To have a big four bank or any of the top 10 Australian listed companies as your customer would be considered a big feather in the cap of many a business, large or small.
While procurement teams are busy balancing their internal clients’ needs against their employers’ budgets, it might seem like a mammoth task to win business from large and listed companies and government organisations. It might seem especially so for SMEs who often believe that such organisations will only go with larger businesses or well-known names.
Large organisations, such as banks, start their buying processes online. Westpac, for example, starts 93% of its buying processes with an online search. So clearly banks are not always looking for larger businesses or well-known names. It’s also clear that having a strong online presence is important in more than one way.
And with their large procurement budgets, often a few billion dollars across over 100 categories, there are plenty of opportunities for SMEs.
So the fact is that large corporates do partner with much smaller entities. But just how do you go about becoming one of the chosen few?
How do you get the procurement team to notice you?
Understand the process
Procurement, sourcing or buying: whatever you want to call it, doing business with large corporates usually means negotiating your way through their procurement process. And that means dealing with a procurement team or manager who doesn’t necessarily know you, your business, your product or service. In fact, they probably know very little about you at all, even if you’re already one of their suppliers.
Generally speaking, and while thresholds differ from business to business, if you’re pitching to provide a service worth more than A$200k annually, you’ll need to go through a tender or proposal process. A Request for Tender (RFT) or Request for Proposal (RFP) will be run by the organisation’s procurement team.
For projects less than A$200k, a Request for Quotation may be sought from a mix of existing providers and recommended or referred potential new providers.
This is a good reason why a strong online presence is vital. And if you have relationships with people inside the organisation, ask them to refer you to procurement.
Think about it from procurement’s point of view
If it isn’t enough to make your heart sink, it’s also vital you start thinking about the procurement process from their point of view. Put the procurement team’s hat on and ask yourself: What exactly are they looking for?
There are plenty of examples of SMEs who have won business from under the noses of larger or longer established competitors. They’ve won because they’ve invested time and effort into finding out what the customer’s specific needs are and then outlining very clearly how their business offering will exactly match those needs.
The next thing is to do your research so you’re clear about what’s important to them as a business.
You need to be clear about where the organisation currently stands and understand at least some of the challenges they face, as well as the broader environment in which they operate.
In a nutshell, your submission must convince them that you understand the challenges they’re facing and how you can help them move through those challenges.
The place to start is their website. Here, you’ll find media releases, annual reports, shareholder reviews (if they are a listed company), plus details of their board members and other senior staff. You’ll get a good overview of recent changes, challenges and their strategic plan.
If you can afford it, IBIS reports are also useful as these give a view of the company and where they sit within their industry.
LinkedIn can also be useful to research individuals and their job titles. Use any referrals from within the organisation to nominate your business to procurement.
Overall, however, your goal is to identify the challenges that the organisation is experiencing, and is likely to in the future, both short and long term.
Isn’t this research all going a bit far?
Not at all. While knowing this level of information may not seem immediately relevant to you, the more you know, the better prepared you will be. And the better able you will be to tailor your quote, pitch, proposal or tender to the organisation’s needs and wants.
When it comes to winning, every piece of information is valuable.
For example, typical issues facing large corporates and government include:
- Aging population – changing financial needs, health care needs, aged care needs
- Digitisation – new rules of business, more content and transactions going online, impact on retail, easy access to information to compare choices and purchase decisions
- Disruption – smaller players stealing their thunder in new ways; waning market share
- Economic changes – 2-speed economy
- Asian growth – economic growth and / or decline in Asia, and military power in some countries
- Customer wants and needs – move from utility services to customer experiences, personal contact, instant feedback
Having an accurate view of both immediate and longer term issues means you can not only accurately pitch for a current opportunity, but position your company as a potential long term business partner.
Mostly, what large corporates and government are looking for is the total value offered by your pitch, proposal or tender.
Fundamentally, that means value for money. Not just the actual cost, but the added value around your offering.
Think about it this way:
- It means the effectiveness and efficiency you bring.
- It means how you will help to move their business forward, even in a small way.
- It means ease of working with you.
- It means how you will help them in their relationships with their customers or stakeholders.
- It means your niche knowledge.
- It means your innovation, creativity and resourcefulness.
- It can mean risk sharing and revenue trialing.
- It can mean greater process efficiencies.
- It can mean a better experience for their customers.
- It can mean a better user experience.
- It can mean making it easier for them or their customers to do business.
What if the organisation has more than one brand?
Understandably, companies are seeking efficiencies. If your product or service applies across their business, then tell them so. If you are pitching to just one brand, you can point out that your service or product may have application across their whole business, or parts of it.
If one size doesn’t fit all, that’s fine too.
And what if you’re invited to tender? I’ll cover this in Part 2.
This article was written by Proof Communications Director and Founder, Rosemary Gillespie.