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What Happens When your Customer Becomes your Competitor?

Posted by Philip Kreindler on 11-Aug-2014 11:30:00

Customer becomes Competitor


You have to make a good case to get the business when you are competing against another supplier. But just think how good your proposal has to be if you are competing against your own customer!


Downsizing means insourcing

Our client is a supplier to the mining industry, keeping fleets of highly specialised vehicles running round the clock. After years of growth the mining industry was hit by a fall in demand for commodities, which meant a contract between our client and a mine - worth $2.5M - was at risk. With a reduction in the vehicle fleet size and people being laid off it made sense for the mine to take this specialist service in house. How could our client make a case for continuing to spend millions on an external supplier?


Becoming a solution provider instead of reducing price

Before the recession in commodities business was relatively simple – the mines didn’t have enough specialised labour for many functions and were willing to outsource and pay a premium price for vehicle maintenance. With profit margins under pressure there was a far greater emphasis on reducing cost, which presented our client with an opportunity – to deliver the best value solution rather than just the cheapest price.


A classic Complex Sale scenario

This wasn’t a case of shaving a bit off the price or writing a better proposal document. To win this significant piece of business against an insourcing option required serious and in depth work.

We ran a Winning Complex Sales workshop with our client and developed a Customer Engagement Model for use in this opportunity to renew the contract.

The sale eventually turned on our client’s ability to produce a concise and accurate Deal One Pager for discussion with the mining company’s top management. It broke down like this:


1.     Customer Objectives and Requirements

  •       Improve Safety

  •       Reduce Cost

  •       Increase Maintenance Awareness

  •       Improve Equipment Availability

  •       Fast Access to Expertise

2.     Addressing Customer Objectives

  •       New Safe Work Procedures

  •       Activity-based Pricing

  •       Cross-functional Training

  •       On-Site Presence and Access to Global Network

3.     Benefits for Key Stakeholders

  •       Meeting Safety Objectives

  •       Reduction of Monthly Service Fee

  •       Improved Balance Sheet

  •       Optimised Working Practices to Reduce Maintenance

4.     Why choose us

  •       Proactive on Safety

  •       Focused and Competent

  •       Local Proficiency

  •       Objective and Impartial Interventions

  •       Proven Track Record


A lot of groundwork

It took a lot of work to reach this point of course. The vendor sales team had to make sure they spoke to the full range of stakeholders, not just Maintenance and Procurement people. They engaged with Mining Planning, Mining Production, Finance and the General Manager. They had to fully understand the aims and objectives of all those stakeholders and come up with a solution that met all those needs and crucially, present a solution that clearly offered greater value than taking maintenance in house. 

This was a solution that went beyond just maintenance. For instance they looked at how investment in improving the roads would cut down on maintenance costs and showed huge confidence in their ability to deliver value by making payments based on delivering against KPI’s.

But at the end of the day, our client could put a Deal One Pager in front of their customer for discussion that turned out to be worth $2.5M.



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