In an ideal world you would never have competitive bidding. But, hey, check it out. The world we live in is not ideal. Buyers continue to make us compete for business. So how do the best sales people survive and thrive? It’s not that they never bid. But they do it on their own terms.
All sales are negotiated at some point
Think about the “bidding” process itself. Buyers, to be sure they are getting equivalent bids from all bidders, usually write a specification or some other form of “bid package”. The best sales people are involved in the preparation of the specification.
Take for example a contract to provide office supplies to large corporation. The office supplies are available from a large number of similar manufacturers. So in theory competitive bidding would yield the lowest price for each product. The clever sales person works with the buyer to have the specification written around a particular service that sets him apart. Perhaps they have the systems in place to deliver the office supplies to a cabinet in each department. Or will maintain an on site store for office supplies where the customer is only billed when the items are taken. If the specification is written to provide those services unique to you, chances of winning improve dramatically.
Let others compete for the business on your behalf
In the construction business architects design the building and specify how it is to be built. When a lighting fixture manufacturer convinces the architect to require their products then all the construction companies will include those light fixtures in their bid. No matter which construction company wins, the lighting manufacturer gets the business. The best sales people know where in the process the decision to specify their product is made and they focus their attention there.
All Bids aren’t really competitive bids
Government buyers are constrained by law and regulation in the competitive bidding process. Some large corporations also have strictly enforced buying processes. But there are some competitive bidding situations where the buyer wants to buy from your company but needs to have a “price check.” In that case it is not really a true competitive bid. “The fix is in” so to speak. If you are the favored company then be prepared to justify your price should it be unfavorably higher than other bids. If you know you are not the favored vendor, then you have to decide whether this pricing exercise is worthwhile. Great sales people maintain excellent relationships with their customers so they will know when “the fix is in.”
Turn the competitive bidding process to a negotiation
When I worked for a national safety products distribution company, we received a bid request to supply safety products to a railroad company. The stated goal of the buyer was to reduce their cost of purchasing safety items by 5% in competitive bidding. In other words “we want the distribution company to supply the same stuff for less money.”
Our national accounts team met with the purchasing team and their senior safety management team. The national accounts team turned the discussion from saving 5% by competitive bidding to reducing the overall incident rate of workplace accidents. During the meeting they learned the most common accident was railroad workers getting struck by trains because they weren’t seen at night. The safety products company committed to reducing the cost of workplace safety incidents by 20%. They won the business and developed a line of reflective apparel that made railroad workers highly visible at night. The overall savings to the railroad was much greater than would have been achieved by reducing the purchasing price by 5%.
Best sales people know the customer well
The champion sales person gets to know the purchasing team at his customers. By building a long-term, mutually respected relationship, they can ask the important questions of their customer to decide whether participating in a competitive bid is in their best interest. When the champion sales person chooses not to bid, he explains the reason to the buyer their reason and if appropriate helps the buyer seek other companies to bid the project.
To learn more sales secrets see Chapter Nine, Building Rapport, in Secrets of the Softer Side of Selling to learn how to earn buyer’s respect. For even more sales help, join our FREE Sales Club! “See” you next week.
Don Crawford & Lois Carter Crawford