I’ve seen my fair share of sales pitches for the outsourcing industry, and currently every aspiring service provider touts their “As A Service” offerings. I can’t resist sharing some observations on how these companies can best connect with the needs of enterprise buyers.
In the spirit of “context matters,” let’s start with the audience. Today’s buyer of commercial services is better prepared than ever before. Indeed, they are forewarned about the pitfalls experienced via prior generations of outsourced services. Most are working from a well-informed basis of knowledge.
The majority of buying executives are adept at networking; they are connected to their peers and they share experiences readily. The best way for a service provider to position itself favorably is to have a strong reference base from which to work. In the age of social networks, reputation really matters.
The buyer generally organizes a process around securing some form of value. The measure of value can take various methods, and may even evolve over the course of the evaluation, but make no mistake – value is the ultimate determinant of a decision to source services with a third party.
That may seem like an obvious and well-understood tenet, but in the heat of a commercial transaction both buyers and prospective service providers often lose sight of the core value definition. To be a bit more contentious … in a competitive market, the lowest price is seldom a broad enough definition of value.
Beyond the fee-for-service dimension, common elements of value for “As A Service” offerings include:
· Client confidence that they will receive the promises being made
· Strong market position of the provider
· Demonstrated commitment to the service category
· Candor and transparency in the resilience of the services
· Informed perspective on risks and high confidence in the vendor’s ability to mitigate them
· Cultural alignment with regards to unknown future events
· Growth potential for the relationship to evolve towards new sources of value
For a prospective service provider to win the right to serve one of today’s discriminating buyers, they must meet a high standard of proof that is evidenced across a broad set of hurdles. Pretenders are easily smoked out.
I would urge any service provider to fully commit to all of these five elements:
1. We are clear on the value we provide for our clients.
· We create tangible value easy for others to recognize and measure.
· We understand our competition, and are comfortable with our relative positioning.
2. We are committed to be a leader in this service category.
· We are investing in the provision of defined and scalable services.
· We have earned the right to serve discriminating clients, and they are satisfied.
· We manage our offerings through a services lifecycle that provides confidence in future relevancy.
3. We are prepared to do business on terms that represent the state of the market.
· We offer commercial terms and pricing that aligns with the needs of our market, and which conveys value to our customers.
· We are prepared with standard scope of service that reflects our investment in proven, scalable offerings.
· We provide an engagement interface that makes it easy to do business with us.
4. We provide transparency in the future direction of our services.
· We publish roadmaps for our offerings that reflect the perceived needs of our market, and the feedback of our customers.
· We anticipate changes to our offerings and communicate those candidly.
· We readily engage with others in our industry to integrate our offerings seamlessly into the operations of our clients.
5. We manage the inherent risks within our business.
· We know where we have vulnerabilities, and we mitigate those appropriately.
· We are prepared to assume the liabilities inherent to being a market-leading service provider.
If you are a service provider offering “As A Service” solutions, I suggest that this outline should be your agenda for your next sales call. Beyond the sales conversation, this outline needs to form the basis for your company’s go-to-market platform.
In this way, your targeted customers will see your offerings as being organized and integrated towards an expression of value that they will more easily recognize and be able to evaluate. “As A Service” means an end to the islands of misfit toys.
Peter Allen has many years of operating experience as a top executive and strategic advisor for companies of all shapes and sizes, with focus on technology-enabled business services. He is now a Boston-based Managing Director at Alvarez & Marsal.