If you’re an SME pitching for a major corporate contract, it’s almost guaranteed that you’ll be up against some much bigger and established competition. And that’s exactly why you’re the best ones for the job.
“The bigger the company, the worse service they offer,” says Sean Malone, director of YellowSpanner, a tiny agency that produces conferences and corporate video for some of the biggest companies in the world – including Microsoft, Siemens and NatWest.
“Your tiny team is going to be better than their team. You’re going to work harder and deliver more than them, every single time. They’re never going to commit as much.”
Founded in 2004 with just a handful of staff, the first major client that YellowSpanner won was no less than Microsoft.
“When I reflect on it, we were up against some very big agencies, like Jack Morton, like Imagination,” says Sean. “There were some things that I was confident we could do just as well as them, things like our creativity, the logistics, our actual ability to do the job. But there were other things that we could do because we were small that they couldn’t.”
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Rather than trying to disguise or apologise for their small size, YellowSpanner focussed on turning it into an asset. As a creative agency based outside of London and with lower overheads than the competition, the first and most obvious thing that the team could compete on was price.
“We had a much lower cost base. We went in there and actually said to them, if you want to pay for an expensive London office and a fleet of BMWs, don’t use us. We don’t have those things, so we can keep our costs lower,” explains Sean.
“The second thing we said was, the people who are pitching to you now are the people that will work on your account. The big agencies that are pitching to you, you’re never going to see those people again. Whereas, if you work with us, the Director of the company will personally handle your account, not a junior staff member, which is what you’d have otherwise.”
Plus, says Sean, because the company works with “a federation of freelancers,” many of whom, he says, are among the “best in Britain,” they were able to make promises on quality that stretched far beyond the capabilities of the core team. “Because we don’t try to do everything in house, we can get the very best people in,” he says.
While price might not be something that every SME can compete on, especially if they offer products rather than services, providing an exceptionally high level of customer service and attention to detail is often where small businesses can really add value. What’s more, they often have the flexibility to adapt quickly to the needs of their clients, saying yes first and then making sure they figure out how to get the work done afterwards.
“Like most smaller companies, we found it almost impossible to say no,” says Sean. “If you’re a small company, if you’re honest, you know that you are always pitching beyond your reach. You’re saying, we’ll take this back to the team at the office, but there’s no team back at the office, it’s just you!”
“We thought, if we can’t do it, we’ll partner with someone who can. That became our default,” he adds.
But, while a challenging request shouldn’t necessarily put you off fighting for a contract, a serious disconnect in corporate culture should raise alarm bells. That’s not to say that your potential customers should think just like you (they won’t), but if you get the feeling that they are bullying or disingenuous, or that they want a cheap deal but don’t really like the way you do things, the situation will quickly turn toxic.
“We don’t do business with people we don’t like, or who don’t like us,” agrees Sean. “A sullied relationship is never going to work, no matter what contract you have or what agreement you’ve put in place.
“Once the relationship breaks down, the whole thing comes down like a pack of cards.”
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In addition to power plays, one of the major ways that SMEs can poison a relationship with a big client from the outset is by slashing their rates. While you might be tempted to take a financial hit just this once, in reality, this will be a tough gig and you’ll never recoup the difference. Don’t kid yourself: once you’ve put forward your costs, your client will forever see this as your base rate. They might try to squeeze you even further, but they’ll never offer to pay you more. Don’t work for less than you can afford, even to win a big-name contract.
“We stick rigidly to our rate card. We don’t deal with people who try to hammer us too hard on cost,” says Sean. “Once you go down in price, you can never go up again!”
While it’s easy to be intimidated by the glitz and global presence that a large-scale competitor might offer, the key thing to remember is that, ultimately, the client you’re dealing with isn’t looking for a flashy office to fund. They’re looking for someone who will commit to solving their problem, and to doing it really well. SMEs can often deliver more because they are hungrier for the business, focussed on a smaller pool of clients and free of the internal bureaucracy that often inflates cost and slows productivity. Make this a point of pride, rather than feeling you have to drop your prices or put on a charade.
“You need to have the guts to go for it. Be bold. Be brave,” says Sean. “Most of these big companies, they’ve got a soft underbelly. They’re just not going to fight as hard as you are.”