should be happy to add this clause intotheir bidding process. It will assure them that everything being claimed will come to pass. This will also help in establishing the reality ofinstallation, ease-of-use, and long-term serviceability. PROVE IT TO WIN IT.
2. Request that the people who actually use the product or service you’re selling be more involved in the selection process. Especially as it relates to their actual experience and their projected needs. This is not as difficult as it sounds, especially if you canapply internal pressure to senior management where your product will beused. Keep in mind that procurement and purchasing don’t actually usewhat they purchase. They just buy. They’re relying on the person orpeople who made the INTERNAL request, and will often get their inputbefore making a final decision.
3. Make an appointment with the CFO. He or she is most interested in making a profit, not just saving a dollar. Make your case against taking the lowest price and in favor of making a profit. RULE OF SALE: The higher you go to make your presentation, theeasier the sale becomes.
4. Have an active social media presence that is easily findable, so your reputation is both visible and impressive. The customer will check you out BEFORE you get there, and may use it as part of the decision-making process.
4.5 GAIN BETTER INSIGHT TO THE PURCHASE OF YOUR PRODUCTS AND SERVICES. Talk to the person who MAKES the budget, not the person who spends it. Makeservice response time a mandatory part of the bid. Talk to thoseresponsible for what happens AFTER purchase, not the people buying it.Make certain that third-party proof, in video, is a major part of yourproposal.
CAUTION: The bidding process is often tightlycontrolled by those who execute it. The only people likely to influencechange of modification are C-level executives. Get with them as part ofyour normal selling process.
NOTE WELL: Every company, even thegovernment, has “preferred vendors.” People who have achieved a “higherthan equal” status. Become one of them.
Jeffrey Gitomer isthe author of twelve best-selling books including The Sales Bible andThe Little Red Book of Selling. His best-selling new book, 21.5Unbreakable Laws of Selling, is now available. For book tour dates andinformation about training and seminars visit www.gitomer.com andwww.gitomerVT.com, or email Jeffrey personally at [email protected]
© 2013 All Rights Reserved. Don’t even think about reproducing thisdocument without written permission from Jeffrey H. Gitomer and BuyGitomer. 704/333-1112
That’s the bad news. Let me give you the good news, and the sales news…
There are several strategies you can employ to get around the biddingprocess, or legally and ethically change the bidding process. Here aresome ideas you can begin to use immediately:
1. Ask for a clause to be put into the RFP that states all claims must be backed up with customer testimonial videos as proof. Any procurement department should be happy to add this clause intotheir bidding process. It will assure them that everything being claimed will come to pass. This will also help in establishing the reality ofinstallation, ease-of-use, and long-term serviceability. PROVE IT TO WIN IT.
2. Request that the people who actually use the product or service you’re selling be more involved in the selection process. Especially as it relates to their actual experience and their projected needs. This is not as difficult as it sounds, especially if you canapply internal pressure to senior management where your product will beused. Keep in mind that procurement and purchasing don’t actually usewhat they purchase. They just buy. They’re relying on the person orpeople who made the INTERNAL request, and will often get their inputbefore making a final decision.
3. Make an appointment with the CFO. He or she is most interested in making a profit, not just saving a dollar. Make your case against taking the lowest price and in favor of making a profit. RULE OF SALE: The higher you go to make your presentation, theeasier the sale becomes.
4. Have an active social media presence that is easily findable, so your reputation is both visible and impressive. The customer will check you out BEFORE you get there, and may use it as part of the decision-making process.
4.5 GAIN BETTER INSIGHT TO THE PURCHASE OF YOUR PRODUCTS AND SERVICES. Talk to the person who MAKES the budget, not the person who spends it. Makeservice response time a mandatory part of the bid. Talk to thoseresponsible for what happens AFTER purchase, not the people buying it.Make certain that third-party proof, in video, is a major part of yourproposal.
CAUTION: The bidding process is often tightlycontrolled by those who execute it. The only people likely to influencechange of modification are C-level executives. Get with them as part ofyour normal selling process.
NOTE WELL: Every company, even thegovernment, has “preferred vendors.” People who have achieved a “higherthan equal” status. Become one of them.
Jeffrey Gitomer isthe author of twelve best-selling books including The Sales Bible andThe Little Red Book of Selling. His best-selling new book, 21.5Unbreakable Laws of Selling, is now available. For book tour dates andinformation about training and seminars visit www.gitomer.com andwww.gitomerVT.com, or email Jeffrey personally at [email protected]
© 2013 All Rights Reserved. Don’t even think about reproducing thisdocument without written permission from Jeffrey H. Gitomer and BuyGitomer. 704/333-1112
