Can’t Save Your Way to Success

Service Contractor SuccessThe expression, “can’t save your way to success”, can help service contractors better understand how they fit into their customers’ world.

I first heard this saying yesterday from a senior manager of corporate support services at a Fortune 100 company. She uses in-house employees and outsourced services to deliver support.

“Can’t save your way to success” says bluntly no matter how good or cost effective support is, if the revenue generating parts of a company fail, the company goes down the drain.

Note: I’m including all cost of goods sold in the revenue generating part. And for support services, I’m thinking facility services, i.e. janitorial, physical security, O&M (operations & maintenance), etc.

It made me think how contractors must deal with the reality that their customers are only expenses within their own companies.

Then it’s no surprise that support services impact a company’s profitability but not it’s viability. Logically companies look to provide support as cost-effectively (lowest cost) as possible.

Voila! Procurement has it’s marching orders. Highest value at the lowest cost, but mainly the latter. Why? Because purchase savings are easier to show than value. And service value can be hard to determine.

How can this help service contractors avoid procurement’s low-price hunting?

In two ways:

#1 Discovering how business success is defined
#2 Telling a compelling value story

#1 Discovering how business success is defined

Contractors must fully understand what success means to that particular company. Asking procurement or the business owner “What does success for you look like?” is key.

And success is never defined in monetary terms alone. There are other criteria, such as legal and regulatory compliance (just ask the former Enron CFO about that one).

Procurement is going to drill all contractors on cost savings and low pricing anyway. But what other areas help/hinder the company in increasing revenue and profits, compliance, or public image?

Contractors must understand this specifically per customer. Before making their pitch for partnership.

Otherwise they’ll sound like a used car salesperson spouting meaningless hyperbole at customers.

#2 Telling a compelling value story

This is non-fiction, not fairy tales. Contractors must articulate how they can meaningfully help a customer’s business succeed.

With a specific understanding of success, it comes down to the contractor’s ability to tell a compelling story.

Doing so is the difference between persuasively winning and doing an informational data dump.

How do your customers define success?

~~~~~~

Chris Arlen
President, Service Performance

Technorati: contract services, facility services, procurement

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