Successfully Targeting Large Companies
The economy is cyclical; today’s depression will be tomorrow’s boom. With this in mind, while SMEs do need to consider potential short term cost cutting measures and streamlining of operations, they should also continue to invest in securing contracts with larger organisations in the mid to long term.
Large companies are always worth targeting since they are more cash rich than their smaller counterparts. In addition, many of these large companies are in the process of slimming down internally and are outsourcing to gain skills, which represent an ideal opportunity for Midlands technology SMEs. Whereas the large companies will inevitably retain their core skill sets of project and commercial management, technical expertise however can easily be outsourced.
Large organisations will have a perception that you are technically competent and flexible, but not a sound business. So counter that perception by communicating about business, that you are a sound company, good to work with and that you can make a difference.
Communicate, communicate, communicate and don’t give up. Have an 18 month communications plan and follow it through.
Why are large organisations looking to work SMEs?
We recently conducted a perceptions survey to analyse the issues facing SMEs in trading with larger ICT companies. We found that large organisations recognise that SMEs have some undeniable strengths including:
When putting all these strengths together, the greatest benefit an SME can bring to the large organisation is “project success”, something rare in large projects if you believe the press. SMEs are really good at drilling down to the detail to deliver practical working solutions. In addition, SMEs tend to be very good at reducing risk to the client by incremental migration solutions from legacy systems, rather than parachuting in a completely new system.
How do SMEs open the door with large organisations?
Whilst large companies rate the technical and relationship skills of SMEs, they will worry about the SME’s business being sound, so they demand “due diligence” (financial status, policies, procedures). An SME has to be ready for that, but it is not the hardest part of courting and securing the business.
The main challenge is the timescales over which large organisations operate, with bidding processes that can last 18 months or more. To survive this process the SME needs to maintain business with existing clients and develop a good perception of their company and their team in the minds of key people in prospective large company clients prior to the bidding process. This positive perception is the key. Passing due diligence is a necessary, but not sufficient condition to get a contract. In addition the SME needs the trust from the personal relationships that their company will be sound and a good to deal with.
Many SMEs find this very difficult. They are good at following up leads, but lack the confidence to develop new business contacts. This can result in an SME resorting to trying to solve all their problems by product development: But it is often not the most advanced technology that wins, it is the relationship that gets the contract.
Talk business not technology
This is simpler than it sounds. It works for previous clients too. As an example, an SME we know tried it. They mailed 200 previous clients on the lines of “we are happy to have worked with you before – we are here to help when you need”. Within 3 weeks they had two orders, from clients who had forgotten about them!
So, start with the people that you know in your current and previous large clients. Talk about their business with them. Ask why they use you. Practice honing up your business benefits message on them. Then take your messages out to prospective clients like them. While you are gathering this important information, it is worthwhile asking for personal referrals and testimonials. They are the very best way of showing that you are a sound company and good to work with.
How long will it take to get a contract with a large organisation?
You might strike lucky, but typically it takes up to 18 months from first contact to first order. This is due to a number of reasons including time taken to feel comfortable with a potential relationship, issues of budgets and incumbents may well mean waiting to the next financial year. However, there is no need to be disheartened. Successful SMEs have a marketing communications plan with a communication every three months, so set up your own plan. The returns will take time to develop, so be persistent. While some SMEs may develop a contact strategy internally, there are many regional marketing specialists familiar with the ICT sector which can help you develop that critical professional presence.
Evolve to meet change
SMEs have a major advantage over the larger companies that have higher fixed costs and less personal client relationships. The large companies will be losing staff and skills, so they will need you more. Change is opportunity. Evolve to meet the change.
Reference1: “A perceptions survey: Issues facing SMEs in trading with larger ICT companies”, March 2009, John W Beeston
The author: Dr John W Beeston
John is founder of www.themarketingworkspace.co.uk , a web-based service to help hi-tech company owners and managers to develop their marketing skills and markets. He has long experience of working in large companies and with small companies in the ICT industry. This has spread from technology research through systems and product development to technical and marketing strategy at director level. For over 15 years he has been acting as an independent advisor and mentor to high technology SMEs.