How many of your colleagues are currently working on pitches or proposals where they have concerns about whether they will really be successful? How much time has your firm invested in the last year on proposals and beauty parades, where it would seem they were just ‘pipped at the post’?
Responding to every tender invitation that comes our way does not necessarily win the profitable business that secures long-term fee income and growth targets. So why is such an awful lot of time and energy being used by professional services firms in this way?
We would suggest it may be for a number of reasons.
Firstly, there’s panic. Some professionals tell us they panic when an invitation to tender lands on their desks. This is either because they lack confidence in their future fee income or feel pressure to expand their client base. Some on the other hand are simply blinded by the potential fee size. But do firms really know why they have been selected?
In a pitch situation, it may well be because of their excellent standing in the market place; but it may also be that they are there to make up the numbers. If the latter is the case, is this the best use of a firm’s finite resources?
Another factor, which forces firms to repeatedly pitch, is the fear of creating a bad impression – they need to be seen as a player. To be a player they should give it their best shot, but without sufficient knowledge about the prospect and the time and energy to do an excellent job, they risk being an ‘also ran’. This will still result in wasted time and fees and may also ruin future chances when they really do want this client. If you choose to respond to a tender it should be a conscious business decision. Even if you do not think you will win this tender, you should believe that it will at least create a positive business impression of your firm, which in the long run will help you develop a stronger relationship with this prospect.
So what does make the difference between winning and losing? From our experience professional services firms are more likely to win a bid if they:
- Have prior knowledge of the client or their business,
- Understand the decision-making process,
- Have developed a relationship with all the decision-makers and their influencers this may include procurement professionals),
- Know the incumbent adviser and their strengths and weaknesses.
This is why we believe that when it comes to winning clients there’s a lot more to pitches than presentations and proposals. In fact we would go so far to say that in winning a client only 20% of the effort should be devoted to the pitch itself. In our experience, the remaining 80% should focus on getting to know the client itself and this should have been set in motion months before the pitch document lands on our desk. Whilst the rewards are great, this is obviously very time-intensive.
We would therefore suggest that firms need to be more focused about what business they want to win and what to pass up. This will enable them to employ their energies to achieve the maximum effectiveness – ie. winning the clients they really want in order to grow the business in a way they want it to grow.
A number of professional services firms are indeed beginning to do this. They are being more selective over the invitations to tender they respond to. As a result they have experienced increases in profitability and turnover.
But how do these firms reach such a position? Many start by pre-determining which clients they would ideally want to win. They look very closely at these organisations and assess how accessible this client would be to an approach. They also consider whether there is an opportunity, which would make them of interest to that organisation at this time. If now is not the right time, they wait.
These successful firms then put in place a plan, which enables them to build a very close relationship with their target prospects. The plan draws on various intelligence sources about each organisation. This allows the firm concerned to quickly become ‘up to speed’ on all the issues facing a prospective client and their industry. The plan also maps out key individuals within the prospective client organisation. These are the people who will have a bearing (direct or indirect) on any decision to appoint the firm as an adviser.
Having identified the key contacts these firms set about building relationships with them. They ‘matchmake’ individuals in their firm to these key contacts, in order to get close to them. These individuals form the prospective client team and people are selected according to their ‘fit’ with the key contacts in the client firm – either by way of expertise, interests and/or personality.
Where necessary, those fee-earners are giving relationship-building skills training. Yes, this does include presentation skills but also equips the individuals with other valuable skills and behaviours, such as:
- Questioning skills – to ensure they uncover the right information. This is more than just asking open-ended questions. It involves being able to make the client comfortable in answering our enquiries by the choice of question we use and when.
- Listening skills – knowing when to stay silent, using positive body language, using encouraging words and phrases, taking notes, cross-checking key words and phrases.
- Active listening – in addition to having strong listening skills, active listeners are able to give feedback. They do this by summarising facts and content in the messages the client has given.They also reflect on any feelings that may have been associated with the message. Active listeners are more able to uncover the true requirements a client has.
- Negotiation skills – to handle and overcome any objections in a positive manner.
We have heard firms say that with the introduction of procurement professionals in pitches and beauty parades, the concept of relationship building is dead. From our conversations with these professionals the complete opposite is true. Many are involved in the appointment of their organisation’s advisers to determine what value is being gained from the fee. This is not about securing the cheapest price. Instead, it is about looking at what the client gains from their relationship with the adviser – the technical and commercial advice they receive, the firm’s business insight, their support and ideas to help the client become a better business/organisation. The more valuable and ‘irreplaceable’ the relationship, the more likely the firm concerned will be retained or win the business.
Valuable relationships stem from trust being built between client and adviser. From our observations of the professional services sector, trust comes from a firm demonstrating three key attributes:
- Credibility – by having confidence, creating a good initial impact, being honest and delivering as promised.
- Competence – by demonstrating knowledge, having a good track record and expertise and also by asking searching but non-manipulative questions.
- Compatibility – by demonstrating genuine interest, active listening, adapting behaviour, showing we care and showing vulnerability.
Building a relationship and position of trust way ahead of any invitation to tender going out, gives the firm involved significant advantages over their rivals when the client does eventually set up a beauty parade. Their knowledge and closeness to the client is far superior and a potential barrier for their competitors to overcome. It enables them to know, not only what solution to offer the client, but also the way in which to offer it. They essentially make it as easy as possible for the client to say ‘yes’. As a result they go beyond merely answering the invitation to pitch document requirements and provide solutions that meet all the client’s aspirations and wants ‘off the page’.
There is definitely more to pitches than presentations and proposals. If you want to improve how your energies are best spent when it comes to beauty parades, concentrate more on what goes on prior to the invitation landing on your desk. If you build the right relationship in advance, you may in fact help the client write the pitch brief!
- The circle of success Published 5th June 2008
- Holding onto your Key Client Relationships Published 20th July 2009
- How to reel in the right fee Published 5th November 2008
- What makes the perfect pitch Published 31st May 2008