Selling to government, public sector undertakings, nationalised banks, funding organisations etc. is a binary outcome game akin to flipping a coin. Heads you win – tails you lose. Hence it can be fun or frustration for sales professionals. Government business can be as laid back as a fifty overs cricket match or it can have the excitement of one run to win in the last ball of a T20 match. Many of my memorable wins in my sales career spanning over 2 decades have been in the public sector and I am pleased to share some thoughts which could be useful to the sales fraternity.
Public Sector And Corporate Business – Similarities And Differences
I have seen separate sets of stalwart sellers in Enterprise business and Government business in Sales organisations. However not all sellers could manage or excel in both. While the fundamentals of selling like account management, opportunity life cycle, etc. are the same, the major differences arise in the procurement processes and decision-making criteria of public services. Stringent rules laid down to ensure transparency in public procurement and protect every dollar contributed by the taxpayer makes the pursuit long drawn and a tiring exercise for the sellers. Sales professionals catering to the enterprise segment need the capability to run a sprint race, whereas sellers managing public services need the stamina and perseverance to win a marathon.
Demand Creation Vs Capture
Contrary to popular perception or misconception, Government business calls for greater “demand generation” capability as against “demand capture” to win the deals. In over 50% of the Tender/Request for Proposal (RFP) cases the decision on the prospective seller is made and the fate of the deal is sealed much before the invitation to tender is released. Reactive sellers download the RFP and visit the buyer’s office seeking information/clarification on the need. Whereas proactive sellers would have educated the client about the product/service/solution months before the release of the RFP. This early mover advantage is good but may not be sufficient to win the order. What is perceived to be a unique solution at the time of demand creation may turn out to be an “also ran” if deal control is not exercised at every stage of the tendering process.
Demand capture also works in some scenarios. Here the buying organisation releases an advertisement for Expression of Interest (EOI) or Request for Information (RFI) when they are not sure of what to seek or expect from the solution. Here again Proactive sellers quickly plunge into action, map the account completely, and gain the prospective customer’s confidence. This will help them gain some advantage vis-à-vis the competition though not to the extent of demand creation.
“Specking” The Secret Arsenal
The proactive seller does the homework well ahead of the game and influences the Techno-Commercial terms of the RFP to be favourable/winnable. This strategic exercise is calling “Specking” in sales terminology. Specking is an art and a science. It needs to be done with a deep understanding of the competition, scenarios in bidding and existing procurement rules. It is quite easy to draft a one-sided RFP, but eventually the bid could be cancelled because of objections from competition or no response from other bidders. Pre-Qualification (PQ) criteria should be such that there are enough bids for the process to go through but in the end the seller wins.
Specking is easy in a Quality cum Cost Based Selection (QCBS) RFP where marks are awarded for technical and financial proposals. The seller could suggest the “Criteria” and “Weightage” for evaluation based on his/her organisation’s strengths/capabilities. However, it is important to have the competition insight as to how much they would score against the set parameters to avoid any surprises. If selling is the systematic elimination of risks, specking is the secret arsenal to winning.
Challenges In Stakeholder Management
Value propositions like revenue enhancement, cost reduction, productivity, agility, and so on, which capture the attention of corporate CXOs needs to be repackaged to sell to the public sector. For example, when making a presentation on the benefits of ERP, value propositions like manpower optimisation or elimination of paperwork would ring alarm bells in a public enterprise. This makes change management an enormous task.
The pitch to the Mayor of an urban local body should not only be how citizens would benefit from the proposed solution but also how the roll out would translate into votes in the next election for their party. Answering the “What is in it for me?” question using only the solution is a bit difficult in this space. Assured tenure of employment, standard remuneration without parity issues, associated benefits, etc. make the bureaucrats risk averse and not so open to change.
Frequent change/transfer of officials is a nightmare for sellers in the public sector. Months of hard work mapping a stake holder could wither away in a moment with the movement of the official. Collective nature of decision making in public sector by forming a committee calls for greater consensus building skills on the part of seller. Mapping the decision makers and the technical, economic, user buying influences is a continuous process as compared to the corporate sector. While in the corporate sector the ultimate decision maker’s writ will run unchallenged – in public sector a single dissenting note by a not so senior member of the committee could derail the deal. Fear of allegations like corruption and nepotism force the buyers to be extremely cautious. As a result, the seller has limited influence over the buyers.
Bid – No Bid Decision
Sensible sales professionals take a prudent call on the organisations and pursuits they must focus on resulting in maximum RoTI- Return on Time Invested. They do not hesitate to pull out of the bids specked by them if they sense the winnability has diminished over the course of time. Organisations with a well-defined criterion for bid evaluation and gating mechanism help their sellers to stay focused on the efforts. In short, to be successful in the public sector, it is not only about which horse to bet on, but also which one not to.
The Bid Documents
In tendering what you say in sold but what you write is gold. Years of hard work creating an opportunity is of no use if the proposal/bid document does not meet the requirements stated in the RFP. While it is important to know what to write in the proposal it is even more important to know what not to write in an RFP response. Every word and sentence should be written with care to avoid legal issues. While the buyers smartly keep the RFP vague to protect their skin at a later date, the seller cannot afford to submit such a response. A simple error in submission can cost the organisation dearly resulting in substantial drain of resources during delivery. Multiple reviews of the bid document along with adequate mistake-proofing is adopted by organisations with a mature bid management process.
Winning The L1 Game
Most organisations select the least cost bidder(L1) post technical evaluation. This is the most challenging aspect for sellers. While they need to win the deal by quoting a competitive price – they should plan carefully so as not to leave too much money on the table. This could result in degradation of product/service delivered.
I remember a joke about a fiercely contested large opportunity between two bidders and it had reached the Court of Law after technical evaluation. The bidders were locked in a prolonged battle and the judgement was pronounced in favour of Firm A. The seller of Firm B who was weeping outside the court hall, suddenly laughed at Seller A. Puzzled A asked B what made him feel happy at this moment of loss. B replied “The price we quoted for this tender was not lucrative whereas you quoted a dirty number. I pity you for the trouble you and your firm are going to face for the next few years with this demanding client. All the best.” and walked away. So, the loser in a public sector opportunity is not decided at the time of a bid award but later when the seller delivers and collects the receivables.
Ethical Selling To Public Sector
“What is grey is black” is the basic rule for selling to the public sector. Every action of the seller needs to be above board and should be able to face public scrutiny. Great organisations believe in the purity of means and ends. In my career I had faced tough questions pertaining to selling when we used to analyse the “bid wins and losses” every quarter. I was fortunate to work with organisations and managers who never adopted shortcuts. I remember doing a subtle “sales satyagraha” by sitting outside the accounts departments of a client who delayed clearing the invoice as he was expecting some favour, in spite of the excellent service delivery by my organisation. Three days of persistently sitting in the client’s office corridor made the Head of Department ask me what I was waiting for and then ordering his subordinates to clear the payment at once. Sellers need to select the organisations they work for the way they choose the accounts they want to focus and serve.
Selling to the public sector is difficult but the dividend it pays is multifold. Sellers need to cultivate specific aspects like networking, political acumen, attention to details, diplomatic conversation, humility and patience to serve this segment. I believe that this article would help Sales Managers and Executives to exercise better deal qualification and control in the public sector.
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