Must Read Summaries - Bag the Elephant - Steve Kaplan

Develop the right big business mind-set

Selling to big businesses makes good sense for a business, whether it is a mom-and-pop operation or a multinational. The key benefits in doing this are:

1. You can grow your own business in sync with your big clients because youll be able to ramp up your operational base in order to attract, keep and leverage those clients.
2. Youll even out your cash flow because your revenues will be derived from long-term relationships rather than one-off retail transactions.
3. Youll have more options when it comes time to sell your business because youll be able to sell it with a retained client base and guaranteed future business.
4. As you serve more and more big clients, youll find you instill a big-business culture in your own organization because youll acquire the strategic and tactical expertise you need to be able to serve those big customers well.
   

Overall, there are some very compelling reasons why you should deliberately make an effort to sell to large corporations. Its a smart way to grow your business.

It might sound daunting to a small business owner but big corporations actually need the products and services you offer. This is true right across the spectrum of business activities. To cite some examples:

• A small (owner operated) CPA firm which specializes in preparing tax returns decided to get a large corporation as a client. It found many big companies provide tax planning benefits to senior and middle managers, with these services being managed through their employee benefits departments. The small firm put in a solid years work and was able to secure a contract to prepare 225 tax returns per year for the next five years. On the strength of that contract, the firms owner was able to hire three full-time junior CPAs to assist. The small firm has continued to grow as it follows the same approach in securing more big corporations as clients.
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• A real estate agent in New York was showing a house to an executive of a large corporation who was relocating for work when she realized this was a great way to grow her own business. She contacted the human resources and benefits departments of a few multinational corporations offering to help locate new executives when they moved into the area. It was more than a year before she got an opportunity to show what she could do, but when the chance arose she did a great job. On the strength of that one time assignment, she eventually became the authorized real estate agent in her area for one division of a multinational business. As a result, she was able to double her income for the following year, and since then has continued to increase her year-to-year revenue. She is now continuing to approach other big businesses to offer them a similar service.

After youve been together a while after the Elephant has come to depend on your products or services the Elephant may end up needing you more than you need the Elephant.

Steve Kaplan

In order to sell to elephants, youve got to learn how to think like one. There are six keys to getting inside the mind-set of an elephant:

1. One and done Youll only ever get one shot at securing the business of a large corporation. If you dont do what you say youre going to do the first time around, you wont ever get a second chance. Therefore, follow through and dont give your prospective customer any reason to look elsewhere.
   
2. Priority one Your big customer wants to know you value their business. They want special care and attention from a company which also has a number of other clients. Lavish attention on them. Return calls promptly, answer all their questions. Let them knowtheir satisfaction is job one for you.
   
3. Whatever it takes Be flexible. If your big client comes to you with a need which is far removed form your core business, be creative and adjust your business plan on the fly to accommodate them. Remember, if they place a large enough order in advance, youll probably be able to fund your start-up costs so be open to opportunities to expand your offerings by including ideas suggested by big clients.
   
4. Long-term vision Theres a well-known saying which goes: Pigs get fat; hogs get slaughtered. Dont get greedy and try to make a killing on the one transaction. Look at your big customer as a long-term partner and expect to make decent money over the long haul rather than trying to break the bank on your first big score. You dont have to lower your pricing unrealistically, but your big client will have a fair idea whats reasonable and whats not.
   
5. Breath of fresh air Youll probably do your best work if youre having fun so dont be afraid to show it. Most people are solely focused on the dollars of a transaction, so if you have some fun along the way, this will differentiate you pretty clearly. Make certain everyone from the big company who comes into contact with you enjoys themselves.
   
6. Partners Your relationship with a big company must be a two-way street. Think about what you can do to help your client. Look for ways they can save money and do things better. Sure you have to make a profit but do everything you can to help your client. This is the only way youll end up becoming a valued resource to them.

To apply this strategy, you can:

• Put up signs in your office with these six keys.
• Have team meetings where everyone gets the plaudits.
• Pay performance-based compensation packages.
• Have a policy of returning calls from big clients immediately.
• Give quarterly awardsfor big-customer business development.
• Train and certify your employees in big business protocols.
• Teach everyone to look and act the part.

Elephants like to do business with partners who think and act like themselves. Its not that you have to be a giant to play with the giants you just have to show them you know the rules of their game and can play by them. Perception is one of the rules how you are perceived by your client. You may not be a fellow Elephant, but if you can play the part, youre halfway there. When you go to meetings, dress as well as your client.

Steve Kaplan

Large companies have an aura of mystery. It wont be clear to outsiders how decisions get made. You might have a series of meetings with different people from the big company and it still wont be clear what their corporate policies are. To succeed in selling to a large corporation, youll need to learn the lay of the land. Specifically, youll need to know four imperatives:

1. Who actually makes the buying decision because inside every corporation, there are influencers, deal-killers and buyers. When talking with the big corporations people, aks who else is involved in the decision over and over until youre positive you have identified the buyer.
   
2. How to get on the approved vendor list so if the intent is there, a transaction can move forward. Generally you need to ask what their procurement program is and get the required forms. Try and meet with the person who runs this program, ask their goals and then tailor your approach to tie in withtheir objectives. If at all possible, get a champion inside the purchasing department and work closely with them.
   
3. What the companys lingo and quirks are because every company has its own unique set of acronyms, buzzwords and nicknames. Keep your ears open and note what you hear during meetings. Find out the companys preferences. For example, do they like to do a small test marketing program before implementing a national marketing initiative? Is there a preferred or approved format for the marketing test data? What market research firms do they trust? Find out all this information so you can put together a proposal which fits the way they like to work.