“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 the words ‘quality’ and ‘value’ from the buying process AND they have taken the words productivity, ease of use, and morale out of the delivery process.
The typical request for proposal (RFP) has a bunch of standards 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 is that the people conducting the bidding are not the people who use the product 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 company doing the bidding. Long-term, this is not good for the survival of a company.
REALITY: “The customer took the lowest bid” is as bogus as “the dog ate my homework.” The fact is you let the customer control the selling/buying process. Not good.
REALITY: If you follow the customer’s RFP requirements you will lose even if you win. If you win, it’s likely you did at a severe reduction of price and loss 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 bidding process, or legally and ethically change the bidding process. Here are some 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 into their bidding process. It will assure them that everything being claimed will come to pass. This will also help in establishing the reality of installation, 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 can apply internal pressure to senior management where your product will be used. Keep in mind that procurement and purchasing don’t actually use what they purchase. They just buy. They’re relying on the person or people who made the INTERNAL request, and will often get their input before 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, the easier 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. Make service response time a mandatory part of the bid. Talk to those responsible for what happens AFTER purchase, not the people buying it. Make certain that third-party proof, in video, is a major part of your proposal.
CAUTION: The bidding process is often tightly controlled by those who execute it. The only people likely to influence change of modification are C-level executives. Get with them as part of your normal selling process.
NOTE WELL: Every company, even the government, has ‘preferred vendors.’ People who have achieved a ‘higher than equal’ status. Become one of them.
Reprinted with permission from Jeffrey H. Gitomer and Buy Gitomer.
About the Author
Jeffrey Gitomer is the author of The Sales Bible, Customer Satisfaction is Worthless Customer Loyalty is Priceless, The Little Red Book of Selling, The Little Red Book of Sales Answers, The Little Black Book of Connections, The Little Gold Book of YES! Attitude, The Little Green Book of Getting Your Way, The Little Platinum Book of Cha-Ching, The Little Teal Book of Trust, The Little Book of Leadership, and Social BOOM! His website, www.gitomer.com, will lead you to more information about training and seminars, or email him personally at [email protected].