Pitching to Players in The Big Leagues

Build a winning strategy for winning business from larger companies.

By Mary D. Lewis, COP

The famous movie quote “If you build it, they will come,” made for a great story line, but as a strategy for expanding your business, it’s a far cry from reality.

If your growth strategy includes selling to large corporate customers, you need to understand how these big league Fortune 500 players operate and—more importantly—what you can to do to improve the chances of turning your sales pitch into a home run.

Understanding the Four P’s

The larger a company gets, the more it typically relies on structure—or, in this case, the Four P’s (Policy, People, Process, Practices)—for managing its sourcing and purchasing activities. Thorough research in advance of the initial sales call is a must, but if what you need to know is not online, make sure you ask probing questions when you do meet with your potential customer.

Policy // Find out what company policies govern supplier selection. Expect guidelines to include:

• Length of time a supplier has been in business, which helps demonstrate your company’s stability.
• Number of W-2 employees. This provides clues as to how operations are performed, ability to scale and “legitimacy” of your certification.
• Insurance and bonding. This standard may differ depending on type and volume of business—and trigger red flags if you express problems getting bonded.
• Restrictions on share of revenue. The customer cannot account for more than X percent of your overall revenue. That way, if an order is reduced or cancelled, it does not have a material effect on your business.
• Ability to receive orders and pay electronically. Paper-based purchase orders and invoices are less efficient and cost more for large companies to process.

If a large company is interested in your firm—but you might not meet all the criteria—you might be asked to consider subcontracting with one of their more established suppliers on a specific project. 

People // Getting your foot in the door sometimes requires knowing which door to knock on. Ask who the sourcing and purchasing decision-makers are—and how decisions are made.

The supplier diversity coordinator might be a good starting point, but you need to ask who puts contracts in place. Individual business units might control certain categories such as legal services, while the procurement department controls others. If a product or service is used across the enterprise, you need to ask, “Do individual business units make their decisions separately or do they go through Procurement?”

Many large companies have outsourced certain operations. Find out if the outsourced company uses its own contracts (in which case, you should be selling to them) or if they act as an agent under your target customer’s contract. You’ll need to understand who makes the transactional purchase decision, particularly if that agent has other supplier contracts from which to choose.

Process // Large companies increasingly rely on eSourcing, web-based systems that manage a range of processes including supplier sourcing, onboarding and profiling, RFPs, contracting and electronic price negotiations (reverse auctions). If a company has an online supplier registration system, use it! Make sure your company, certification, and contact information is accurate and kept up to date. Otherwise, you could inadvertently omit yourself from sourcing events.

When responding to an RFP or RFQ, follow the instructions!  If you’re in doubt or need help, contact the company’s eSourcing administrator before you’re facing a submission deadline.

Practices // Ensure you understand the types of contracts a company uses and when it uses them, as one size does not fit all. For example, if your firm sells products, services, and software, you might have two or three separate contracts.

When a contract is in place, find out who decides when to purchase under it. (Contracts might stipulate the prices, terms, and conditions, but purchase orders may be used for the actual purchase transactions).

In some cases, large companies have dollar thresholds for contracts and POs, below which purchasing cards (P-Cards) are used. Make sure you know that threshold, as it becomes a good opportunity to approach your customer to establish a formal contract if aggregate P-Card  transactions reach that limit.  Your customer will benefit, too, because tier-1 supplier diversity dollars may not be recognized on P-Card transactions.  

Avoid Striking Out

Large customers can be a boon to your business, but be aware of some of the pitfalls that might cause you to strike out:

• Have a ready line of credit. If your order for 10 widgets grows to 100 and then 1,000—for the same delivery timeframe—and you can’t service your customer, then they’ll turn to someone else who can
• Be realistic about your abilities. Large companies expect suppliers to understand their limits on volumes as well as pricing and delivery. If the deal isn’t good for your company, don’t be afraid to walk away. Look for opportunities to start smaller, then build up
• If you respond, “We have no competitors,” that answer is a red flag, unless your firm is the sole owner of a patent or is exclusively licensed to provide a service. Supply professionals may ask about competitors to understand where your firm is in the industry or to gain more knowledge about a category
• Understand what differentiates your firm. Focus on tangible, objective elements such as coverage, types of services, hours of operation, exclusive relationships and price
• Honor confidentiality agreements and use of IP-protected material. Unless you have a license to use a company’s brand, logo or other protected material, don’t use it—even for sales presentations

This article was first published in Thinking Bigger magazine on November 1, 2013

The views expressed in this article are strictly those of the author and not Sprint’s. Sprint makes no representation of any kind concerning the content herein.

Author’s Bio: Mary D. Lewis, COP is a procurement professional formerly with Sprint Corporation. She speaks nationally on sourcing, negotiating, contracting, disputes, and supply chain sustainability topics and is a contributor to various publications.