Sales ... A case study

Note: The discussions below are a true case study of a private company. Hence the name of the company, its clients and competitors are kept confidential for ethical purposes. Regret the inconvenience caused.

It was May 2008 and the top management of the entire organization was involved in a proposal to one of its most prospective clients. It was one of the highest revenue generating projects in the recent past for the organization. The company, XYZ Pvt. Ltd, is a niche telecom service provider in the market space of Europe. XYZ has been in a good relationship with its client organization CLT since more than half a decade providing constant innovative solutions to CLT and thus collaboratively helping them to growth in the highly competitive market. Due to the ever increasing demand of its customers, CLT decided to capture a place in the cloud to enable its systems to provide a cheap solution to its ever increasing client base. Hence CLT decided to change all the systems involved in providing the service so that the technical disability is avoided across the entire set of services.

XYZ was the most preferred vendor of CLT due to its constant innovative solutions provided. Hence they were asked to draft a proposal for this initiative. Over the period of more than seven years, many competitors had developed in the European market. Hence, along with XYZ, CLT also asked Comp A, Comp B and Comp C to bid for the proposal. Since the other three organizations were involved in supporting the other systems of CLT, this move of CLT did not surprise XYZ.

After a month’s long hard work, the final proposal was ready and a few top executives of XYZ headed to Europe for selling the services offered by XYZ. The major parameters considered for measurement of the proposal by CLT were as below:
• Quality of service provided (QOS)
• Cost incurred by CLT (ROI)
• Overall service package offered

For the ease of maintenance, CLT had divided the systems into eight logical domains ranging from customer registration to billing.

Among the above four expected parameters, XYZ had an edge in the quality of the service provided since it had a very good track record over a period of seven years and also due to the fact that XYZ was the most preferred vendor of CLT. The other vendors were also very reputed for their deliverables in the industry. But the fact that XYZ was in a long running relationship with CLT gave it a clear cut advantage.

Considering the second parameter under consideration, the variation in the bidding amount proposed by all the four vendors is depicted by the graph below:

From the above graph it can be incurred that the amount proposed by XYZ was comparatively the highest. It was around 50 million € greater than the lowest bidder. This is when CLT started to bend towards the other clients and the interest of CLT towards XYZ started reducing. Hence the chances of XYZ winning the bid were really less after the cost related statistics was portrayed.

Now XYZ had only one opportunity left to showcase that they are different from the other vendors in the room. They had to do a proper service mix to make sure that the contract is not lost. Instead of concentrating on what went wrong, the top management at XYZ decided to take advantage of the fact that they were the most preferred vendors of CLT. They concentrated on the quality of service they provide. Instead of just offering the solutions to the existing problem at CLT, XYZ also offered value additions to the systems at CLT. This meant that, along with the normal expected services, XYZ offered a free value addition to the domain under operation. They also went a step ahead to align themselves with the customer to identify their existing problems and providing a permanent solution for the same (thus removing the recurrence of the issue). This was a perfect mix of services which XYZ offered and CLT (who trusted the quality of deliverables of XYZ) had no other choice but to choose XYZ for the contract. At the end of the meeting, XYZ had won 50% stake of the entire bid and the remaining 50% was split among the other three vendors.

It was a win-win situation created by XYZ which led to it bagging 50% of the stake. Due to the non-reduction in the cost factor, XYZ was even more thrilled to provide a better QOS. CLT was happy that XYZ was closely working towards their business goals and were ready to improve their customer experience free of cost in the form of value addition to the domains under consideration.

A few points derived out of the above case study are as below:
• Cost or ROI is not the only factor on which businesses work in this highly competitive environment. You should always have a competitive edge so that you can make a difference.
• Proper pricing strategy has to be considered while selling. In the above case even if XYZ had lowered down the price by 50 million €, they might not have won 100% of the bid. Purely because of the fact that the perception of client to spread the domains was not because of the cost factor. It was because he had to increase the pressure of QOS due to cut throat competition.
• At times, a perfect product/service mix appeals to the clients. It might create a win-win situation.
• A sales force has to be flexible enough to cater to the customer demands. If the customer requires technical solutions or projections, the sales force should deploy technical people. If high level decisions have to be taken, the proper DMU (Decision Making Unit) has to be deployed.
• Customer perceptions play a very important role.