Are Buyers and Sellers Really on the Same Page?

You know the song 'you say tomato, I say tomatoe - let's call the whole thing off!'.  Well buyers sometimes feel that way when dealing with salespeople.

For example, when it comes to looking at orders and how they are won, there is a fundamental duality between vendors and buyers.  Here is why:

Vendors are concerned with: •        Proposals •        Negotiation •        Closing Getting the deal is the objective!

Buyers are concerned with: •        Costs •        Benefits •        Risks / constraints The objective is to establish the business case and correspondingly to make the right decision.

One consequence is that vendors enter negotiations that focus on costs, without considering the vital costs -benefits - risks equation that drives buyers.  Another is that sellers write proposals that don’t reflect the information that buyers must present in order to get the purchase approved.  Take for example the structure of the typical vendor proposal, compared to the structure of the buyer's business case, or purchase approvals document.

Vendor Proposal •        Introduction •        Problem •        Solution •        Benefits & Features •        Cost •        Team, Company & Credentials

Buyer’s Business Case •        Introduction •        Strategic rationale •        Alternatives: –       Costs –       Benefits –       Risks & Constraints •        Recommendation •        Implementation

Why is this important?  Well, as we have discussed in many articles, managers must now present a business case for purchases of as little as 10,000 or 20,000 euro.

Let’s take this further and look at some of the headings and terms buyers are likely use in writing a business case – taking the guidelines for seeking central funding for UK road projects:

Current situation	Future situation	Scope
Problems	Objectives	Targets
Exclusions	Risks	Tolerances
Assumptions	Actors / stakeholders	Assessment of alternatives
Sensitivity analyses	Consultation & participation	Option Testing
Benefit Cost Ratio (BCR)	Non-monetised impacts	Cost estimate robustness
Project Plan	Constraints	Deliverables

The question is how widely used are terms, such as; risks, benefit-cost ratio, stakeholders, assessment of alternatives, etc.  in sales proposals?  Well, the reality is not very common.    The leads to the question - how valuable is the content of the sales person’s proposal in helping the buyer in getting projects approved and building the business case?    Again the answer is not as helpful as they could be.  For those salespeople who recognize the importance of this issue, there is a real opportunity to improve win rates and success.

The Rise and Rise of the Business Case - A Review of Best Practice

Many large organizations require a business case for purchases of as little as €20,000. Unless the seller's proposal focuses on costs, benefits and risks it is going to miss the mark.

The Rise of the Business Case.

As one salesperson told us recently; ‘I have seen more business cases in the past year than I have in the previous 19 years’.

With budgets being squeezed, projects and purchases must increasingly compete for scarce organizational resources. The reality is the business case is now more important than the sales proposal.

The Salesperson as Business Case Facilitator.

The emergence of the business case as the prime factor in organizational spend decisions obviously presents advantages for those sellers who can demonstrate the business justification for their solution.

If a vendor wants to win the sale, they must at least input to the preparation of a credible and compelling business case. Traditional features and benefits message are no longer adequate.

What your solution does and how it does it, including the technology involved, is the stuff of traditional sales presentations, but not a business cases.

The reality is that many buying decisions are made when the salesperson is not in the room, by a sceptical audience that the sales person may not have met, based on information which the salesperson has had little, if any input to. Traditional feature led sales pitches are out of touch and won't cut it in the boardroom.

The Compelling Business Case.

Whether your sales goes ahead will depend on a ‘to the point’ value equation, that reflects not only costs, benefits and risk, but also how the project will contribute to the achievement of broader organizational goals and strategies. That is the new reality of the business case sale.

A compelling business case is not just important in getting the sale, it is also essential to ensuring successful implementation and developing long term client relationship. As one buyer said to us, "the business case is also playing a role in guiding, tracking and managing project success, it may no have done in the past but it is now".

A Review of Business Case Best Practice.

In order to guide you in your new role as business case facilitator to your prospect we have reviewed the work of 9 of the leading experts in this space (the list is at the end.)

Specifically, this article presents an overview of the key advice from specialist books written for buyers on how to develop a business case and sell their projects internally.

The Business Case and Success.

The business case is not just a means of optimizing the allocation of scare organisational resources among competing projects. It is also an important means of ensuring project, as well as organisational success.

Let us take IT projects as an example. Everybody knows that most IT projects run into problems - the Standish Group and other figures are familiar to us all. However, the cause of those problems is often misdiagnosed.


Indeed, most of the experts suggest that the number one reason for the failure of IT projects is a poor business case, or no business case at all. That is not just failures in terms of delivering on time and within budget, but more fundamentally for IT to impact on business success.

Cost overruns are often not the result of overspending, but of underestimation of costs at the planning and budgeting stage. Indeed, the problems with most projects can be traced back to their inception and planning. The business case has an important role to play in making sure projects get started, but also stay on track.

Business Case Quality Issues.

Some of the experts suggest that expenses claims were subjected to more scrutiny than business cases for the purchase of multi-million pound IT systems!

All too often the business case was seen as bureaucratic, as opposed to a strategic exercise. As a result, many business cases were prepared to justify a desired choice of action, as opposed to presenting management with the information required to evaluate, select, manage and track projects in terms of their impact on the organizational success. Times have changed whether it is an external purchase, or an in-house solution, the development of a robust business case is now essential. As sales people we need to ensure we keep our focus on the how (the features, the technology, the solution) and the why (the business case).

12 Tell tale Signs of Poor Business Cases

Based on our experiences and the experiences of nine leading experts in the field, here are 12 telltale signs of poor business cases:

1. Lack of skills, discipline, or more importantly objectivity

2. Absence of cross functional involvement

3. Failure to engage with stakeholders and their needs, creating buy-in in the process

4. Failure to adequately define scope and requirements

5. Failure to present a menu of alternatives and options, in the context of business drivers and constraints

6. Lack of feasibility study type information and scientific validation, or data
7. Failure to address how the project fits with the organization’s strategy and past decisions.

8. Failure to conduct an accurate, robust, and credible cost – benefit analysis, underscored by clear and realistic assumptions

9. An overly simplistic analysis of project related risk, or implementation issues (governance, control.)

10. An overly simple view: The business case is prepared and presented; but it has limited value throughout the project lifecycle

11. Lacks structure and process for completion / agreement

12. Weak investment analysis

Business Case - Document, or Process?

Underpinning many of these problems is the fact that the business case is often seen as a document, rather than a process. This is particularly the case in the absence of corporate standards with regard to:

· How a business case should be completed

· What it should contain

· Who should be involved

· How it will be evaluated

· What templates are to be followed

The single most important factor in terms of business case preparation is the process involved, in that any business case is only as good as the process by which it is prepared. Also the process of business case preparation is iterative, evolving to reflect changing needs and requirements.

The Full Life cycle Business Case.

All too often a business case document is hastily prepared and then once the project is given the green light it is put aside. A business case should be a living document, that:

· Guides implementation

· Tracks progress

· Manages change requirements and helps the seller and buyer

· Enables management to assess if projects are delivering as expected and if corrective action is required

Business Case - Attractiveness and Achieveability.

A business case is concerned with 2 dimensions of a project – attractiveness and achievability. So it is not enough to include just a cost and benefits justification.

The business case must also address how achievable it is, including for example a register of risk, as well as details of implementation, governance and control.

When it comes to the economic analysis, it is important to realize that people often have a genuine difficulty with numbers and in particular in working with spreadsheets. That is not withstanding the challenge that may be presented in terms of the monetization of benefits, particularly in the case of less tangible ones.

All of the above is a lot to take in, as sales people we need to develop our business case development skills.

Don’t forget to ‘CEO Proof’ your sales proposition

Every body knows that buying decisions are increasingly being made at higher levels. And it is not just a matter of senior executives rubber stamping decisions made by their lower level managers. In times of increased risk and uncertainty, senior managers are steering all significant purchase decisions.

But is selling to a CEO, or a CTO, different to selling to a mid-level manager? It sure is. Just as the view from the top floor of the company's offices is different to that at ground level, the agenda of the C level executive is different to that of more junior management.

1. They are focused on the strategic impact of any purchase on the performance of the organization. In particular they tend to take a broader strategic view, focusing more clearly on issues of business performance, key business benefits and, of course; the business case.

2. They are likely to be less interested in the detail – the features and functions, for example, but more concerned with business impact, levels of risk, return on investment, supplier credibility, etc.

3. They may even use a different language – the language of strategy, business drivers, key performance indicators, return on investment, total cost of ownership, etc. They quickly bin traditional brochureware looking instead for quantifiable

All these distinctions add further impetus to the move from selling products, technologies and features to selling solutions, their benefits and their business impact. We refer to it as 'CEO Proofing' the sales message, proposition, or proposal.

The air gets thinner the higher you climb in an organization, so too does the span of attention of the executives, the drive for results and, of course, the difficulty of climbing (by that I mean accessibility, including getting past the PA to talk to the executive in the first place).

To get attention at C Level you need to be able to quickly communicate in a compelling way how your solution can help achieve higher levels of performance in some key area of concern. You are going to need to back up that statement by citing other companies you have helped, telling stories of success and quantifying the benefits.

Why Proposals Make Poor Sales People

Your proposal can’t and won’t sell for you, unless of course you have done all the ground work first. We write them assuming that they will sell for us, or more specifically that they will be read, and if read will be understood, appreciated, or even believed. 

Two decades ago, I enjoyed great success by directly and speedily replying to requests for proposals, often without meeting the customer in advance of submission.  How times have changed! 

As a general rule the earlier a proposal is submitted the lower the likelihood it will succeed.  Also the more proposals are generated, the lower the likely overall rate of success.   

So, how to ensure that when you do write a propoal it has the maximium chances of success?  Well, here are some of the ways the sales people we know are increasing their hit rates:

1. Avoiding pre-mature diagnosis through more systematic needs analysis
2. Avoid unilateral identification of needs and solutions
3. That requires a bi-lateral approach, with lots of interaction, listening, probing, coaching, etc.
4. Clear criteria regarding when Proposals will be prepared – a new approach to proposal preparation:
5. Involve the customer in writing the proposal, or write the proposal with the customer at your side
6. Avoid surprises – the role of the proposal is to confirm what has been already discussed, or agreed
7. Trial balloon price and other aspects of the proposal and ensure feedback before submission
8. Arrange a formal presentation of the proposal post submission
9. Improving the quality and presentation of proposals, strengthening in particular the references and the investment and return sections

Bid Losses Offer Clue to Sales Effectiveness Opportunities

The loss of a number of recent bids had heightened competitiveness concerns among the sales team of a leading IT services company.  This was compounded by fears regarding a general economic slowdown.

However it is precisely in depressed markets and among down-spirited sales teams that a focus on sales effectiveness can produce the greatest results.  In particular two key opportunities to increase sales effectiveness were identified:

1.   1.  The sales team was over reliant on proposals to sell.   Most proposals were prepared after an initial short meeting with the customer, or following a phone call or email enquiry.   As a result proposal success rates were low, with limited information gathering / needs analysis, or prequalification before submission and no gauging reaction to price.

2.      2. Hampered by an insufficient flow of sales leads – reps were responsible for generating all their own leads, as a result less than 10% of their time was spend meeting new customers, with just one new customer being met each week by each rep.

In respect of proposals new criteria regarding when they are to be prepared and a policy of greater interaction with buyers before submission reduced the number of proposal generated, but dramatically increased win rates.  

Added to a telemarketing campaign to generate leads and increase the number of prospects being met, the result was a 22% increase in sales growth.  

Winning Advice - Do Fewer Presentations and Proposals!

Ironically, fewer presentations and proposals generally results in more sales!

Traditionally the view was that the more customers you presented to - the more sales were likely to result. However sales presentations where the salesperson does all the talking (with or without the aide of a set of powerpoint slides) are not an effective way to sell. Great sales people will give a presentation if they have too, but prefer conversations instead. In this way they can clearly establish requirements and more successfully match solutions to needs.

Traditionally managers saw a direct relationship between the number of proposals prepared and sales revenues. However, that has changed. In fact, many managers complain that their organizations are writing too many proposals, or that win rates are slipping. Great sales people write proposals, but only as the culmination of an extensive two way process of understanding the buyers needs, exploring solutions and trial ballooning price/other key aspects of the proposition.

Too many proposals are prepared unilaterally and at an early stage in the sales cycles. But that means they generally involve the salesperson 'going out on a limb' to propose something without the confidence that it will be well received and without a thorough understanding of the customers' requirements.

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Ray Collis
Director - The ASG Group, Ireland.