The Name of the Game is Differentiation

on Monday, 09 March 2015. Posted in Techniques & Strategies

Times haves changed in government contracting. 

Once upon a time, in the land of Washington D.C., the Federal government actually preferred the use of sole source contracting and that was a key focus of every contractor. Contractors would jockey for position in the hopes of positioning themselves for and winning a sole source contract. Today, the days of hoping for and utilizing sole-sourcing as a core corporate strategy are pretty much over.

The government has slowly and purposefully increased competition requirements. Today, you may be up against 50 other companies responding to the same RFP. This example isn't an exaggeration. In fact, RSM Federal recently threw their hat in the ring on a contract and the interested vendor list totaled just over 50 companies.

The government is continually coming under fire to not only acquire the best products and services they can, but also at the lowest price - even to the detriment of quality and value. That's why you are seeing Low Price Technically Acceptable (LPTA) more and more often in government RFPs. But, this doesn't necessarily imply procuring the cheapest products. It means evaluating price and other factors, not limited to, quality, benefits, delivery speed, guarantees, and a whole host of other factors to get the very best deal. The problem for many companies today is that they don't communicate enough value, benefit, and other differentiating factors to minimize their competition's competitiveness.

Like you, we often hear stories of companies who lost a bid, but felt they were the most qualified or had the best products. It's marketing and branding 101 and it's as simple and as complex as that.

So how do you solve this problem? During a strategy session with Microgrid-Energy in St. Louis, Missouri, the question was raised, "What are the best practices for differentiation and how do successful companies do it? Just as important, as the leader in solar energy for the St. Louis region and much of the Midwest, our differentiation is critical to providing our general contractors with competitive advantage. So, what differentiation factors will help make our general contractors more competitive on single award (SATOC) and multiple award task order contracts (MATOC)?

How do you not only get noticed, but stand out from the crowd and SCREAM, "MY COMPANY IS THE BEST CHOICE"! There are two primary ways to solve this problem. The first is by implementing a process where you understand and know how to communicate your differentiation and the second is strengthening your capture strategy so that you ultimately produce more qualified opportunities to bid on. Just understand that adding more opportunities to your pipeline without clearly communicating your differentiation is akin to trying to fill a bucket with water when the bucket is riddled with holes. You will ultimately waste a lot of opportunities and precious time fighting a losing battle. That is why we recommend strengthening your differentiation first and then working on your capture strategy and why the remainder of this article will focus on differentiation.

Companies are constantly looking for and coming up with new ways to differentiate. Today I want to focus on just five of these strategies. These five strategies are in our opinion, the core pieces of differentiation that every company needs to understand and constantly refine.

1. Capability Statement: Your capability statement is one of your primary tools because, when developed correctly, is a key document that communicates the benefit and value of your products and services with the prospect and communicates the ability for your company to make a partner / prime contractor more competitive with you on the team. It includes who you are - an overview of the company, your approach to clients and / or partners, past performance, your products and / or areas of expertise, certifications, company data, and contact information. But most important, your focus is communicating value and benefit - not simply what you sell or the services you provide. These are the basics that MUST be in your capability statement. In addition to this, you want to approach this as a marketing piece and have it carefully designed to focus on value. This is not a place to skimp on graphics or the look and feel. RSM's capability statement also lists our areas of expertise and breaks out our services into categories using keywords and phrases that would often be used by a contractor looking for our services. We also suggest listing any government or commercial contracts that you have in order to build credibility and making buying easier for those already authorized to use those contract vehicles. We have several different examples. If you're interested, let us know and we'll send you a copy which you can review and use as a template.

2. Leveraging Past Performance: Whether it's your capability statement or your response to an RFP, you must clearly convey your past performance. Most companies don't do this very well. Part of this strategy includes an ongoing process of collecting past performance. In order to do this, you have to constantly engage your employees and find out what they are accomplishing for your clients. You should also do a debrief or after action review (AAR) after every project is complete. In one debrief, for one of our clients, we found that an on-site employee had been working on the next generation accounting system for a fortune 500 company and our client had no idea their employee had been doing this as a side project. So have a system in place for discovering past performance and then determine how and where you will communicate it. One recommendation is to create a past performance folder. You can use a word document or another tool like Evernote to track these. Just make sure the tool you are using has a simple search function. I like using Evernote for the simple reason that it will show me notes that are related to each other. So if I create each past performance piece under a separate note, the system will automatically find and relate other notes. This then becomes extremely helpful when you are looking for all past performance related to a specific topic. Finally, most companies in both commercial and government markets have a folder either on a computer or shared drive with past performance write-ups that they've used in proposals.

3. Positioning your Competencies: This is a process that you will follow each time you approach a new client or contract. The first step to positioning your competencies is something called Competency-Mapping. "Competency-Mapping is a method that forces you to evaluate and map the value and benefits of your products or services and differentiate them based on a specific prospect, that prospect's unique problems or challenges, and/or a specific opportunity." (Excerpt from RSM Federal's; The Government Sales Manual.) For RSM Federal, this process often starts with the simple question, "How is this competency important to the client and why do they care"? Starting with this shapes your process and forces you to answer the prospects most important questions. This approach allows you to take your competencies and map them directly to a prospect's problem or need which will result in a custom approach to solving your prospect's requirements and help you stand out from the competition.

When approaching a new client or contract, you have to take a step back and clearly understand what the client's greatest challenges / needs are, how you can solve their problems, and how best to communicate this information. The days of boilerplate answers and boilerplate capability statements are over. Sure, you can reuse marketing copy in your pieces and we are not discounting that. You just have to understand that the customization of your materials will go a long way toward differentiating you from your competition and thus winning more business. For example, if you serve multiple industries or niches, you may want to tailor your capability statement for each one. When you respond to an RFP, you will want to tailor the language in your RFP response so that those on source selection feel that you are responding directly to their requirements. Key point - whenever possible, tailor for each prospect or partner. It takes time but exponentially increases your chances for success.

4. By Product or Service: One of the most common ways to differentiate is by product or service. This one is a little more self-explanatory, but companies still miss out on a huge opportunity we find most can improve how they do it. When you are looking at your products or services, there are several factors to consider. When thinking about product differentiators, consider the following: quality, pricing, functional features, design, availability, and the knowledge / education level of the buyer on the product. When thinking of service differentiators consider these: Speed, lower risk, stronger processes, differences in project / program management methodology, past performance, level of understanding of the customer's processes and systems, geographic location, and reputation. These are just some of the factors that you need to consider when thinking about product and service differentiation. Even more important, none of the differentiator types we just listed are any good without using quantifiable and qualifiable metrics. You need percentages, dollar amounts, savings, opportunity cost, etc.

If you are responding to an RFP, you should be able to determine which of these factors are most important to the customer and then customize your response to highlight the areas that you are most qualified in. If you've attended one of our sessions at an SBA, Department of Veterans Affairs, or other National conference, you know the importance of collecting intelligence on an opportunity before the RFP or RFQ is released. It's a good idea to ask the contracting officer questions (better yet, talk to the program manager) about these factors in order to get a more clear picture of what their priorities are. Depending on the uniqueness of your product or service you may even be able to ghost your unique capabilities into an RFP. This only happens when you are communicating with potential clients well before and RFP or RFQ hits the street, and can only be done with proper communication, planning, and capture management. Engaging opportunities in pre-acquisition, before the RFP is released, is a key training focus with most of our clients. 

5. Through Teaming: It's our personal belief that teaming, when done correctly, can be one of your largest weapons in government contracting. Teaming has many different layers, but the most common is teaming for the purposes of winning a contract. We often work with companies on positioning with prime contractors and general contractors. Getting on a team is not the important piece. What's critical is how you position to get on the team and subsequently position during source selection and after the contract or task order is awarded. What good is it if you get on a winning team but you don't make any money? This happens often, especially with smaller companies. Your objective is to find the prime that is the best fit for your capabilities and has the best chance of winning the contract. This requires a little research on your part and there are many government tools you can use to find out who is interested in the contracts you are interested in and the past performance of the primes so that you can determine the best fit.

Here are just a few questions you will want to ask before approaching a company you want to team with. Do we already have a relationship with one of the interested companies? Do the interested companies already have a partner that does what we do? Do we have actionable intelligence on this opportunity that no one else has? Why would a prime want to work with us over another company? Does our company do something so unique that we would be an asset to any of the primes? Are any of the primes in our geographic location and for the purposes of this contract and does that matter? All of these questions revolve around one simple question you must answer for every company you attempt to team with:"How do we make the prime more competitive?" Because that's why they will put you on the team.

One huge benefit to teaming is that teaming with another company gives you third party credibility. This is especially true when the prime is a big defense contractor or a company that is well known in the market. Once you engage a prime and get on their team, it's to your benefit to work as hard as you can and devote all necessary resources to the RFP process. This not only wins the favor of the prime, it gives you leverage to talk to them about other opportunities they may have in their pipeline. One thing we always tell clients is that strong teaming relationships will increase your pipeline drastically over time as you continue to contribute and add value to the team. In the beginning, it may be you brining opportunities to the prime, but as you prove yourself, they will start to bring opportunities to you.

Summary: Learning how to differentiate and making it a core component of everything you do is absolutely critical to your success in government contracting (and commercial sales). The government faces thousands upon thousands of inquiries every year from companies wanting their business. Your job is to do everything you can to stand out as not only the right, but best choice for the government every time. One way you do this is by being very selective of the prospects you approach, how you approach them, and customizing your message to best fit their needs. Follow these five steps and you will improve the quality of your communication, differentiate yourself in the market, and accelerate revenue.  

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Michael LeJeune is a Senior Consultant and Program Manager at RSM Federal, a federal consulting and business-acceleration strategy firm that helps businesses in accelerating the education and processes necessary to winning government contracts. For more information, videos, and contact information, please visit www.rsmfederal.com

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