Selling in the Deep End of the Contract Service Pool

Selling in the Deep End of the Contract Service PoolThis is the place you want to be – in the deep end.

Where contract dollars are huge.

Where the really attractive customers hang out.

Where yearly goals are cleared in one sale.

Of course it’s safer in the shallow end, and more profitable percentage-wise. But it’s not as exciting, nor as rewarding ultimately.

In the deep end it’s harder to succeed because:

  • Customers are more demanding
  • Sales cycle is more complex
  • Competitors are more ruthless

Customers are more demanding

Customers in the deep end know they look good, and they use it. They’ll squeeze suppliers for many, if not all of the following:

  • Get suppliers’ best price
  • Remove higher profit from non-routine work by including it in the base contract pricing
  • Require full disclosure pricing
  • Place supplier profit at risk in performance-based contracts
  • Require suppliers to sign indemnification terms favorable to the customer
  • Name customers as co-insured with higher than normal insurance coverage
  • Take extended payment terms
  • Expect comprehensive measurement & reporting
  • Demand high levels of customer service

Sales cycle is more complex

Procurement is always in the deep end due to SOX compliance.

Sales cycle is more difficult in deep-end of the contract service pool

Almost every contract service bid is a Request for Proposal (RFP) process. This puts even more pressure on sellers because:

  • Multiple decision-makers involved – with multiple agendas
  • Sellers can’t get to all decision-makers before the RFP is out
  • RFP questions are often schizophrenic and dysfunctional – not worded to deliver the insight decision-makers are looking for
  • Procurement runs short turnarounds from RFP release to due date, with site tours and Q&A in between
  • More “no decisions” as Procurement runs hollow RFPs
  • Long delays in making final contract award as Procurement negotiates with top 2 supplier finalists

Competitors are more ruthless

All those good looking customers at the deep end certainly draw a crowd.

Competitors are more ruthless in large contract salesSellers will see all their big-league competitors there, which makes winning large contracts harder because:

  • Big-league competitors are always hungry – they need to continually grow their top line
  • Hyper-aggressive pricing removes almost all profit from base contract – suppliers hope to recapture profit in non-contract work
  • Big competitors have lots of resources to throw into RFP responses – technical proposal writers, Subject Matter Experts (SMEs) & consultants
  • Big competitors invest lots of sales time & resources into customers long before RFPs come out – uncovering buyer confidential info that helps win bids
  • Big competitors have multiple reasons for competing to win in the deep end, see what big companies get

Do You Sell in the Deep End?

Does this sound like your reality? If not, what have I left off, besides sun tan lotion and a towel?

Post up your comments here. And if you sell in the shallow end, I’d love to hear why you prefer to be there.

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