When profit margins are shaky thin, you can blame it on assumptions. When we lose business we deserved to have, again, blame it on assumptions. Assumptions are dangerous but they are avoidable. Instead, take less for granted and swiftly shift the spotlight on your proposals from cost to unquestionable value. By taking the road less traveled you’ll win more business and make more money doing it. Add persuasiveness to your proposals and up your batting average!
We have an almost infinite capacity for taking things for granted. Our customers are no different. Perhaps it’s just human nature. But how, when business is so dicey and margins so razor thin, can we afford to assume that we understand the problems we are paid to solve without getting the facts first? Assumptions lack the facts Jack. They represent the easy, mindless course of action and fail us more often than not.
Winning new business is overrated if what you win is a loss leader. Your customers bring forth these opportunities pre-pressurized with their rightful need to control costs. When it seems like price is their only concern, you consider your options:
- Decline to bid and instead, focus your resources on more “worthy” business in the future or,
- You accept their request; submit a proposal with “competitive pricing,” and risk shrinking your profit margin to zilch—that is, if you win the job.
The only thing surprising here is how few consider a third alternative.
Paint the hash marks boldly
From your customer’s point of view, if both suppliers have the same equipment and use the same finishes, you are at parity (on the scoreboard). In other words, you and your competitor rank equally at that moment in their mind—at least on those measures. This of course, places more emphasis on price. But if that valuation is an assumption on their part, and it isn’t true, you could potentially give up an important point advantage. You have to go after that point and make sure you change the perception. By keeping the scoreboard fair, you bring more focus to the differences that matter.
Cutting through assumptions should be a critical exercise of every proposal here forward. Just as you calculate expenses to estimate profit, you must also track and defend every discussion point. Likewise, when customers mistakenly presume that a feature in your proposal is different, and favors your competitor’s offering, you must absolutely go after that potentially game changing assumption and make sure you replace it with fact.
The two point advantage
Competition too often brings out the sameness in us. Too bad when you consider we often lose business by a single digit on a points scale. In competitive situations, reactionary proposals are the norm. They’ve become a laundry list of all possible benefits the customer will receive—the proposals all look alike and nothing stands out. More advanced proposals focus on points of difference that assume customers will deem favorable, relative to the alternatives. But knowing that an element in your proposal is a point of difference does not, however, convey value. It’s just a difference.
Your best play is to do the homework—perhaps even the research—to uncover what really matters to your customer. When you can cut through the assumptions and arrive at a deeper understanding of your customer’s business and its priorities you have a chance to uncover the most meaningful value to your customers.
INSIGHT:
Customers define value, so they certainly don’t want to hear your assertions for the value of your products’ features and benefits. They want profits, or better ways to make profits. They want help getting a job done. They want confidence, satisfaction, comfort and self-esteem. They seek suppliers with superior customer value propositions (the subject of this post) that fully grasp their challenges and promise to ease their most pressing concerns—whether those concerns are well articulated or not.
I welcome your comments or more discussion.