It’s always been hard for small and midsize companies to win large account business against large competitors. Big corporations have big marketing budgets, professional capture teams, and compatible ways of working. But smaller companies have always had the edge in innovation. What if that is no longer true?
Historically, smaller companies have been the leaders in bringing new technologies to market. Innovation, coupled with flexibility and personal attention, often led to big sales wins for savvy smaller companies.
Recent research, however, suggests that the big companies have been closing that innovation gap. In “The Gap Between Large and Small Companies is Growing. Why?” (HBR August 2019), the authors studied several gaps between the bottom 30% and the top 30% of companies listed on US stock exchanges, ranked by market value of equity.
The gap in median market value between the smaller and larger groups increased from less than $.5 billion to almost $3.5 billion (in 1981 dollars)—the big companies growing and growing while the smaller stagnate. In today’s dollars, the gap is $8 billion! The performance metrics also differed markedly. The bigger companies are getting more profitable while the smaller ones are unprofitable. In 2015-2017, almost two-thirds of the smaller 30% of publicly traded companies lost money in an up market.
The authors attribute this increasing performance gap to “the rate of investment in intangibles” between the large and small companies. Smaller companies have lost their competitive advantage in innovation because they have failed to invest sufficiently in intangibles—such things as R&D, brands, and technology.
Even if your company is private and you are smaller than those in the sample, this message should resonate with you if you sell B2B to large companies. If you are unlikely to have a real or perceived advantage in innovation, how are you going to win big company business against big company competitors?
Here are some Whale Hunting intangible investment strategies:
Create a Market Niche.
A well-crafted and carefully researched market niche is essential. It doesn’t need to be small and restrictive; in fact, it can be a fast track to brand recognition and market domination. Hundreds of ways exist to define a niche, but you can start with your company’s core capabilities. What do you do best—whether that’s exactly what you’re doing now or what you could do. Focusing on the specific needs of large companies could be the beginning of a niche—match that to an industry segment, geography, and products or services that are hard to source from other big companies, for example.
Invest in a Large Account Sales Strategy.
Unless your company sells technology, you may not need to invest heavily in R&D. But other intangible investments are vital. Winning large accounts consistently requires a carefully crafted sales process pus training for your sales team and team leaders to manage it. Organizational development increases productivity and outcomes—such as an investment in realigning sales and marketing for a new approach to large account sales. Market research is another investment, especially to support and refine that new niche strategy. Software tools may give you a competitive advantage.
Behave like a peer.
Most large companies strive to be process-driven and rule-governed in all departments to remain manageable. The ways of doing things are well-documented and supported by procedures, manuals, diagrams, illustrations, and training modules. They may include detailed “Standard Operating Procedures” (SOPs) for almost every function that people carry out. In these ways, large companies may operate very differently from your company. If your sales and operations teams fail to anticipate these differences, you can lose a deal from the outset. Invest in becoming process-oriented in your discussions, presentations, proposals and statements of work. Use short executive summaries, named processes, and frequent illustrations. When you win business, bring your new customer onboard using a standard project management procedure.
Mitigate risk.
Big company buyers are motivated more to avoid risk than to seek advantage. They don’t always choose the best possible solution. Ultimately, they want what they perceive to be the least disruptive, safest solution that will work. Often that means staying with the status quo or doing the job themselves. To be successful, you need to understand all ways in which you represent risk and develop preemptive messages and actions to overcome that barrier. Spend some time figuring out the specific ways in which your company, products and services represent risk. Then invest in brief, tangible, specific materials to use during the sales process to allay their fears.
Make it Easy.
It’s not enough to claim you’re nimble because you’re smaller. Be certain that it’s true! Find ways to demonstrate agility throughout the sales process. Make it incredibly easy for a big company to do business with you. Become expert in anticipating needs before they are expressed. Invest in a sales team steeped in business process analysis and strategic outcomes who speak language of your buyers. Guide the multiple buyers and influencers through their process and do most of the work for them. Invest in refining and documenting your own processes to reduce friction.
It’s harder than ever for smaller companies to win large account business, yet it remains the best and fastest way to grow. Now is the time to invest in a new, comprehensive large account sales and delivery strategy.
This article originally appeared in Top Sales Magazine, December 2020. Access it here.
