7 Types of Capture Strategies That Help You Win
A Good Capture Strategy is More Than Just a Good Price
Last week, I sat through a disappointing capture strategy meeting. The sales manager responsible for the territory was presenting a new proposal to the management team and walked us through the opportunity. Financially, the business case looked good. The level of risk seemed low, and the proposal was for a customer we did not have a great deal of business with, so strengthening the relationship with this client would be a good thing. Finally, when it came down to presenting his capture strategy, the highly experienced sales manager said “We can win with a good price.” It was this specific statement that concerned me.
Hope is a Bad Strategy
The key to developing a great capture strategy is to find the best way to compliment what your customers want with what you do well. When the sales manager presented the proposal to us, he identified the likely competitors we would be up against with the bid. And because we are in a narrow industry with niche products, the anticipated competitive landscape contained the same 5 or 6 other companies we typically compete against in that particular region of the world. So we know the competition well. The problem? We also knew that price was not our strength because we were a larger company and our costs were generally higher. Price alone would not win the project for us. So hoping we could bid the project at a low enough price to win was a bad strategy.
Choosing a Capture Strategy: Don’t Overcomplicate It
When it comes to competing for business, there are several types of capture strategies and competitive advantages you can consider. When reviewing the list below, think about what it is that your company does really well, and what it is that makes you different than your competitors. Ultimately, when it comes to your proposal, you want to emphasize some of the benefits you bring to your customers that your competitors cannot.
Capture Strategy #1: Emphasize Your Low Cost
The most commonly used sales technique is winning business based on price. It’s a logical choice because price is always important. Take Walmart, for instance. Walmart attracts many customers because of their rock bottom prices. But as we know, what you may gain in price, you may lose in quality. And for me, the closest Walmart is a 45 minute drive. So, in my case, the time and gas to get there does not make it worthwhile. But let’s be real: no consumer, company or organization wants to pay more than it needs to. And while price is very important, it should not be the only thing you think about in terms of your capture strategy. Affordability is a given, not a strategy. So here are other capture strategies that may help you make your next sale.
Capture Strategy #2: Sell Your Location
The location you offer your customers can sometimes be important. I have had customers tell me they selected my company because we had a low-cost manufacturing center in Mexico, which they believed would help them obtain a good price over a longer period of time. Conversely, my firm has also lost another client’s business because our competitor happened to be just minutes away. The client felt they would get better service from our competitor, than they would with us because our offices were a 3 hour flight away.
Need another example of location advantage in business? Why do you stop for gas at the station right off the exit ramp of a highway even though you can save a little money by driving just a mile down the road?
But we can’t be everywhere can we? Here’s a tip: my firm typically offers to embed some of our employees within our clients’ offices for the duration of the project to sweeten our offer.
Capture Strategy #3: Demonstrate Your Quality
It can sometimes become the opposite of low cost, but having superior quality may be a differentiator that helps you establish a competitive advantage and win business. Take food for example. My wife is a fantastic chef. And while it costs more, she chooses to purchase ingredients from higher end stores with fresher, higher quality ingredients. Can she make homemade gnocchi with sun dried tomatoes in a rose sauce using ingredients from a discount food store? Sure. But will it be of the end result she strives to achieve? Unlikely. Then again, if the high-end store tripled their prices, would she still shop there ? No. Even though price is important, by offering and selling to your reputation or history of quality, you can overcome a cost disadvantage. But if you get too greedy, your consumers will still go elsewhere.
Capture Strategy #4: Offer Your Speed
Our firm is going through a difficult time right now. We are big, and we are therefore slow. And we know it. In recent years, our history of capturing and winning business with tight timescales has been poor. Even if we offer the best price in town, if a customer needs the project completed in 6 months and we see no way we can offer anything less than 10, our chances of winning a contract are slim to none. Unfortunately, we have multiple data points to support this.
But our experience is also highlighting the fact that there is value in speed. In other words, if a client has a tight deadline, they are likely willing to pay more to preserve it. Speed is an excellent capture strategy. If you have the ability to serve your clients with speed in such a way that your competitors cannot, there is a premium price to be charged. (Overnight shipping anyone?)
Capture Strategy #5: Win with Your Experience
Depending on your industry or business, special experience can help you differentiate yourself from the competition. If your business has particular experience or skills that give you a competitive advantage, you should emphasize this in your capture campaign. All things being equal (including price), experience holds value to your clients. Case in point: if you were to get LASIK eye surgery tomorrow, are you going to select the doctor who has done 2 surgeries, or 2,000?
Capture Strategy #6: Brag About Your Financials
For a given program and project that may be of higher risk and complexity, your customers may value working with a firm that is financially sound, because that firm can tap into the cash reserves if needed. To this end, every year, my company examines our supply chain base for performance. One of the key measures we look at is financial stability. For higher profile, higher risk projects, we avoid selecting suppliers or partners who have a weak, or declining financial situation. Simply telling a customer that you’re financially stable may not be enough. One way to demonstrate you have deep pockets is to show how your firm has applied more resources or accommodated scope creep on prior projects. Additionally, you can offer to invest in project, in exchange for publicity (or some other benefit of interest to you). Your financial stability makes customers feel better, so consider bragging a little in your next capture campaign.
Capture Strategy #7: Offer Some Variety
Walmart may be able to offer a great price, but if you are an avid runner, you are most likely going to purchase running shoes from a store that specializes in footwear. Why? Because customers sometimes place value on having options. In the case of running shoes, an avid runner is usually willing to pay more to find the right pair of shoes for their routine. If you owned a bakery, would you only sell one type of cake? If you owned a used record store, would you only stock Bob Dylan albums? While there is value in specializing in one particular thing, sometimes customers need options, and they may be willing to pay more to obtain access to those options.
Successful Capture Strategies Differentiate
A winning capture strategy brings value to customers in a way that your competitors cannot. While price is always important, there are other things you can offer your clients that may carry a premium. Think about what it is that makes your business unique and what it is that makes it special. Sell that!