You Don’t Have to be a Big Company to Win Big
The Secrets to Selling High Value IT Solutions to Large Organisations
There’s a big fear in a lot of small (and medium sized) companies that selling IT and technology solutions to large organisations will only end in tears - despite the obvious potential values of these contracts.
The reasons for this are typically threefold:
- "Big organisations will only buy from big supplier companies."
- "Bigger competitors will outsell us and leverage their relationships."
- "Selling to big companies is just too hard and expensive."
In this article we will look at each of these in turn and explore the counter arguments for each, before concluding on how small (and medium sized) companies can succeed and really create sustainable (mutual) value for big clients.
Fear 1: Big organisations will only buy from big supplier companies
The fear that big organisations will only want to buy IT solutions from other large (supplier) organisations stems from a perception that large buying organisations need the confidence that their supplier can offer things that they think will only come with large suppliers. For example:
- A pool of expert resources that can be called upon to make sure the project is a success and if something goes wrong, can immediately fix the problems at any location.
- Leading edge support, research and development that ensures the solutions will be fit for purpose and future-proofed.
- Financial stability and reputation that implies that the solution will be sustainable.
- Economies of scale that promise best unit pricing due to their own buying power for components.
The counter argument to fear number 1:
If small companies can be really clear and confident with a niche proposition, all of the above objections can be avoided and/or overcome. Specialist small companies are much faster to respond, have expertise that is much more accessible than that of big suppliers, are more likely to be personally committed and can result in a lower total cost of ownership to the large buying organisation.
Smart large buying organisations are learning to manage multiple small suppliers in temporary partnerships to deliver success from specific critical projects. The positive combined attributes of multiple or even single small niche suppliers can be very compelling to a capable programme manager (and business sponsor) in the large buying organisation. It can make it easier for him or her to deliver what is expected on time, on budget and to the end-users’ satisfaction.
Fear 2: The bigger competition will outsell us and leverage their relationships
This is a big fear on behalf of a lot of small and medium sized companies, typically based on the expectations that the bigger suppliers already have: existing relationships; strength of brand; a track-record and reputation; greater levels of sales resources with higher levels of skill; greater price flexibility; and a broader or deeper proposition that can offer the buying organisation greater perceived value.
The counter argument to fear number 2
The counter argument is that smaller companies can often outwit and outcompete larger companies in the sales process because they:
- Are faster to respond with commercial offers, have a can-do mentality and are more flexible to changes in requirements.
- Have a flat organisational structure and can make big commercial decisions at the front line.
- Are less complacent and less tied up with existing day-to-day business issues that occur between the two companies.
- Don’t have a bad track record, bad reputation or bad personal relationships that some larger supplier companies may have unfortunately managed to develop (particularly if they handled a problem badly and didn’t seem to take full responsibility for that problem and offer a quick solution).
- Can gain trust by promising not to the offer the unique solution to a direct competitor of the large buying organisations (which larger supplier companies will not be prepared to do), thus making the value the smaller company can offer a differentiator for the buying organisation.
Fear 3: Selling to big companies is just too hard and expensive
The third fear is something that is all to common. Small (and medium sized) businesses often consider selling to big companies as too hard because:
- It is slow and costly because of the bureaucratic and often complex political buying processes (including preferred supplier status achievement and the associated ‘due diligence’ and hurdles that go with this).
- Poorly specified requirements mean that a completed sale will be too costly to deliver which in turn could ruin the small company’s reputation and even make it go into liquidation.
The counter argument to fear number 3
However, the counter-argument to fear number 3 is that:
- Smaller supplier companies have smaller and often more flexible overheads so can offer a project that delivers faster returns at a lower cost of sale (which can offer the smaller company more profit).
- Value of project much greater, particularly as a return ratio or percentage compared to the cost of sale.
- If your solution offers a compelling and unique proposition that addresses a critical and urgent requirement, the big buying organisation (public and private sector) can make a decision fast.
- Big buying companies may help smaller companies that demonstrate unique value by putting more resources on the project, so the cost of sale and delivery can often be smaller when selling to large organisations as opposed to small organisations.
Conclusion and the Secrets of Success
Being small has as many advantages as disadvantages when you are selling a unique and compelling proposition to a large company that has a big and urgent problem that your proposition will address.
The key secrets for success are:
- Do your research in terms of: a) The compelling events, pressures and trends that are affecting or likely to affect the large target organisation(s) and how your solution enables it/them to respond; b) The tangible proposition and the tangible value your solution can offer in the context of the above; and c) Who the decision makers and key influencers are in terms of buying the value you are offering.
- Punch above your weight. Be bold, fast and flexible in your selling and use your size and focus to differentiate your offer and to outsmart your larger competitors.
- Get a powerful champion in the form of the decision maker(s) and/or key influencer(s) who will work in partnership with the decision makers and key influencers on a value-creation roadmap from near-term early wins to medium and longer term big value outcomes.
- Qualify, learn, adapt, respond and make decisions fast. If your value proposition is not compelling or unique, change it and fast. Your aim is to win big and win quickly to maximise your return on your selling investment. That’s what your size actually allows you to do in this game. However, if you can’t make your offer unique or get a senior champion, you are going to lose and you should decide to withdraw and cut your losses. By the way a loss in a big organisation is not always the end. You can regroup, revisit your research and move on to the next opportunity (which probably lies in another division in the same buying organisation).