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 capture strategy meeting. The sales manager responsible for the territory was presenting a new opportunity to the management team and walked us through the capture efforts. Financially, the business case looked good. The level of risk seemed low, and the customer was one 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.
What is a capture strategy? Other than just sharpening your pencil on price, what else can you do to win new contracts? Today we will discuss 7 types of capture strategies that can help you win business without giving up your profit.
Hope is a Bad Strategy
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 region of the world. We know the competition well.
So, what was the problem? Compared to the competition, we were a much larger company with a higher cost structure. Customers repeatedly told us we were too expensive, meaning that price alone would not win the project for us – as it never did before. Thus, hoping we could bid the project at a low enough price to win was a bad strategy.
We needed to shift our approach and develop a capture strategy that was based on more than just a good price. 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. Let’s dig into some alternative approaches that are proven to win.
Choosing a Capture Strategy: Don’t Overcomplicate It
When 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.
RELATED: What Your Customers REALLY Want
Capture Strategy #1: Emphasize Your Low Cost
The most commonly used sales technique is winning business based on price, as our sales manager had recommended. It’s a logical choice because price is always important.
Take Walmart, for instance. Walmart attracts many customers because of their rock bottom prices. No consumer, company or organization wants to pay more than they need to. But there are other factors, and as we know, what you may gain in price, you may lose in quality. 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.
Thus, 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. Here are 6 more 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.
Location also worked against us. We lost another client’s business because our competitor happened to be just minutes away from the customer. 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 further down the road?
The point is that location can influence a customer’s contract award decision making. Find ways to use your geographic footprint to your advantage. 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. Customers want the best quality they can get, and quality often commands a higher price.
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 the result she strives to achieve? Unlikely.
But, there are limits and superior quality only goes so far. If the high-end supermarket suddenly tripled their prices, would we still shop there? No. If you get too greedy, your consumers will eventually go elsewhere.
RELATED: Sample Format for an RFP Response
Capture Strategy #4: Offer Speed
My firm has the hard way that speed is an excellent capture strategy. 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, when customers need 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.
This recent experience highlights 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 a customer delighter and can make or break deals. If you can serve your clients with speed in such a way that your competitors cannot, there is a premium price to be charged. (Overnight shipping anyone?)
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Capture Strategy #5: Win with Your Experience
Depending on your industry or business, special experience can differentiate you from the competition. In your customer’s eyes, your relevant experience, pedigree and knowledge you bring to the table helps the customer reduce their risk.
Thus, if your business has particular experience or skills that can assure customers you have the expertise to handle the project’s complexity, 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.
RELATED: How to Write a Winning Response to an RFP
Capture Strategy #7: Offer a Complete Package
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? Customers place value on one-stop-shopping, which is partly why box stores like Walmart and Target are so successful – customers want convenience.
If you have adjacent capabilities to a given business opportunity or a customer RFP, consider including those added services to your offering.
To illustrate this point, here are a few examples:
- Include replacing a customer gutters as part of the new roof you install
- Include two years of tech support and training as part of your software license agreement
- Package all the hardware you supply to the customer’s product line in convenient kits
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 they often value – many of which carry a premium. Think about what it is that makes your business unique and what it is that makes it special. Sell that!