By Tom Searcy
“Why do they want to change their provider?”
This is the first question to ask a harpooner who brings you a whale-sized opportunity, or to ask yourself when you consider any RFP. Unless the whale has a compelling reason to replace a current relationship, it will take enormous effort to intrude. This question is worth pursuing, since often the real reasons for the whale to consider your company do not include changing providers.
We hear answers like this:
- It’s always good to know what’s going on in the industry.
- We’re always open to new providers if we can see a benefit.
- If you have a compelling advantage and are price competitive, we may give you a shot.
These are try-real-hard-and-hope-even-harder opportunities, usually not worthy of launching a boat to pursue. The subtext is often “free consulting.” You know that hunting is expensive, and you should have the odds in your favor to hunt. The Whale Hunters also advise that you watch for whale signs to know when the timing is right.
So, if the whale has a current provider for your products or services, what are the whale signs that tell you if a particular opportunity is good for hunting? We offer the “6 Ps to Replace a Provider”:
1. Preference. There has been a decision-maker change at the whale’s company. The new person isn’t a champion of the current provider, or, even better, is a past champion of yours. This is a great time to hunt!
2. Problems. There are gripes — and there are problems. Gripes are the unavoidable little issues of a business relationship. They are annoyances like late shipments, slow response times, incorrect packaging. Gripes do not rise to the executive levels of concerns, do not have a financial impact greater than around five percent, and have not significantly impacted your prospect’s relationship with a large customer. Whales do not leave their current provider over gripes.
Problems, however, cross those gripe thresholds and more. The business problems related to the current provider must be sufficiently significant that the whale will suffer the cost of changing suppliers in order to overcome them.
3. Price. Somewhere all buyers take a course that says, repeat the phrase “Lower your price” at every meeting. So, when a potential buyer meets with your harpooner, he or she will say; “We are looking at new suppliers as a way to lower our overall costs.” Sounds like an opportunity, I’m sure. However, this is a head-fake. If you want to know if the price comment means the whale is actually willing to change vendors, look for these qualities:
- There is a stated initiative to reduce costs in this area.
- A company-wide plan is in place to reduce expenses
- Specific cuts have been made to budgets
Without these compelling price initiatives, an installed vendor will come with a savings effort to match your price and stay in place. Combine that effort with the cost of change-over, and the incumbent will win while you finish second.
4. Politics. Much has been made of “top-to-top” selling, for a pretty simple reason — it works. In the past two months, we’ve watched three deals lost across several clients because the discrete top-to-top relationship had not been discerned in the qualifying process. Regardless of how compelling your argument is, if there is no top-to-top relationship, your opportunity is questionable at best. However, if it’s your competitor who doesn’t have a top-to-top relationship, then there’s an opportunity for you to establish and increase your odds.
5. Project. Is this a specialty or niche opportunity for which the whale is looking for expertise outside of its current provider? If this is a special project, and that project is big enough to constitute a whale to your company, then you probably have a shot.
6. Process. An increasing validation that we are seeing in competitive bid and vendor management processes is the “forced change” requirement. Companies are looking to validate that they have an objective process for selecting vendors that does not have inappropriate bias. Part of the expectation of the process is that it will produce a change in some portion of the overall vendor spend. If your target is operating under these requirements, clearly stated or clearly implied, then the process could very possibly indicate a good opportunity to hunt.
When you’re qualifying an opportunity, look for one of these doors to be open: preference, problems, price, politics, project or process. If you can’t say for sure which door might be open to you, don’t knock.
Tom Searcy has established himself as the foremost expert in large account sales. As an author, speaker, consultant and founder of Hunt Big Sales, Tom has helped his clients generate business in excess of $5 billion. Leading four companies through tremendous growth to over $100 million (from less than $15 million), Tom has perfected the process for consistently landing large accounts, which he has documented in his books, Whale Hunting: How to Land Big Sales and Transform Your Company (co-authored by Barbara Weaver Smith) and RFPs Suck! How to Master the RFP System Once and for All to Win Big Business.
Originally published: Oct 19, 2011