Background
It is a long established fact that sales people fall into (at least) two groups; ‘poachers’ and ‘gamekeepers’. The ‘poachers’ win the big new contracts, and then the accounts are often handed over to ‘gamekeepers’ to manage - with the poacher going off to chase more new business.
The scenario works well - until the contract is up for renewal. It is an industry acknowledged statistic that 70% of contracts are re-awarded to the incumbent; which means that 30% are lost to new suppliers. It is also recognised that the longer a contract runs, the better chance there is of making money, so a renewal will move a contract to new levels of profitability.
At the contract renewal stage, the incumbent supplier has to defend its position against teams of ‘poachers’ from competing suppliers, whilst depending upon the ‘gamekeeper’ to be the lead sales person. Whilst the gamekeeper is making lots of assumptions (and we know what they do for you and me!), the poachers are out asking all the right questions. The gamekeeper also has to do his day job of continuing to deliver service to the levels demanded by the SLA, agreed several years ago, whilst all the poacher has to do is concentrate on winning, with no accountability to the customer what so ever. The result is an uneven battle for a valued contract, which results in a 30% win rate for the poacher.
So how do incumbent suppliers overcome this problem?
There are a number of ways, some better than others:
Firstly, they could engage a ‘poacher’ for the duration of the bid – but this creates the issue of two sales people working one account. It can also cause issues with the customer unless it is managed well.
Secondly, for the duration of the bid they could engage a senior Bid Manager with no previous experience of the customer. This would overcome the danger of assumptions, whilst complementing and supporting the efforts of the ‘gamekeeper’, rather than competing. This Bid Manager need not necessarily be from within the incumbent organisation, as excellent people are available on a freelance basis for a short or long as you require them.
A third approach, and the one recommended by the author, is a combination of the previous option and introducing a ‘health check’ of the existing service. This is best achieved by engaging an independent third party several months prior to contract renewal. By giving this third party a clear and opened remit to meet with key customer representatives in the account on your behalf, they can establish a clear view on the quality of service currently being provided. This view should cover performance against SLA, relationship and contractual issues, plus other key information that will be vital in renewing this valued contract. The Bid Manager and the ‘gamekeeper’ could then use this information to shape a sales campaign and a proposal that is fresh, imaginative and consultative, rather than assumptive and potentially dull.
Proof Point
This approach worked well for me with a major UK bank several years ago. I was introduced to the account by one of two incumbent suppliers (they had a 40% share of the support contract), and promptly visited four key managers, armed only with a pen, an empty notepad and an open mind! They told me about all their concerns; how we had failed, what we had to do to fix it, and how long we had to achieve it – three months. I wrote to them all, told them what we intended to do, how and when by; and then set about ensuring we delivered, not selling to them until they agreed that we were back on track. Eventually they came to the market with an Invitation to Tender (ITT), which I managed whilst the ‘gamekeeper’ concentrated on her job of managing the account and the customers day to day expectations. After a long and tortuous process we won 100% of the business, knocking out our co-incumbent, and beating off an army of ‘poachers’ in the process.
In hindsight, we realised that as the incumbent we had stopped listening to the customer, communications had dried up, and we were at an impasse, which luckily we managed to break by adopting the approach outlined in this article.
Conclusions and Recommendations
It is often the case that customers don’t realise what a good job the incumbent is doing until they get a chance to review the service with a third party, and are often lured by the promises of ‘poachers’ with nothing to worry about other than winning. But once a customer has been lured away and realises what he has bought, he will rarely admit his mistake and return to his original supplier.
By adopting this approach, suppliers will create a situation that combines the advantage gained from being the incumbent, an independent view of your performance, and a ‘poachers’ attitude to the bid to renew, thereby maximising your chances of winning.
If you want more help, please contact the author on +44(0)777 929 7401 or via email at chris@gettogreat.co.uk
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