Business Intelligence on Getting and Retaining Customers
Chances are, roughly half of your sales force isn’t meeting its quota.
The most common management response is to blame the leads — you need more leads, better leads, more qualified leads. But that response would likely be wrong. According to research by Primary Intelligence, you already spend 140 times more on advertising and other lead generation activities than on understanding how buyers make decisions.
Does that really make sense?
Ask your under-performing sales representatives why they think they are winning and losing opportunities. If they say they lose because of price, contract terms, or buyers’ pre-existing relationships with competitors — and that they win because of their strong relationships and outstanding support — you can be sure that they don’t really know why they win and lose.
In my discussions with tens of thousands of buyers over the years, less than 6 percent cited price as the primary non-selection reason. And fewer than 4 percent cited a relationship as the primary reason they did choose a supplier.
Staffing Industry Analysts teamed with Primary Intelligence to interview staffing buyers on their selection practices. Through our discussions, we learned of many ways in which staffing firms are losing on opportunities. Here, we share what staffing buyers told us.
Top Sales Blunders
We identified nine blunders that cause potential clients to walk. Some of them may surprise you.
Sales Blunder 1 — Don’t explain or clarify your delivery platform
One senior director of staffing at a client firm notes: “When we are evaluating staffing firms, we spend a lot of time teasing out what [a firm’s] process is and they don’t always like to give it up real early on in the process.”
Firms that failed never properly discussed with prospective clients what they do and how they do it.
This did not bode well for buyers, where a majority (65 percent) said operational functions were a key factor in the selection process, as well as an obvious focus for ongoing governance of firms. This included understanding how firms recruited, screened and retained employees; the on-boarding and off-boarding process; which resources would be consistently allocated to the client; and what the day-to-day interactions would look like, with or without a vendor management system.
Discussions about operating processes were crucial for buyers, in part, because it allows a buyer’s evaluation team to understand the level of difficulty in implementing and maintaining a program — which was another key requirement for buyers.
As one buyer explains, he selected a firm primarily because its platform was easier to understand and discuss. “For me, the difference was the other suppliers were coming back with standards and measures, metrics and requirements that were very difficult to discuss,” he says. “With [the winning firm], we had a far more flexible approach where I had the impression that it was taking into account what was really important for us.”
Sales Blunder 2 — Hide your recruiters behind the sales team
Staffing firms that succeeded with buyers showcased their platforms by involving recruiters in the sales process. This allowed buyers to understand the experience and education of the recruiting team, as well as how well recruiters were tuned into their local markets through various association memberships.
“The hardest thing in the world is to convince a supplier that [they] don’t need to hire salespeople; [they] need to hire recruiters,” says a strategic sourcing manager. “You can always tell when the light bulb comes on and they stop hiring salespeople [and] thinking all they need to do is get to know our managers. They stop wasting our money and they start hiring recruiters.”
Sales Blunder 3 — Don’t let prospects interact with your client base
Strong reference customers were another somewhat obvious avenue for confirming delivery platform. However, staffing firms that really capitalized on their client base organized independent, on-site visits early on in the process.
During a managed service provider (MSP) evaluation, a global commercial manager at a client firm was disappointed that staffing firms waited until late in the process to introduce the client base. “We needed to see it in real life and to understand how it works in practice,” the manager says. “If I was a salesperson, that’s what I would leverage more.”
Involving the client base early on in the sales process not only enabled prospects to better understand the firm’s operational processes, but also provided an additional resource for best practices. Nearly every buyer interviewed was eager for practical industry and peer feedback, and they valued staffing firms that could offer access to their client bases.
Sales Blunder 4 — Never let on that you understand the buyer’s needs
Demonstrating an understanding of the buyer’s specific needs may sound like trite advice, but staffing firms were frequently accused of either failing to understand the needs of their prospects, or, more important, failing to show the clients they understood those needs. Buyers wanted firms to follow basic steps in the sales process, such as taking the time for a pre-proposal discovery discussion or visiting the hiring managers and other on-site facilities.
Buyers were also frustrated when they were forced to comb through responses to requests for proposals to determine how well the firms met their stated goals. That is not to say, however, that buyers were looking for carbon copy answers. Rather, they wanted staffing firms to provide a clear explanation that showed they understood the client company’s needs and how the solution would map to those needs, even as the objectives evolved.
Sales Blunder 5 — Keep your prospects and clients ignorant (educated clients are more work)
A number of interviewed buyers wanted to move their contingent labor programs into “phase two” with improved processes for evaluating and managing firms and expanding structured programs into additional departments. As a result, buyers were thirsty for best practices and analysis from firms — specifically MSPs.
In fact, one contingent labor manager advises other buyers to give more control over to staffing firms by “accepting the suppliers’ best practices, really having an open mind, and being prepared to throw away some of the potentially well-established processes they might have in place in order to take a potentially more radical approach.”
Sales Blunder 6 — Never, ever save the buyer money
A majority of the buyers we spoke to (70 percent) indicated they used structured rate cards and rigorous market research to determine pricing, and regularly sought feedback from staffing firms on bill and pay rates. More important, buyers needed to justify return on investment and cost-savings. However, specific cost-saving strategies were typically hazy or overlooked by staffing firms, landing them in a precarious spot for periodic contingent labor evaluations.
Buyers looked for firms that help save money, but not just in bottom-line fee reductions. In one case, a staffing firm was praised for finding a creative approach to cost saving by suggesting blacking out holiday and vacation pay from the mark-up until the employee is eligible.
Buyers appreciated cost-saving approaches as they demonstrate a staffing suppliers’ long-term investment in the client.
However, one buyer was disappointed in his MSP’s cost-saving strategies to date because, while moving to the MSP platform increased bill rate negotiating power, the firm had not attempted to reach beyond bill rate savings to a longer-term plan. “I was expecting the supplier to bring in that best practice and show us how we can beat the market and where the opportunities for additional savings are,” the manager says.
Sales Blunder 7 — Lose interest quickly after the evaluation process and assume the relationship is safe
One staffing director says he evaluates new firms continually, simply to keep a fresh perspective of the market and ensure that poor-performing firms are rooted out early. “People get bored of other people,” he says. “I don’t want them getting bored of me or my customers, so we let them go unless we have a great one — and the great ones we take really good care of.”
To keep the relationship active, buyers wanted staffing firms that actively engaged in performance reviews, kept up to date on how performance was being measured, and, most important, maintained continual dialogue with the client about concerns, successes, suggestions for improvements and industry insights.
Sales Blunder 8 — Say you can meet a buyer’s requirements, just to get your foot in the door
Buyers recognized the competitive landscape of staffing, and reiterated a “no tolerance” policy for misleading information about capabilities, particularly in reference to meeting specific employee segment requisitions.
In one case, a senior staffing director encouraged a promising vendor not to bid on engineering requirements because he knew the vendor would fail, therefore burning bridges for information technology-specific work in the future. “With a lot of agencies what I find is they’ll tell you, ‘We recruit for IT and engineering,’ and what that really means is they recruit for IT,” the director says.
Sales Blunder 9 — Be a vendor only; partnerships are for suckers
Buyers developing a structured contingent labor program typically start by consolidating down to a finite group of staffing firms. In addition to determining capabilities, quality and cost, these buyers were identifying firms that could act as partners in evangelizing the new process internally.
Most notable, buyers considered staffing firms to be “partners” when they supplied value-added features like market intelligence. For example, a global workforce manager was particularly impressed with a staffing firm that regularly provided updated market feedback about her company, whether it was rates that did not align with other companies or rumors about the company’s work environment. “I can’t be everywhere,” she says, “and it’s always easy to hear the good stuff, and never easy to hear the bad stuff. But if it’s out there and being said, I would want people to share that.”
Clients also valued resources such as rate card development assistance, access to market economists and other market analysts, ongoing consultation for program improvement and assisting hiring managers in creating or refining requirements when needed.
Remember, too, that a partnership goes both ways. The best staffing firms will look to their buyers as a source of information and inspiration. Like a ship following a foghorn, listening to the voice of the buyer and using it to help guide your path can often be a key step in reaching your own goals.
We identified these blunders after talking to just 20 buyers. These failing sales approaches were readily apparent across staffing firms of all sizes — staffing leaders, midsize firms and the smallest firms. These are not isolated mistakes; any company can make them. However, as the buyers indicated, for every blunder identified, there is a corresponding best practice that can help your organization differentiate itself from the competition.
Note: In conjunction with Staffing Industry Analysts, Primary Intelligence interviewed 20 contingent labor buyers to identify why staffing firms fail and succeed. Buyers were also questioned on what it takes to sustain and retain client relationships.
The research took place from December 2010 to February 2011. All buyers interviewed were responsible for evaluating and contracting with staffing firms. Buyers’ titles included senior directors, sourcing managers, and procurement and HR analysts. Fifty percent held a director-level position, and 35 percent had global responsibilities. The buyers were primarily based within the United States and represented industries ranging from finance to energy to pharmaceuticals. Technology companies were largely represented (35 percent). The majority of companies had revenue of more than $2 billion.
This article originally appeared in the 2011 Staffing Industry Review.