GPB’s latest IP session on Business development

GPB’s IP session on Business Development

Date: 18th September 2015                  Attendees: Ewan Pearson, Richard Keith

Agenda:

To review all recent thinking on BD and Pitching IP.

  1. To create a new set of IP docs (Word, PPt, pdf) that we can deploy in improving our clients’ abilities to win pitches of all kinds.
  2. To have a structured sequential approach to the development of sales/BD, and pitch content in chapters or steps.
  3. To create practicals for each chapter or step above
  4. To be able to offer each chapter/step to clients with practicals in easy compartments/steps so that our work is tailored to their needs
  5. To trial this new IP before the end of 2015.

Context:

GPB’s philosophy has always been to seek out best practice from all other sources – academic research, other providers with high credited approaches, and extract from this the best parts to consider when advising our own clients. To this we add our own IP, continuously developed over time as a result of our client work. There are many examples of highly accredited sources to whom we have looked; these include:

  • Solutions/Consultative/SPIN selling e.g. Neil Rackham, Mack Hanan (see his YouTube clip)
  • Categorisation of buyers by type e.g. Miller Hyman
  • Push-Pull methodologies e.g. used by Xerox, Walmart, Airbus,
  • Unconventional sales approaches, such as the challenger sales approach e.g. CEB
  • Personal Behavioural Styles e.g. Merrill & Reid
  • Influencing and motivation styles e.g. Hale & Whitlam
  • Authors such as Kahneman, Gladwell, McCormack, Carnegie, Mehrabian, Izdebski, Zei et al.

IP ideas

  • A free flowing discussion covered: BD pipeline and diagrams.
  • Our clients’ approach to sales cf. our PRM and CRM (Prospect/Client Relationship Management)One clients’ ideas on buying influences and modes cf. ours and Buyer Criteria Analysis (BCA)
  • We drafted a set of new diagrams and text to illustrate PRM and CRM, the overall pipeline’s sequence of events, and the BCA stage.

The BD and Pitching Pipelines

  • Developing a clear sequence akin to our key steps to prepare/build a presentation, so that we can offer our BD advice in segments to clients as needed.
  • Miller Hyman BD methodology – how to describe ours, check it’s better and different
  • Pitching pipeline and diagrams

An overall PRM and CRM diagram; The GPB “Bow Tie”

We used to show the PRM and CRM (Prospect and Client Relationship Management) process as a diamond, it had the effort rising then falling either side of the Point of Sale. We’ve updated that; the diagram now captures the filtering down of prospect lists as qualifying and targeting reduces the numbers in the pipeline. Conveniently it looks like a bow tie.

It also captures our Buyers Criteria Analysis (BCA*). BCA starts early in the Selection Phase, an expanded middle phase between PRM and CRM where numbers of prospects do not change much, and effort is focussed on moving the prospect through the pipeline. In the CRM phase, the optimum effort and investment levels are shown, rising as the number of clients in this phase rises over time, and your client passes through the Growth and Defend stages.

It also shows the win rate % at the point of sale (a high % in this example), with wins in blue and ‘No sales’ in orange. It now also shows who is taking the decisions – initially the seller determines who to target and qualify, but post this filtering, the client is in charge of who they hire, more than the seller.

Diagram 1 – the GPB “Bow Tie”

Oct 2015 BD Bow Tie

 

 

 

 

 

 

 

 

 

 

 

 

A Pipeline key stages diagram – The GPB “Plumbing” diagram

We have created this from scratch as a visual. It expands on the selection phase, and shows how the sales process can involve a pitch meeting or sales meeting.

There are a great number of similarities between the two alternatives, but the diagram also explains why we treat pitching as a whole separate area of IP, as there are also some key differences.

We propose at least 2 rounds of Buyer Criteria Analysis (BCA) as we believe it is useful to repeat this exercise and not rely on one reading, with the second reading taken after the client’s decision to have a pitch or not.

Then it shows the timing of key stages when the strategy, team and content build occurs and then rehearsals for both sales meetings and pitch meetings.

We define an individual’s “Point of Sale” (iPoS) as that moment when an individual who has a say or vote in the buying decision makes their own personal decision. This is usually done privately in a reflective moment, or whilst someone makes a key point, or whilst speaking on the subject. It may be at the pitch, or after the pitch and more rarely before the pitch. The most common of the three alternatives is after the pitch has occurred. The Blue arrow shows how the iPoS can occur at very different times; this will be a different moment for each person and each pitch. At the end of the process there is the corporate “Close the Sale”, at which a vote or discussion leads to a winner being chosen.

Diagram 2 – the BP pipeline plumbing

Oct 2015 BD Plumbing

 

 

 

 

 

 

 

 

 

 

 

 

 

Buy side roles

The number of roles in buying entities varies a great deal, in this article we share some of the more typical ones we have found. The power of these roles varies, and is not normally the same for the ‘Yes’ and ‘No’ sides of a decision. An individual can have one or several roles.

These roles are allocated for each specific transaction, so can and will change from pitch to pitch. Bidders should not assume a role continues between (and even within) transactions without checking. Individuals in each role can have a wide variety and blend of motivations.

Buyers:

Payer – a Key Buyer, with strong Yes and No votes. These people control the budget but won’t have direct involvement in using the product or service

User – also a Key Buyer, with strong Yes and No votes. These people will use the service or product, so want to examine how it will work.

Partner – Key Influencers; have medium to strong votes, with largely equal Yes and No votes. They will usually be working alongside the winning bidder on the transaction.

Procurer – aka Admin/Logistics – also Key Influencers; strong ‘No’ vote, weaker ‘Yes’ vote. Usually process-driven, they can have elimination criteria that are exercised usually before the short-listing or decision moment, but unhelpfully can also alter decisions, after they are made by their seniors, by using elimination criteria (e.g. conflict of interest or reputational liability).

Other key client roles:

Insider – can be any of the Buyers, wants to help your firm win, and so optimal is a role as a Key Buyer. Best scenario is if they have high levels of internal access to valuable intelligence, and will supply this to you and coach you.

Outsider – not officially a Buyer per se but pulls the strings (influences strongly) behind the scenes. May be as senior as the Buyers (or more senior).

Antagoniser – can be any of the Buyers, the opposite of the Insider; there to help one or more of your competitors win, and will supply to valuable intelligence to them. Does not want you to win; often against you because of some prior work or relationship damage.

Overseer – usually someone more senior than the Key Buyer/s, there to see fair play. Can (but should not) have a strong Outsider influencer role, even a decisive one.

Buyers’ Options

Buyers may have at least the following options from which to choose:

(i) Choose one of the bidding/pitching firms – either an incumbent or “excumbent” (i.e. a new supplier, and a new word from GPB!)

(ii) D.I.Y. – doing the work themselves.

(iii) Do nothing – cancel the whole project and continue as before (unlikely where large investment of money, time and hassle has taken place, or where legal/regulatory requirements exist).

(iv) Do something as a standard (and possibly pre-existing) alternative with the budget/funding/money.

(v) Do something creative instead or as well – including those ideas provided by one or more bidder.

Buyers’ Motivations

Individuals can be motivated by many things, which can be single or multiple, simple or complex, rational or irrational, pro or anti you. They generally fall into the categories of Logical/efficiency, Ethical/duty or Emotional/passion motivators.

GPB’s Buyers Criteria and Analysis (BCA)

BCA assumes that the buyers have at least a preference for (but probably not decided about) selection of one of the competing firms. There are many angles for this:

  1. The segmentation of criteria into rational and emotional, internal and external
  2. The typical criteria used by buyers
  3. Ranking criteria by importance and the ‘Decision Level’
  4. Performing the actual Buyers Criteria Analysis (BCA), including behaviour styles analysis.

The GPB Buyers Criteria Analysis (BCA) Pyramid

This pyramid is a new visual for us. It aims to capture a number of complex ideas which are best shown visually.

Types of Buyer Criteria

These are many, diverse and specific to the transaction and the buyers for that transaction. We define “Buyer’s Criteria” as the set of factors that a buyer uses to make a decision. It is helpful to try to categorise the criteria and to offer some general examples of these factors, to assist our clients to understand their enormous diversity. We can cut Buyers’ Criteria in three ways: Logos – Corporate, Rational, Objective and Quantifiable criteria (shown in blue).Ethos – Ethical, Trustworthiness, and assessments of Competence and Credibility (shown in green).Pathos – Personal, Subjective and Emotive criteria (shown in orange).The relative dominance of these three factors varies greatly from person to person and also from pitch to pitch.

We can also see now where GPB’s Hot [H] and Cold [C] Buttons from our FBI diagram fit in here, as these cause positive or negative scores on the various criteria. They can include the “Pain of Gain hill” (see below), and a whole host of positive, negative or composite reactions to a sales or pitch point too numerous to list here.

See the pyramid diagram below for examples of these criteria and where they usually fit, but please note that this is a simplification of a highly complex subject! The pyramid shape shows how there is a ranking of significance for all criteria from a few key criteria that can be considered essential, through the decision level ones, down to many almost insignificant criteria.

All Buyers start at the top with the Essential Criteria. Their evaluations using this set of criteria nearly always net off to produce a draw. This moves the Decision Level down the pyramid. The Decision Level criteria (shown as the horizontal orange bars) are often where there are small but ultimately significant differences between sellers/pitchers; they are therefore the most critical criteria of all. They are used to select the winner of the business. They are the criteria that GPB has long referred to as “Factor 40”, as all the [39] factors above have all netted off against each other. It is now known that decisions are usually first made for emotional reasons, and post-justified with rational and/or ethical explanations. This diagram illustrates this well (1st and 2nd orange bars). If that is so, you will usually never find out what the real reason for the decision is, unless you have a really good “S.I.D.”, a Senior Independent Director, who is external to the sale or pitch, but performs the client review process.

The pyramid also differentiates between Internal (private, within oneself) and External (shared, open) criteria; the weighting of these again can vary relative to each other. Internal criteria are processed inside someone’s head; they are important but private, and there will be few clues (e.g. from questions they ask you) about what those criteria are. The Internal criteria are usually dominant.

Diagram 3 – BCA 1 

Oct 2015 BCA-2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Here are some typical examples of the many criteria used. They are shown in the text boxes below, divided into Logos (rational), Ethos (ethical) and Pathos (emotional) categories:

Diagram 4 – BCA 2

Oct 2015 BCA-3

 

 

 

 

 

 

 

 

 

 

 

 

Understanding the decision-making sequence for the three types of criteria

In the many pitches that we have worked on over a quarter of a century, we have seen a consistent theme: All pitch teams focus on getting the messaging to be as persuasive as possible. This makes sense. Then they do a bit of rehearsing (if time), and head out the door.

But little consideration is given to whether this will match the buyer’s criteria, or team dynamics, or the handling of likely tough questions, or whether they have really answered the question “Why you?” We come along it that question is one of the first we ask. Our clients’ answer is usually a silent and in-depth study of their shoes.

It is important to understand the sequence in which these factors usually operate on a decision maker. If you consider how a buyer gets from “I have a choice” to “I have decided”, the effort generally is to make the decision as easy and defensible as possible, using the following sequence:

  1. Great Content, i.e. logical, verifiable and credible (trustworthy) argument backed up by solid evidence. But every pitch decision is about the future, and therefore no-one knows what will actually happen. So no matter how much logic is applied, there is always a “Logic Gap”, filled with the uncertainty of “what will it actually be like if we hire them?
  2. References. Part of that ‘Logic Gap’ can be filled by knowing that a good job was done elsewhere (references), and the rest is down to a combination of:
  3. Likeability i.e. the Pathos argument of “I will enjoy working with these people” and
  4. Trust i.e. the Ethos argument using a Leap of Faith, trusting in the person, firm and the argument, along the lines: “I can’t know for sure, but I trust/like them and so think we’ll be OK”.

Most ethical and logical business people will use rational argument as far as possible in reaching their decision (their individual Point of Sale. iPoS). However, it is clear that at some point this type of thinking runs its course before reaching their iPoS. It has to, as all such decisions are about the future, and no-one can know that. This difficulty is often glossed over, and claims are made that rational argument has done the job. Not true! There is always an element of Emotion (Pathos) and Trust (Ethos), a Leap of Faith, to get to the end of the decision-making process. As many of the competing firms will be able to get to the same point in the initial Logical/rational stage, the remaining Ethos and Pathos stages turn out to be incredibly important. We show this process on the diagram below. For example, claims such as of uniqueness or difference must be credible, a hint that working together will be fun, all count towards the decision. Equally “I don’t like that person”, and “I don’t know why but I don’t trust them” also matter a great deal. We think we do know, and it has a lot to do with the way messages are delivered

We are sure from the research done that the way in which the pitch is delivered has a great bearing on the likelihood of success. This is shown with the yellow arrow.

Diagram 5 – Leap of Faith

Oct 2015 Leap of Faith

 

 

 

 

 

 

 

 

 

 

 

 

 

The “Pain of Gain Hill”

We use this concept to explain how clients migrate from an incumbent to either (i) an excumbent provider or (ii) a refreshed incumbent provider. The key aspects are to minimise the change hill and maximise the net gain on the other side of that hill.

Diagram 6 – Pain of Gain hill

Oct 2015 Pain of Gain Hill

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Doing the actual Buyers Criteria Analysis (BCA)

This is the work done to understand the actual criteria in a real transaction in order to maximise the likelihood of a win. The following is a summary of what is involved:

  • Understanding GPB’s Pre-Pitch Contact rapport building and information gathering concept and diagram
  • Undertaking several rounds of meetings, calls and other contact with the client to understand their criteria
  • Deploying GPB’s existing ‘Ladder of Contacts’ approach
  • Deploying GPB’s Behaviour Styles Analysis to help maximise rapport
  • The skilful use of probing questions, especially to uncover the buyers, influencers, roles and the actual criteria in type and order of importance
  • Active listening, note-taking, and debriefing skills.

A further version of our BCA pyramid illustrates the role of Behaviour Styles Analysis, as this analysis helps to identify the type of buyer: more, same or less assertive and more, same or less emotive than the average person. This is a foundation analysis towards the whole understanding of the buyer.

Diagram 7 – BCA Behaviour Styles

Oct 2015 BCA-4

 

 

 

 

 

 

 

 

 

 

 

 

 

GPB’s Value Equation

We have for some time now worked with the idea that:

V = Q/P, where V = Value for Money, Q = Quality of work done and P = Price.

The problem always is quantifying “V” and “Q”. Some good if limited amount of research has been done in this area, and our thoughts below include our responses to that work.

The Public sector approach:

In the Public sector in Europe, they are obliged by law to use an equivalent valuation method called “M.E.A.T.”, standing for “Most Economically Advantageous Tender”. To us this translates as “best value for money”, which can mean anything they like and therefore gives huge scope for variation (as was intended when this rule was brought in). It was introduced to increase the objectivity (and defence) of decisions, and has led to many buyers selecting on the basis of written tenders only. Where the item is a more complex purchase, there is an alternative and horrendous process called “Competitive Dialogue” (CD), with its slightly less horrid brother “CD Lite”. Only the largest and wealthiest firms bidding for the largest and most suitable contracts need engage with this as it is very costly and time-consuming without a commensurate expectation of winning.

This sector though does its best to quantify what MEAT means, often by specifying a breakdown of the points allocated to price and to value. We have seen price score up to 50% and as little as 10%. EU Procurers score the bidders using value / price to get one overall ranking number, and the highest score will always win. After a tender, the scores are either published or can be obtained by Freedom of Information (FOI) requests, and we have seen some staggering results, with scoring differences of less than 0.01% between the winner and the second placed bidder.

Price is pretty easy to score, with for example the lowest priced qualifying bidder given a score of 100, and other bidders given a simple mathematical % difference from that. So, if the lowest price is £80 and your price is £120, your price number is 150, and that becomes the denominator for their calculation. We have yet to see a scoring method or result on price that was not a straight line calculation.

For value, scoring differs and become very complex, often with a huge raft of (often hundreds of) elements to a tender that are scored; but again a total score for value is derived, and this becomes the numerator on the V/P calculation. This is a spurious but valiant attempt at scientific precision, as all it does it take a large number of small subjective numbers, and adds them up. But when it comes to defending a decision (which is usually the prime motivator for procurement staff), the illusory sense of objectivity means they can take a bidder to the detail and show where points were won and lost.

The private sector approach:

The private sector is increasingly picking up the process of the public sector. Partly this is as many procurement staff have moved from the public sector for the extra pay, and brought their objectively ‘superior’ process with them. However, selling and pitching continue to play a major role in private sector hiring processes. The private sector just seems ls robust on objective criteria, and more willing to accept the case that who you hire (the people) is important, and not just what you hire (the product or service).

 


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