By Michael W. McLaughlin
Many professional service providers are disheartened when they learn they’re competing for work against an incumbent firm. After all, they reason, the incumbent enjoys every conceivable advantage, including relationships with client decision makers, a track record of success, and knowledge of the client’s business environment.
It’s tempting, though mistaken, to conclude that the incumbent is a slam dunk to win the work. In fact, the incumbent’s advantage is often a castle of sand. Research shows that many clients are willing to switch professional service providers with the slightest provocation. Savvy competitors know how to create a competitive edge and unseat even an entrenched incumbent.
Why You?
It’s true that some clients make decisions on which provider they’ll hire before the selection process begins. They may create the illusion of a competitive selection process to obtain multiple proposals—and fee estimates—to keep the incumbent honest, or to satisfy internal procurement policies.
Of course, you can’t expect a client to reveal that it’s a rigged game, at least not explicitly. Still, you need to figure out the answers to two questions before launching headlong into the sales process:
Ordinarily, I agree with the advice of many sales experts to focus on the client’s needs, not ours, as we proceed through the sales cycle. But when battling a strong incumbent, begin the sales qualification process by testing what the client knows about you to discern the client’s intent.
If the client answers the two questions above with a clueless stare and lots of “ums” and “uhs,” you may be grist for the competitive mill. Don’t expect clients to recite, chapter and verse, your firm’s qualifications. But listen for a good reason why they’ve invited you to the party.
Beyond Familiar Themes
When pursuing new client work, too many service providers reflexively rely on familiar themes: the strength of the firm, the expertise of the team, access to “best practices,” and past experience. Certainly, these are important parts of any service offer, but relying solely on this strategy will likely result in another victory for the incumbent.
Get your prospective client’s attention by demonstrating—beyond a doubt—that your team has achieved stellar results on similar projects in the client’s industry. It’s helpful to have a past client stand up and endorse your work, as long as that experience connects directly with the new client’s perception of what you would need to do for the current project.
A challenger must be creative to get a leg up on an incumbent. So think beyond the usual claims to come up with compelling reasons the client should leave the comfort zone an incumbent provides.
Ignorance Can Be Bliss
Every client project impacts one or more groups of people, including customers, employees, shareholders, competitors, and suppliers. Recognize this and find ways to tap those sources of potential information.
Before you submit a proposal, use your resources to identify those who are closest to the issue and engage them in discussions. That will give you an opportunity to understand the situation from different angles.
Here’s your chance to turn the old saying, “knowledge is power” upside down. As the challenger, no one expects you to be in the know like the incumbent is. That frees you to start at square one, ask dumb questions, and try out radical what ifs. It’s not always a bad thing to be blissfully ignorant—as long as you learn fast.
What you glean will give you ammunition to create project-specific differentiators, not just generic marketing messages. Many incumbents fail to gain this perspective, relying instead on their existing knowledge and the assertions of client sponsors.
Everyone Gets What They Pay For
It’s not unusual for a service provider to offer to complete a small project for little or no fee to demonstrate worthiness. This idea, though attractive on paper, often backfires in practice.
Most clients recognize the “free” project for what it is—a poorly disguised selling technique. You often achieve little buy-in from clients for freebies, especially when client resources are necessary to help with an assignment.
On one occasion, a client executive showed me a report that was the result of a competitor’s free study. As I leafed through the report, I was impressed with its quality, depth, and conclusions.
But the client disagreed and said that the free project lacked the rigor the client would have expected in a paid project. Even high quality work couldn’t overcome the “you get what you pay for” perspective.
The freebie’s ugly cousin is the “discounted fee” project. To overcome an incumbent’s advantage, some service providers offer to complete short, well-defined projects for a reduced fee. Theoretically, once you complete the introductory project, then you raise fees to a profitable level.
This is supposedly like a retailer’s traditional loss-leader strategy. The problem with this approach is that even if you win, which is far from certain, you can be stuck with a long-term problem. If you set a low baseline on fees, you shouldn’t be surprised to encounter stiff resistance to raising rates later.
No-fee and low-fee projects are desperate ploys that devalue your expertise and don’t necessarily result in ousting an incumbent. As always, there are exceptions to every rule, but relying on fee gimmicks to win new work is a sure-fire loser. If you feel compelled to make such an offer, cross your fingers and hope the client refuses to accept it.
Instead, approach a competitive situation against an incumbent with tenacity, creativity, and insight. Leave the tricky fee arrangements back at the office. You’ll win more and earn more in the end.
 |
 |
 |
 |
 |
 |
 |
 |