presales consulting training highlights

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Patrick Prin - Highlights of the Presales consulting training master presentation 1

Introduction to presales consulting

Patrick PrinSeptember 2015

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Introduction to presalesconsulting activity

What is “presales”? Key presales principles The job of presales consultant Prepare a binding offer for a

customer Difficulties working in a presales

pursuit Conclusion and reminders

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What is presales? Some definitions

Wiki: Presales is a process or a set of activities normally carried out before a customer is acquired, though sometimes presales also extends into the period the product or service is delivered to the customer.

In reality, this can enclose some activities that are inbound to a CRM (Customer Relationship Management) Market analysis and future customer needs Marketing campaigns that can be institutional or

specific (advertisements, road shows, booklets, etc…) Client prospect visits and presentation of solutions or

products Customer need analysis and studies Proposal preparation Request for proposal responses Sales completion and contractualizing

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Key presalesprinciples: activities

To learn about the market and current trends To understand how your company is positioned on the

market in regards to the competition To know about key strengths and weaknesses of your

company To know well its products and solutions To capitalize on customer references To understand customer real needs How to build a proposal Define the correct price level To be convincing with the client and to answer their

questions about your offer or proposal To close the deal and to contractualize

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Key presales principles: financials

A customer opportunity must be profitable your company:o It is easy to sell at a losso Il is hard to sell with a good profit margin

The customer expects the price to be as low as possible and will play with competition to get the best offer

The stacking of costs, risks, and margin may quickly lead to a price that would be too high

Pressure from competition, information on customer budget may lead to a price that would be too low

Profitability will result from a balance between these two forces, but predominantly from the realism of estimated costs, and from their consistency with the resource plan being proposed

Any compromise will necessarily be sanctioned later by ground reality in delivery

It will be very difficult not to say impossible to come back on price components once the contract will have been signed

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The job of presalesconsultant: skills needed

The role of presales consultant requires some specific skills and competences: Tenacity:

He must remain motivated and focused from the start to the end of the sales cycle,Sometimes quite long

Availability:The presales work is cyclic: Few activity at the start (early phases) Intense activity to produce the offer and to close the deal

Ability to present:Must be capable of presenting in front of a customerResponding to possible questions from the clientWithout losing his means

Knowledge of company products and solutions:It is essential to understand and master all solutions that will be proposed to the customerA significant time investment is required to get prepared

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Prepare a binding offer for a client: how to get started

At first you need to qualify the opportunity to be sure that the pursuit is justified

If this is the case and if your management approves it, then these are in general the next steps:• Gather a team having the right competences• After an in depth reading of the request for proposal, you need to build a detailed

response plan• A person responsible for the offer must be appointed (bid manager) who should

spread the workload over the different members of the response team• He must coordinate all the work for building the response until it is sent to the client• The presales consultant is responsible for the consistency of the response and for

adequacy of its content• He can delegate some of the preparation but must validate the work that is being

delivered• A management validation step is needed before the response can be sent

In most companies, the elaboration process for a client offer is seriously documented and you will be referring to it

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Prepare a binding offer for a client: the different models Fix price or flat rate:

• It is the most complex to manage in presales• Higher risk taking• Need to have a precise idea about the target budget from the

customer Time and materials:

• Quite simple to manage in presales• Risk is low with such scenario• Less and less accepted by customers (risk of “délit de

marchandage” according to French regulations) Support and Maintenance engagement models

• Fixed price for standard operations• Time & materials model for non standard operations• Work units are more and more being used• Very strong pressure on prices and client request to reduce

their billing progressively

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Prepare a binding offer for a client: the price

Margin

TotalClientPrice

CostsEstimated

Costs

Riskenvelope

ActualCosts

Penalties

The calculation of the final client price must consider the margin, but also a risk envelopeto cover some overspending or potential penalties

Margin

Margin

Maximum revenue Minimum revenue Actual revenue

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Prepare a binding offer for a client: the risksThe risk evaluation approach should always follow the same logic:1. Qualification• Description of the risk2. Quantification• Cost of the risk (if possible to estimate)• Probability for the risk to materialize3. Valorization• Cost of the risk (if possible to estimate) weighted by the probability for the risk to materialize:

Cost ofrisk Probability Risk

value

Important:Your management should review this evaluation before submitting the offer to the customer

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Difficulties in a presales pursuit Missing elements to determine the target budget from the customer

Risk of proposing a price that would be out of range Risk of being either more expensive by far, or less expensive compared to

competition by missing something The customer can hide its internal complexity

Risk of submitting a very optimistic proposal Problem to mobilize the necessary resources to build and submit the offer

Risk to make the customer unhappy afterwards Budgetary risk (external resources to compensate are more expensive)

Insufficient margin to pass your company validation barriers successfully Risk of being unable to submit the offer

to the client Being only used by the customer

to challenge the competition Risk of spoiling your presales budget Opportunity is already lost but you don’t

know it

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Other classical difficulties in presales

Delay with request for proposal availability:o Because of the client: RFP is announced for the month M, but

the RFP is eventually published in M+3 or later (very frequent) o Because of your own company: the salesman the client contact

who had received the RFP did not read their emails or did not checked the incoming folders on their desk.

Missing several days or weeks in your response time Delay for responding already exhausted

Difficulties to find relevant references Lack of management support for the response Period of vacations with some major issues to mobilize

appropriate resources for responding Disagreement between response team members on:

o Costs and selling priceo Deliverableso Some details of the solution

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Conclusion and reminders Presales is a key function in most companies Difficulty to recruit presales consultants, number of candidates

is scarce since these are uncommon profiles Implies an in depth knowledge of the presales process Setup a connection with decision makers at the customer Evaluate structural needs at the customer Obtain a sufficient budget to answer a request for proposal Gather a relevant team for the pursuit Respect of confidentiality Produce an offer with professionalism Management validation is mandatory Succeed with the offer supporting meeting Always negotiate with a objective to succeed Organize a « post mortem » after the pursuit