Buyer’s budget is the most common reason stronger sales opportunities fall apart. A better value proposition from a competitor, not matching certain pre-requisites such as certifications and references and many other such reasons lead to lost deals. The fact is we cannot win all deals. However we should not miss out on the opportunity to collect feedback from the customer. Do you respond to lost deals to collect feedback and insights. Use this vendor comparison template to ask customers for feedback. This will help you in competitive benchmarking and prepare well for other deals. This also sends a positive signal to the customer and may help renegotiate the opportunity.
The vendor value comparison helps the customer make an objective decision to select the best vendor.
How to use the vendor comparison template?
- The first step is to identify the parameters for vendor comparison. Using 3 to 5 important parameters is recommended. The template lets you compare vendors for up to 10 parameters.
- List the parameters for comparison in the first column
- Rate each parameters for priority – High, Medium or Low based on how important it is for the business and the outcome of the proposed service
- Write the names of vendors or suppliers selected for value comparison. It is best to compare 3 to 5 vendors or suppliers for best results
- Next step is to rank each vendor for all parameters in ascending order. Rate the best vendor for the respective parameter as 1, 2 for the second best and so on. If you are comparing 5 vendors, the vendor or supplier with the least rating for a parameter will be rated 5
- Based on the priorities and vendor rankings, the template will display an overall value score for each vendor
- The vendor with the lowest score should be the best choice based on the parameters selected for comparison
In the example in Figure 1, five vendors have been compared for providing digital marketing services. They have been ranked for the following parameters:
- Retainer fee for content creation and posting (Priority – Low)
- Relevant experience – industry, similar clients (Priority – Medium)
- Commitment to KPIs – impact on billing (Priority – High)
- Certifications – company, team (Priority – Low)
- Marketing and workflow automation capabilities (Priority – High)
After comparing five vendors for the selected parameters, Vendor 3 has the lowest score of 1.60. Hence, the service contract should be awarded to vendor 3.
How to follow up on lost deals?
You could use this value score template for lost deals as well for deals where there is no response from the customer after submitting the proposal.
Send an email to the customer with the vendor comparison template. Suggest three to four parameters that you consider important. Select parameters where you would rank well. This exercise will help you assess your value proposition while following up with the customer. Request the customer to add or change parameters based on their business objectives and expected outcomes from the service agreement.
Inform the customer that this exercise is a part of your sales process to collect feedback from all your customers. Your company values feedback from customers and uses it to improve your services and value proposition.
It is best to call and check with the customer once you send the email. Guide them on how to use the value scorecard to rank shortlisted vendors and suppliers.
Vendor comparison serves as a good reality check as you get feedback from customers to understand why a certain competitor was awarded the deal ahead of you. It also provides information on what parameters are most important for you customer. You could use the information and competitive benchmarking to improve your value score. This prepares you well for future sales opportunities.
You could use the vendor comparison template as a buyer as well to rank selected service providers and suppliers. The process brings transparency to the overall buying process.
If you have any suggestions, please contact us or share your views in the comments section.