Pitch Strategies: Incumbent vs. Newcomer
Should incumbents pitch differently? How should a company best pitch to retain existing business? What are the best strategies for dislodging an incumbent supplier? This article suggests a number of ways incumbents, and those attempting to replace them, should approach pitch presentations.
- Why is the contract out for renewal? Is your customer obliged to test the market every few years? Is there something about your service that isn’t working? Find out well before you pitch.
- Don’t be scared to point out the positive things you have done – but remember that your competitors will be selling an exciting vision of the future. The past is important, but your customer is selecting the supplier they want to work with from now on.
- One of the advantages you have as the incumbent is access to your customer and the end-users of your current service. Make sure you understand what users – and not just those running the procurement exercise – are looking for. Consider using video and written testimonials to show how well you understand the situation.
- Changing suppliers is inherently risky. As the incumbent, emphasise the experience you have, how well you understand your customer, and the difficulties a new supplier would face. You don’t want to seem as if you are holding your customer “over a barrel” – but nor should you let them forget the risk of disruption.
- Don’t be afraid to suggest new things. One of the problems an incumbent supplier can face when suggesting innovation and improvement is in answering the question “Why didn’t you do this before?” But remember that your customer set the service parameters that you deliver to, set their own budget, and of course decided – however many years ago – that your offering was the best available at the time. Things move on – so now you are offering more – but that doesn’t mean that you weren’t offering the right thing then. Contract renewal is a great time to suggest enhancements – don’t be scared to.
- Why has the business been put out to tender? If you are just being used to help with a price benchmarking exercise, consider not bidding. If there are serious issues with the incumbent’s service – uncover them.
- Sell a vision of the future. Describe how great things could be. Talk about the exciting things you could offer. As a newcomer, you can offer real – transformative – change. If the prospect is looking to change things – try to explain that only a new supplier can really deliver.
- What are the weaknesses in the current service provision? Is there any dissatisfaction you can exploit? If you aren’t comfortable directly attacking the incumbent then ‘ghost’ their performance by taking a list of all the areas in which your competitor is failing, and then talk positively about how you would deliver greatness in those areas.
- Because the risk of transition is always slightly nerve-racking for purchasers, do what you can to reassure. Present details of places you deliver the service successfully. If appropriate, show how you would handle contract mobilisation and ‘go-live’.
- Gain a foothold. Of course the ideal might be to replace your competitor entirely – but sometimes your prospect would see this as too risky. Play the long game and realise that starting a relationship now will give you an opportunity to impress, get to know the customer, and build a bigger opportunity for the next time the full contract is put out to the market.
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