The code for unlocking great results: This is a ‘self- taught’ success story for turning contract requests into profitable commercial agreements and long term relationships. My mind works better with simplistic processes and I have a philosophy in life; “if I understand the complexities of a solution so will my potential customers” “Why make life difficult when success can follow simple guidelines”.
Adam’s four key guidelines for winning and managing Commercial Contracts:
No.1 - Keep your foot on the accelerator with Suppliers
Whether your focus is installation, service or small projects, always negotiate with your suppliers and remember to take first before you give i.e. State your conditions before you make your offer with “If you ………..then we’ll”. This will keep your supplier listening to what he/she needs to do in order for you to concede and move towards a mutually beneficial agreement. It will also encourage you to keep momentum in a Negotiation until you have exhausted all movement from your supplier whilst maintaining the relationship. Take care: if your company authorises you to award a 20% discount rate across the board to win “branded/prestigious” accounts. This is great for new business and PR but the drawback is it can cause us to take our foot off the accelerator too early and therefore leave further movement on the table. Remember: there is probably more movement to have and just like you, your suppliers will be able to use a large contract/commitment as leverage for winning new business in their marketing strategy. It is always a great buzz winning large commercial clients but always keep in mind that they will move from contractor to contractor if a better price is offered on a similar service basis. What is different in your ‘total value solution’ rather than the price alone? It’s also worth remembering that however great it is to have “branded” contracts it’s even better when these agreements are also making profit for your organisation.
No.2 – Preparation – Prevention is better than cure!
Golden Rule in Preparation - Always insist that each site is audited and any equipment identified as faulty or in need of upgrading is recorded and quoted for i.e. Faulty equipment and old equipment should never be included in the new agreements. Even if the client decides not to go ahead with your quoted works today, this information will be key in the future for both parties. In my experience, the larger contracts always strive to tie you into comprehensive three - five year ‘all inclusive’ contracts. During the first year this may be financially viable. Costs can spiral during the second and third year if your preparation was either inaccurate or inconclusive and these lengthy contracts are likely to eat up any profit made at the start. Prevention is better than cure; ensure your preparation work is carried out in detail with the necessary audit trails. At the beginning you always have an opportunity to charge for items that may fail during the contract due to the client demands that old equipment that is still in good working order is utilised. Items that are highlighted as requiring an upgrade may fail later in the contract and if you prepare fully at the enquiry stage it will definitely pay off in the future.
No.3 – Cost Savings motivate clients
A key focus for keeping cost down is to utilise existing equipment that has become dormant. Larger organisations quite often ‘chop and change’ their sites and at some point or another, as a contractor, you will be required to remove equipment from their stores or general sites that are either closing or reducing in size. My instruction to my team is to always keep equipment which is in a good working condition, test it later, and if it still meets industry requirements we can be creative in the solution we present back to the client with instant cost savings which will motivate them to want to do business with your organisation.
Persuading some clients to use redundant equipment may be a challenge. Always ensure you have done your homework and gathered any logic to enable you to present a compelling argument which highlights the overall cost saving to the project.
Communicate the positives to the client and ensure they understand that the equipment still meets all Health and Safety standards. Use the logic of the original capital investment vs the cost saving of today if the item is re-used.
Make sure each camera, DVR, sensor or panel is tested. There is nothing more embarrassing and unprofessional than installing replacement equipment to find out that it is not working correctly. Rectifying such errors will also eat away at the profit % and therefore impact your bottom line.
If the above is done correctly it will not just save the client money but once a stock level is obtained it will also keep your cost down on a contract which is “fully comprehensive”.
No.4 – Be ‘Opportunistic’: Spot a need and find a solution
The first lesson I learnt whilst managing commercial contracts was that you do not have to be the ‘salesperson’ to sell. In my experience sales guys have the pressure of bringing in the contracts, claiming commission then moving on to their next sale. It’s our job as Operation Managers to make the contract profitable for the business during the duration of the agreement.
Someone once taught me that selling is all about spotting a need and finding a solution which specifically benefits your client. This has been a major focus in winning a contract that was bought in as a “branded” contract and turning it into a long term relationship which is very profitable. I have used this strategy frequently and it proves to be consistent as a winning solution. Every time you hold a meeting or have a conference call, look and listen for that need which requires a solution, then tailor the solution to benefit that specific client.
Remember; if there is a way of offering the client options which will save them a lot of time, money and effort there is a guaranteed sale. All you have to do is persuade the client that they have a need in the first place. You can only persuade someone you cannot tell them to choose your solution. 5 steps to persuading the other party:
- Create a persuasion methodology – Use belief & passion, facts & figures, and Bargain with If you…..then I’ll
- Offer cost savings throughout the duration of the agreement
- Demonstrate genuine belief in your solution and pride in your organisation. Have a strong presence in the meeting. Professional body language and a good tone of voice.
- Product knowledge and accuracy with facts and figures to build compelling arguments
- Have a clear objectives; how much you want to give away in terms of discounts to stay profitable.
I am a strong believer in my four key rules. Each of the following are applied to every contract request that crosses my desk.
- Keep your foot on the accelerator
- Preparation – Prevention is better than cure
- Cost Savings motivate clients
- Be ‘Opportunistic’ – Spot a need and find a solution