Does This Software Make Me Look Fat?

“Does this software make me look fat?”

Hmmm . . . . what will complete honesty get you? How much should you tell your prospects? Something to ponder when debriefing your colleagues about your latest sales call. “Boy, that was an awful meeting. The way that company works with suppliers is like a train wreck. I’m glad I don’t own any of their stock.” Was your prospect too demanding? Price gouging? Plain obnoxious?

That’s exactly what your prospect needs to know. According to Dr. Mary Lacity, Professor of Information Systems at the University of Missouri, St. Louis, “clients were most satisfied when suppliers earned their target margins.” In fact, in a recent IT outsourcing study she conducted, 60% of the cases (n = 85) matched those criteria. Similarly, a large percentage of negative outcomes occurred in situations in which vendor margins were below expectation. You get what you pay for. Duh!

Dr. Lacity addressed last week’s session for the Center for Management Information Technology in Virginia. Her talk, entitled What Suppliers Say about Clients and More . . . , reminded everyone of the business value of brutal honesty. “Thanks, I needed that!”

The problem is that for many salespeople, the ability to say what you see is stored in a recessive gene. Instead, salespeople are told, “do whatever it takes to win the business!” That means invoking the oft-reviled D-word, then cutting support. “Hey, we had to recover the discount from somewhere!” Sure, some salespeople over-promise, and then use fine print to protect contractual loopholes. But at the end of the fiscal year, salespeople just call that earning a bonus.

And in the interest of pointing fingers, prospects create their own disincentives for brutal honesty by predictably shooting the messenger. “You’re not on the short list. If you wanted this project, you would have complied with our performance milestones, and offered more aggressive pricing.” Clearly, customer rage for over poor product performance often has its own back story . . .

I’ve been that messenger more than once. Injuries aside, I still prefer to err on the side of candor. “Never say anything behind someone’s back that you wouldn’t say to his or her face,” my mother told me, not knowing how useful the advice would be forty-five years later.

Based on Dr. Lacity’s presentation, when the goal is successful outcomes, here’s what suppliers should tell prospects and customers:

1. “We may not want your business.” –We’ve experienced the Winner’s Curse, and our CFO doesn’t want a repeat.
2. “The worse our business gets, the worse your business gets.” –The survival of your business depends on the survival of your key suppliers.
3. “We hate novice customers.” –Expect bumps in the road, and have the will to overcome them.
4. “If procurement says ‘it’s all about price,’ don’t expect innovation.” –If your business strategy favors commoditization of your own product, your purchasing tactics will work just fine.
5. “We are not insurance agents. We cannot absorb all of your risks.” –What you’re asking for requires a new pricing and delivery model.
6. “We can spot a faux bid.” –We are not in business for the purpose of keeping your current supplier’s prices low.
7. “The length of your RFP is ridiculous.” –We can’t prepare this RFP when the expected revenue doesn’t cover our investment.
8. “Get real with the numbers.” –No client has ever achieved year-over-year productivity gains like you’ve specified.
9. “Your advisor may not be helping you.” –I know that Jim advised you when you were with your previous employer, but how much experience does he have in your current industry?
10. “There is no such thing as a fixed price.” –Any products or services outside of the scope of our proposal will require a separate purchase order.
11. “Where are your good people?” –Really . . . who will lead the project on your end?
12. “We sometimes invent new buzzwords for old ideas.” –Don’t ask us about application hosting and dashboards when cloud computing and business intelligence sound so much sexier.
13. “If it favors us, we’ll stick to the letter of the contract; otherwise, it’s the spirit that counts.” –Understand that if you’re inflexible by holding our feet to the contractual fire, we’ll do likewise.
14. “We have to trust you too, you know.” –It isn’t just about salespeople burning client relationships . . .

Does this software make me look fat? Yes, dear. And I hope my honest answer will lead you to best practices. One characteristic of a successful vendor-client relationship is that it reeks from brutal honesty. After all, who is served when vendors do whatever it takes to close the business? And can customers achieve goals when they make difficult demands in the buying process, but learn little about whether they’re achievable?

Whether you’re a vendor or a customer, why wait until you’re both knee deep in low-margins before finding out?