Incumbent advantage – is that a thing?

We attended a bidders’ event recently where a provider challenged the commissioner a number of times on incumbent advantage – suggesting that that the nature of the specification and the questions asked of bidders unfairly favoured incumbent operators.

Our experience suggests that incumbency is just as tough. It’s just that the nature of the sales challenge is different.

Our work, across different markets and responding to the requirements of a range commissioners, often focuses on helping organisations to address the following ‘five challenges of incumbency’:

1) Complacency – the belief that no other organisation could run the contract/service as well.

2) Assumed knowledge – both of the operational realities of running a contract/service and also the operating assumptions that drive a commercial model.

3) Authenticity – speaking with a coherent voice that reflects the nature of the relationship and service delivered.

4) Focus – ensuring that commissioner intentions (rather than ‘what they really want is…’) are prioritised.

5) The ‘shiny shiny’ – layering in additional innovation, which operational teams may perceive as unnecessary cost.

Yes, a good performing incumbent operator does have some advantages, but a disruptive bid, from a new market entrant, with a compelling alternative offer, clearly articulated, will make commissioners think twice.

Different challenges, different sales strategies, but no difference between the chances of an incumbent and a new bidder winning the business. That’s our opinion.