Selling: My challenge - Do I really want to be the contract holder?

Things are going well. You are growing both in revenue and in size, although its increasingly more difficult to secure contracts directly with the end-users, instead you are frequently having to be a sub-contractor. This is not only reducing your direct face-time with the end-users but its also a lot more complicated to bid in a dual-system to the end-user and the integrator. So the big question is raised. “Why not take the lead?”. Why not indeed. This is the topic of this article.

Naturally there are multiple questions that come to your mind. Can I deliver a bigger workscope?, do we have the capacity and contract power to manage sub-contractors?. These are valid questions but here we will focus only the commercial considerations.

If you are asking this question, you have hopefully crossed Charles Moore’s chasm and are attacking the new and more competitive mainstream market of pragmatic buyers, and here lies your first trap. Even if you are now in the big boy’s playground is it really in your interest to go head to head with them?. Above all are you ready to play by their rules, or more importantly are you able to win by their rules. Looked this way, you will almost certainly not be able to compete.

So what are the alternatives that will enable you to get more face time, and be in a stronger negotiating position with the integrators? Use your size to your advantage!

Ive seen this work when smaller suppliers use their speed and better internal communications to their advantage. Let’s focus on 2 aspects.

1.       You have to get in early, and compress your sales cycle so as that it has finished before the integrators get moving

2.       You need to expand your workscope.

Many companies invest most of their sales effort towards the end of the buying cycle. A bit like a diesel car on a cold morning. As a sub-contractor this is the time that you have unlimited access to the end-user. It also means that you need to move your offerings and value proposition through to the decision-makers sometime even before the customer has finalized their procurement strategy. Your aim is to make sure the ultimate customer does not want to risk not having access to your offerings by picking the wrong integrator. You are in control of this process. Start too late and you lose this control.

So why should you seek to expand your workscope. Surely it would be easier to limited this commando action to your core offerings? This is naturally true, but if you want to impose a sustainable cut of the mainstream market you want to make it as big as you can. If you provide individual products, how could you convert them into sub-assemblies, collaborating with non-competing partners. The larger the workscope you have cut-out for yourself the stronger your negotiating position with the integrators. As you grow, you can increase this combined offering.

Tempting as it may be to become the contract-holder, It is often better to compete in the mainstream market through stealth, leveraging the bigger competitors weaknesses and your strengths until you have established yourselves and are in a position to play by other people’s rules.