Selling lollipops

The information visualisation I liked the most from a recent course I took was the lollipop diagram.  (Infographics and Data Visualisation, run online by the University of Texas.)

I created the 'lollipops' above to try and summarise and reinforce a point on a recent training course I gave for a European blue chip company (a course on growing its services business). Lollipops are a great way to show data in an informative and visually appealing way.

The point in question was how intimately you have to know the whole customer environment in order to sell them a service. The rich discussion with course participants was that the steps in selling should be the same. But the extent to which you have to master the elements above (you can probably add others yourself) is far higher when a customer trusts you enough to buy a service from you.

More about pursuing bids ... Spiders!

The 2 x 2 matrix (previous post) is a good tool for measuring your competitive position for a bid. With only 2 factors to work, yo have to be a bit ruthless in determining the key factors.  But there may be times when you want a richer picture of your competitive position to be able to judge whether the bid is right for you.

A very useful tool here is the Spider Chart (a.k.a. radar chart), which has been very instructive in some of my recent work.  The example in the chart below applies to a fictitious IT services provider.  (It has 8 axes, but you can tailor as required.)  The idea is that you choose the scaling consistently, so that 'good' makes the web as large as possible on all the axes.  (For consistency across different prospects it's a good move to create a table of the scaling criteria for the axes.)

In this example let us imagine you are a large corporation which provides enterprise solutions to other large corporations or public bodies.  You are likely to provide most aspects of an IT service in-house, deal with the most demanding network, security and service needs.  Your reputation is an important reassurance for your blue-chip customers.  What you don't do in-house, you are well used to buying and controlling through your supply chain management functions.

If the target client is currently doing its thing in-house, it is unlikely to have kept abreast with latest tools and methodologies, and also be running a pot-pourri of legacy systems.  In such a case scope for bringing savings may be considerable.  You have technological/capability mastery of the whole business domain/space, so are a one-stop shop.  This increases customer trust in your credibility.

The 'Ansoff Position' needs a bit of explanation:  ECES means Existing Customer Existing Solution, NCNS means New Customer New Solution, etc.  The idea is that if you can sell an off-the-shelf (existing) solution to an existing customer, you have a strong incumbency relationship already and your and the customers processes are well aligned.  It's a pain for them to switch!  If you're at the opposite end of the spectrum (NCNS) they don't know you and are having to buy something new which they aren't familiar with.  It's a much more level playing field against the competition.

So how did the technique work in practice???  In one real example where the "web" was small we competed against a number of low-cost competitors in a fairly 'commoditised' market space.  We had to work hard to differentiate ourselves and communicate our benefits to the client.  Much in line with what the tool 'predicts'! In another case, where the web was larger, we played to our strengths and there were fewer competitors.  Compared to the previous case, the competition were quite similar companies to ourselves.  We could use the tool to either 'think how to ghost' the competition (counter what they say about their relative strengths) or emphasise the strength of our approach.

Should you pursue this bid?

Pursuing a bid makes sense if you have a strong competitive position.  For a straight-forward equipment product his might be reasonably easy: Do you have the right features? Are you at a good price point? Does the product look good? Do you have the right marketing channels?

But how can you judge this when there are many complex factors?  For Business-to-Business or Business-to-Government the 'complex factor's are very often many and varied.  They could include your reputation, track record, willingness to take risk or make a or long-term commitment, your ability to manage large programmes, and so on.

Although it's often difficult because of the very narrow choice of factors, in this case two, a classic 2 x 2 matrix of factors can give fundamental insight into underlying factors that will reveal your relative competitive position.  For example, the 2 most important factors for a large IT project for government or a large corporation could be Complexity and Size.  Can you credibly, in this example, master the all of the technical complexities, or do you have some niche skills?  If the project is very large, do you have the resources, additional manpower (when things go wrong) and credibility to deliver the implementation?

This doesn't mean you can't compete when (in this example) things aren't complex and large!  Smaller companies may well have a lower cost base and generic skills to pursue simple, small projects more competitively than a large brand name.  Large companies may choose not to compete here.  The 2 x 2 matrix will help your positioning, whatever your size.