So you’ve been asked to participate in an e-sourcing event. Now what?
Whether you’re new to e-sourcing or have plenty of experience, every e-sourcing invitation represents a valuable chance to help your business succeed. By participating in e-sourcing events, you can:
- Win new contracts
- Grow existing accounts and strengthen customer relationships
- Gain crucial visibility with targets and prospects
- Get a clear sense of what competitors offer and a better grasp of your market position
- Level the playing field with sellers of all sizes
- Hone your value proposition to capture follow-on business
Eight E-Sourcing Success Strategies
So how can you reap these rewards? Here are eight success strategies designed to enable you to make the most of every e-sourcing opportunity.
1. Approach e-sourcing as an opportunity, not a threat. Don’t skip e-sourcing events from fear that participating might erode your current position. Instead, use them to enhance it. Here are some mental pitfalls to avoid:
- “I already have the customer’s business—I don’t want to get ‘sourced out’ of my position with this account.” Even if you’re the current seller of choice, customers may ask you to participate in e-sourcing events. But that doesn’t mean they’re seeking to replace you. In fact, they may invite you to bid as a way to confirm that you’re still the best source of supply. Either way, you need to put your best foot forward. Skillful participation not only defends your position as the incumbent seller, but also lets you demonstrate new ways you can deliver value and save the customer time and money—helping you boost business, not lose it.
- “Why should I join a bidding contest that’s just going to force me to cut prices?” Though customers may conduct e-sourcing events as a way to lower prices, the situation can actually work both ways. Many reverse e-auction formats provide market visibility to prices at which other sellers are bidding, giving you valuable information about where you stand. For example, if you know you can profitably sell an item for $10—yet the lowest competitive bid is $12—you don’t have to drop your price to rock bottom to win.
2. Take every invitation seriously. While e-sourcing events can range from simple requests for information (e-RFIs) to requests for proposals (e-RFPs) or quotes (e-RFQs) to various types of online auctions, they often build on each other—so ignoring invitations can be risky. For example, some sellers dismiss e-RFIs as customer fishing expeditions because they don’t offer the definite reward of a contract. Be sure you don’t make that mistake. E-RFIs enable buyers to gauge the market and learn about new technologies, approaches, and players in their space; the information they glean helps them narrow the field of sellers invited to subsequent events, where business is awarded. By participating early on, you can establish connections that lead to later wins.
3. Start preparations well in advance. Online auctions are like eBay on steroids. A lot can happen in a short period of time, and thorough preparation will help you deal effectively with the pressure. Here are some key guidelines to follow:
- Be proactive.
- Assemble the right team. Include the sales manager to handle event preparation, engineers and product specialists to cover content, pricing team members, and any others with relevant expertise.
- Understand what the buyer wants.
- Use training and tools to learn e-sourcing technology. A fast-moving live event is not the place to learn how to manage or revise a bid. By familiarizing yourself with the technology ahead of time, you can avoid serious mistakes. Buyers often schedule mock-event training sessions to help sellers know what to expect; you should join these no matter how many e-sourcing events you’ve participated in, since parameters can vary significantly. You can also log in to Ariba Sourcing™ and click on Help to access tutorials and user guides that teach you how to successfully navigate e-sourcing events, or contact Ariba Customer Support for additional assistance in multiple languages.
- Be ready for overtime. The last hours or minutes of e-sourcing events can spell the difference between success and failure, so build in flexibility with your team to be sure you’re covered if scheduled end times are extended.
4. Communicate effectively to build relationships.Whether the person running the e-sourcing event is a systems admin, a sourcing buyer, or the director of e-procurement, he or she represents the front-line access to that customer’s business. A thoughtful, professional approach in every interaction can help open doors that lead to important connections.
5. Stay on top of other bidder actions to drive your own responses. While e-RFPs and e-RFQs are a more closed process—allowing you to see where you stand, but not what other sellers are bidding—e-auctions are usually far more transparent. Depending on the event parameters the buyer sets up, you can often discern whom you’re competing with, what their pricing is, who has the lead bid, how you rank in relation to them, and more. You can use this information to position yourself more effectively over the course of the event.
6. Don’t try to game the system. Waiting until the end of an e-auction or event to place a bid is a poor strategy that can backfire. In this way B2B e-sourcing differs markedly from eBay-type auctions, since buyers want sellers to engage at a deeper level. Those who try to jump in late in the game are often eliminated from the running or even barred from participating.
7. Add information and offer alternatives. If the buyer hasn’t requested information on some aspect of the project that you think is essential, relevant, and/or might differentiate you from other sellers, contact
them to discuss including it. This not only influences the process in a way that helps you provide a better bid, it also demonstrates your knowledge and value-add. Feel free to offer alternatives when appropriate as well. For example, if a customer requests a specific quantity of an item, and you can provide a different amount at a better price, don’t hesitate to communicate that directly.
8. Take a big-picture view of what defines success. Even if you don’t land a large contract, e-sourcing can still open the door to new relationships and opportunities that might otherwise be unavailable to you. Aim for progress, not perfection. By performing well with a small portion of business, you can position yourself to become a preferred supplier later on.