How To Have Sellers And Buyers Collaborate To Maximise Project Value

Over the years, the gap between business development and project management has become wider than ever, and in turn, the gap between sellers' selling processes and buyers' buying processes has reached the size of the proverbial Grand Canyon. What we have is two distinct silos of people in business development and project management, and they concoct sales and implementation processes that are out of alignment with buyers' buying processes. So, it's becoming harder than ever for these people to work together as cohesive teams. And for many years this has been the accepted form. Business development folks go out to find new clients with new projects, and then project management folks take over to do the projects. But there is a huge problem. The project management folks are subject matter experts, and most of them look down on business development. So, any chance of communication between the project folks and the business development folks is nipped in the bud and the probability of communication between the two departments is lower than a snowflake's chance of survival in some of the more pestilential pits of hell. And this separated approach comes at a high price... Missing Peer-Level Match Missing peer-level match between buyers and sellers, so instead of real buyers, sellers are forced to prospect to purchasing agents. And since sellers know that the process is pathetically ineffective and frustrating, they don't want to use their subject matter experts in the sales process. Instead, they assemble legion-sized sales forces to roam the land, pound pavements and dial for dollars to find the next client. As a reaction to this dysfunctional sales approach, buyers have developed an equally dysfunctional buying approach; the proverbial peddle fodders, that is, purchasing agents and procuring departments. But purchasing agents are not subject matter experts, so they want to make life easier for themselves by creating easy comparisons between sellers and their services. They create an equal playing field for all players, and take all unique - and often the most valuable - sections out of sellers' solutions. And due to the lack of subject matter expertise, purchasing agents can't go beyond the veneer of sellers' offers, so they make superficial decisions. And these decisions had led to McKinsey & Co.'s sad discovery... <ul> <li>75% of solutions don't return a profit to the selling company</li> <li>50% of solutions don't deliver the value to the buying company</li> </ul> Some 84% of outsourced projects go over time and over budget. And it's not due to human incompetence. It's mainly due to the short-sighted policy that the procurement folks disallow the sellers to make direct connection with the real buyers, so they could jointly diagnose the problem and develop the optimal solution. The procurement folks know that the sellers, that is, commissioned salespeople, do everything in their power to sell something that makes the highest commission for them, not necessarily what buyers really need. RFPs and RFQs are merely defence mechanisms buyers put up to protect themselves from overly aggressive salespeople. No ROI analysis According to the 1995 Chaos Report by the Standish Group, in the $50-500 million annual revenue range, only 25% of companies conduct detailed ROI analyses before initiating projects. For small businesses this number is even lower. But buyers can't conduct ROI analysis simply because they can't be objective. Peddlers can't do it either because they have no subject matter expertise. They can only push harder for the sale. So, Procurement merely issues a task list and sellers can bid on it to perform the pre-determined tasks. There is no flexibility. Then sellers submit their proposals and Procurement selects one. sually one of the cheapest ones. Remember, there is no differentiation here. Apples are compared to apples as per the RFP. And then Procurement - usually with no subject matter expertise - makes a buying decision as to which solution to acquire. Smoothening The Kinky Romance Between Buyers and Sellers If we want to make sure that buyers and sellers make the ideal decision and implement the best solution, there must be a strong collaboration between four departments, that is, four partners... <ul> <li>The selling company's business development and project management teams</li> <li>The buying company's executive and user teams I want to encourage everyone to bypass procurement and go directly to the real buyers.</li> </ul> What is the major difference? Well, Procurement tries to protect the budget and is seeking low cost, whereas real buyers are seeking high ROI. So, we replace traditional peddling based on tricks with consultative selling based on diagnosis. And How Do Buyers And Sellers Change? Let's start where all projects start: Generating a sales lead. Sellers can generate sales leads almost 100% on autopilot using result-accountable direct response marketing. This allows readers, that is, potential buyers, to self-select depending whether or not the offer is relevant to them. Buyers go through an automated, education-based lead nurturing process, and when they need help, they request help from sellers. During this time sellers' business development teams, instead of doing cold prospecting grunt work, operate lead generation and lead nurturing systems. When buyers are ready to buy, they request personal attention from their selected sellers. And who is the selected seller? The company that provides valuable information. And watch the dynamic now... It's not commissioned peddlers who request meetings mildly - very mildly - interested but often wildly sceptical and apathetic purchasing agents, but self-qualified real buyers request meetings with subject matter experts who can diagnose buyers' situations in a consultative manner. Normally these subject matter experts work on projects, but now they meet highly qualified buyers and, instead of selling pre-packed one-size-fits-all solutions, they diagnose the buyer's unique situation, and jointly develop solutions based on value as opposed to price. I know this is strange but look at it this way... Surgeons perform surgeries, but they also meet patients to diagnose their situation and determine whether or not they really need surgery. And surgeons are seeking the truth not the next sale. That's why they're trusted. And that's why peddlers are not. And what happens is that buyers and sellers are no longer in an antagonistic relationship in which one tries to sell something and the other tries to avoid buying it. In the traditional model the objective is to sell something whatever it takes. Salespeople are compensated on short-term sales, even if the sale is made at the expense of a long-term relationship with buyers. And we know the reputation of such salespeople and companies. There is a reason why the whole sales profession has created a negative perception in the public's eyes. In this model buyers and sellers jointly decide what to do next. But the key is that by the time sellers meet buyers, buyers are pretty committed to making positive changes, and the lead nurturing process reassured buyers that the sellers are reputable and can deliver the goods. As we see, the traditional approach wastes a lot of money and the chances are very little that we can meet real buyers. Instead we can meet purchasing agents and do the traditional dog-and-pony show song and dance presentations. We have no chance to properly diagnose the situation, and are condemned to sell solutions to problems which we don't even know. We know only the solutions purchasing agents are seeking in their RFPs. Plan Of Action <ol> <li>Turn your sales army into a small and agile business development commando</li> <li>Instead of pitching purchasing agents, create an information library real buyers can read and learn about your stuff and self-select upon interest</li> <li>Make sure only subject matter experts meet buyer to maintain peer -level relationships</li> <li>Replace image marketing with education-based direct response marketing</li> <li>Put your subject matter experts and business development folks on the same pay structure, so they can collaborate instead of compete with each other</li> <li>Get your subject matter experts skilled in business diagnosis and force them to forget sales 101. They may use IT, legal or financial solutions, but they are addressing business problems</li> </ol> The traditional selling approach, that is, commission-crazed peddlers go out and use heavy-handed manipulative methods to sell, has positioned most sellers as fungible vendors. The key is to reposition ourselves as respected experts for our target markets. And to do that we have to change the way we acquire clients. Then buyers can change the way they buy. When buyers realise that "no" is an acceptable answer for sellers, and sellers don't try to manipulate buyers to buy, then the whole dynamic changes for the better. Buyers and sellers can work together based on mutual trust, respect and peer-to-peer candour, as opposed to suspicion, scepticism and cynicism. Buyers get better value for their money, and sellers get higher fees and prices for their solutions. 2009-04-01T16:16:25Z

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how-to-have-sellers-and-buyers-collaborate-to-maximise-project-value

2009-04-06T18:00:00Z

2009-04-06T17:34:59Z

In most service businesses there’s a serious disconnect between client acquisition and project management. This disconnect forces sellers’ commissioned salespeople (or as buyers regard them, dreaded peddlers), as fungible vendors, to undersell their solutions to price-obsessed purchasing departments.

How To Have Sellers And Buyers Collaborate To Maximise Project Value

2009-04-06T17:34:59Z