Three Ways to Unseat the Incumbent
A major prospect on your target list sent you an RFP (request for proposal) this morning. It is a sterling opportunity; one you’ve been tracking for years.
Your enthusiasm is tempered somewhat. After all, this is an impersonal RFP.
You’re not the only one on the list; a strong incumbent seems glued in place.
Your wheels begin to spin, and many questions pop into your head:
Which other firms received the RFP?
Do we know anyone at the company?
What triggered this RFP?
What is the full scope of the project and is there a budget?
What is the prospect’s real issue to be solved?
Before we try to answer these questions, let’s break down the inherent barriers that face us before we commit resources to an RFP response.
Throughout my career, I faced an incumbent in 90 percent of sales situations. Even so, I and my team found competitor accounts quite attractive.
First, you know the prospects buy your type of products and services, meaning they’re likely qualified. Second, prospects often look for better solutions, and my sales reps knew we offered the best. And third, like us, our competitors were vulnerable.
The Relationship Owner
Every major prospect can point to an incumbent in place, someone who already “owns” the relationship, with built-in credibility and access to key decision makers in the company.
But all too often, incumbents lose their peripheral vision. They tend to relax, grow over-confident and lose touch with changing priorities, failing to evolve with new strategies and solutions for their clients.
And you want to step into that breach. However, when you lack relationships, data, leverage and proven results, the process becomes extremely challenging, especially when confronted by stronger, wiser, more resource-rich competitors.
More than likely, the RFP defines itself in operational terms. Specifications are well spelled out. Installation dates already projected, and the decision process made clear.
Let’s look at an example.
The Acme Corp., a hotel chain with 14 locations, seeks janitorial and cleaning services to improve the quality of its properties and to reduce the cost of these services. Let’s assume Acme’s management group made a case for improving these services to solve the business owner’s key operational and business issues.
Both the project and budget are approved. The next step relies on the expertise of an in-house committee to sort out options, analyze vendor offers, and make the decision.
Unfortunately, the incumbent tops the committee’s list. He’s in the driver’s seat.
No problem, you’re offering a better solution and, given the right information, it can be proven to outperform the incumbent’s solution. In your estimation, you are a perfect fit. What’s more, you can also help reduce the cost of the incumbent’s services.
As we know from experience, it’s not that simple.
You stand on the outside looking in and time is not on your side. You also face a huge challenge to gain access, build relationships and gather the traction needed to level the playing field with your competitor. You’re probably feeling the deck is stacked against you. What do you do?
Exploit Incumbent’s Vulnerability
No matter how good the competition’s product or service, problems always arise. If you’ve done your research, you will know the nature of those problems and when they become untenable.
However, I confess, I am amazed by the number of sales reps and advisors who do not take their competition seriously. Comfortable in the bubble? Perhaps.
I always keep detailed files on my competition, not only because I want to pinpoint vulnerabilities, but I also want to benchmark and learn from them.
With my ear to the ground, I hear perspectives on competitors all the time. Who’s giving good service, who’s not; who’s overcharging or who became complacent. I take note, learn what I can, gather proposals, reports, and product information so I can study every move.
In the process, I learn our competitors’ strengths and vulnerabilities, and then can confidently craft my own competitive advantage.
Break Apart the Inertia
At this point, it is important to emphasize that prospects don’t change easily. Inertia sets in. They think to themselves: “the devil we know is better than the devil we don’t.” Switching vendors can carry a heavy cost, particularly when it involves changes to systems, departments or many people.
Moreover, the prospect may not consider the problem as pressing relative to other business priorities. The incumbent may be working to correct the problem. In the end, politics and internal hierarchy can make everyone cautious about vendor change. They reason, “Why take the risk?”
To help the prospect break free from inertia, you must put forward an extremely compelling business case for change. To do that, find out why the RFP was issued in the first place. Ask the question, “Why are you doing this?”
Remember, prospects buy when they want to fix, accomplish or avoid something. Find out what is not working. They will first tell you what the need is, but you must then probe to find the need behind the need. Ask more questions:
If you do not go through this process, what’s the outcome?
Why not stay with the current provider?
How has your provider addressed the current situation?
What triggered the need to address this need now?
When do you wish resolution to this need?
Who are the stakeholders and how are they impacted?
Now you are ready to apply my three strategies to UNSEAT the incumbent.
Three Strategies to Unseat the Incumbent
Find out why your firm received the invitation to bid.
Take a small bite of the apple.
Emphasize you’re similar.
[Because of the importance of unseating the incumbent, I dedicate an entire chapter in my latest book MERGE 2.0 for release later this year.]
1. Why You?
By the time the prospect firm invites you in via an RFP, it is deep into its buying process. We know it’s true that many prospects start a selection process already knowing who is going to win or at least they know the product or service they want.
Unfortunately, these prospects create the false expectation of possibilities with the firms they invite to the RFP dance. Worse yet, they gather your valuable information to share with the incumbent or use your information against him.
You will never get, nor could you expect, them to admit to a rigged process exists from the outset. This situation may be the only time you need to start with a “why us” conversation.
Find out why you were selected to bid and what the prospect firm knows about your organization and capabilities. The answers to these two questions are critical to your decision whether to go forward.
2. Better a Small Bite
If you do all your homework and proactively approach the prospect by way of the RFP, what do you do when you learn (outright or indirectly) the prospect is satisfied, even happy, with the current provider?
Besides wondering why the RFP was let out in the first place, you have an option. Capture business from the incumbent by positioning yourself as a logical number two. Don’t go directly after the incumbent’s business. Instead, find what areas the prospect wants to fix, accomplish or avoid that the incumbent is not addressing. Take a small bite of the apple.
3. Similarity Works
A third sound strategy to try: Emphasize how you are similar, not different from the competition, even though this goes somewhat against traditional selling. Then, offer one game-changing benefit. Lower cost. Extended product life. Superior reliability. Do so only if you can assure no pain or switching costs to the prospect.
And keep it simple. No piling on extras. Complexity increases your risk of losing out.
Move Into Action
Stop focusing internally and believing your solution is the perfect match. Telescope out to the prospect and see what he sees. Then identify a strategy that works for you, stick to it, and be flexible.
These high-value opportunities are tough to win. Once you’ve done all your homework, asked all the right questions, and created an intelligent meeting plan, respond to the RFP.
In fact, respond confidently to the RFP by firing up your team to gather additional information right up to the hour before the beauty contest. Smartly craft your answers into the prospect template, adding your high-profile references, and right-sizing your pricing.
There’s room for you at the table. You just have to take your seat.
See you on the upside,
For more information, go to www.pleinairestrategies.com
Or call William L. MacDonald in San Diego at PleinAire Strategies LLC at 760.340.4277 or 213.598.4700