CUSTOMER ANALYSIS

The purpose of the Customer Analysis is to identify and quantify your customer’s needs, characteristics, and probable behavior in order to estimate how he/she may decide the winner. It should include the following subjects.

• What is the ultimate user profile?

Identify the user’s real need or desire compared to his stated need or desire.  What is his/her price expectations (realistic or optimistic) and ability or willingness to buy (he may know that he needs a Cadillac but if he can only afford a Chevy, don’t try to sell him a Cadillac). What is his/her image of you and your products? What is the probability of your influence by itself or do you need teammates to enhance your viability? Are the specific requirements for your product design stable or are they likely to change — is your customer enamored by new, advancing technology or does he prefer less risky, proven technology? Remember that your customer will interpret new or innovation and risk.

• What is the profile of the immediate customer, if different from the user?


Sometimes the DoD agency making the bid decision is not the same as the agency that will be actually utilizing the product. Identify any differences in stated need or desire, price expectations and funding profile, favored contractor or subcontractors, evaluation criteria, images of your weaknesses, deficiencies, or products.  In one RFP to develop radically new micro chips there was the requirement to show how existing weapons systems could be enhanced by this new technology. We had to identify these programs by name. I advised my client to brief those DoD Program Managers on the benefits of our offering. I explained that we could not talk to the procuring agency, but we could talk to the ultimate users. I argued that if I were the Source Selection Authority I would contact those Program Managers during the evaluation and ask what they thought of the new technology. If those Program Managers replied “My program is running just fine, thank you, it ‘ain’t broke and don’t need fixin!’” — then we would be out of luck. My client didn’t seek out the program managers to pre-sell them. We lost. The reason? “There was no interest in the using commands for our approach.”

• What are the key customer factors?

Identify the prime influence factors of the procuring organization, the using organizations/commands, Congress, the Executive Branch, the media, and the international situation.

• What are the programmatic issues and what are the customer’s views of these issues? How can we change these views to our advantage?

Consider developmental issues, cost, risk, performance, reliability, supportability, operations, and systems aspects. Also consider sociopolitical issues such as energy, competing priorities, political/congressional attitudes, public reaction, economic, institutional, and personal aspects of the program.

• Does the customer need help in selling his program to Congress? If so, how can you help him/her? What is it about your program that would be easier for your customer to sell Congress than your competitors’ programs?

Companies seldom think of helping their customer sell its program to its own funding authority. The fact of the matter is that, because of the many programs and organizations fighting for each DoD dollar, programs have to be sold and resold, and are under continuous pressure for their resources. Your customer has had to cut back his staff and travel budget, just as you have, so he can use all the help he can get for various trade studies, presentation materials and presentations, joint papers at symposia, and lobbying. Work with him to see how you can help. Don’t wait for the contract award to implement a cooperative Integrated Product Team environment with your customer. Start early.

• What are customer’s weighting of issues and receptiveness to possible trade-offs?

RFPs virtually never state that price is the most important evaluation factor, but the truth of the matter is that, regardless of what the RFP says about rank weighting, acquisition price is always number one! RFPs would like you to think that Life Cycle Cost is more important than up front acquisition price, but don’t you believe it! I do not believe that the present Administration will spend more of its money so that some future Administration can save money! So given that price is number one, what is number two? And number three? And four? Consider what the product or service will provide and what customer’s problems it will solve. On one proposal for NEXCOM, the FAA’s new digital radio acquisition, the RFP specified a fairly short response time and a short development schedule. Requests for extensions were denied. I went online to the FAA’s website and discovered a speech by FAA Administrator Jane Garvey, extolling the value of NEXCOM because it was essential for initiating the FAA’s Free Flight program Phase II. Phase I was already completed and Phase II was key to relieving airport and airways congestion across the country. It was therefore obvious that those factors affecting successful initiation of Free Flight Phase II were paramount.

• Are there any unresolved customer issues? What are they?


This is a trick question: of course there will be many unresolved issues! Your task will be to discover what they are and how you can help your customer resolve them. Many times the customer formally asks for industry’s help, but even it he doesn’t, you should do your homework and help your customer do his. And remember that the time to spring new ideas on him is not with your proposal—it is before the first RFP draft is released. It will be a fine line between helping your customer before the RFP and “giving away the store,” so be cooperative and helpful, but cautious.

• Who or what is really “running the show?”


An excellent example of the importance of this consideration is the Joint Primary Aircraft Training System (JPATS) of the early 1990s. This major, multibillion aircraft and training system acquisition for USAF and Navy pilot training was managed by the Air Force at Wright-Patterson AFB. The program dragged on for several years as the design and operational requirements were revised over and over. Finally, the Air Force selected two candidates who met the requirements—Lockheed and Cessna. However, for some reason that I did not understand, the Navy was the Source Selection Authority, and the admiral selected the Beech aircraft! The following year was consumed by protests, but in the end, Beech got the multibillion dollar contract.

• List desired “buzz words” and topics as well as undesired “buzz-off word” and topics.

Identify the jargon that your customer wants to see in your proposal, because it shows that you are tuned to his specific language and will be easy to work with. Also, be equally alert to any specific words (or colors, or any other weird predispositions) of your customer. During the long battle to bring an acquisition to the RFP release stage, the players work very hard to sell their program to their many levels of management. To do this, they have to create catch phrases so their decision-makers can distinguish among the many hungry programs clamoring for their attention. Work with them, and assimilate those concepts and terminologies into your story. For example, for a radar proposal to Turkey, we refrained from using any plus (+) symbols, other than in mathematical expressions, because they interpreted it as a Christian symbol that was offensive to a non-Christian country.

• What will it take to win if yours is not the lowest acquisition price offered?

In spite of the objective (OK, there is also a good deal of subjectivity) structure of the Source Selection Evaluation Board (SSEB) scoring, in the final analysis, the SSA will make his/her final decision under enormous pressures—that increases exponentially as the dollar value of the contract increases—from the users themselves, from Congress, from the localities affected by the decision, and by the White House. I believe that it all boils down to this: the SSA will make the decision that is safest to his or her career, and that is the decision that he/she can best justify to the losing bidders’ Congressmen. I have never gotten any argument against this admittedly cynical belief from either contractors or government personnel. If yours is not the lowest-priced offering (and you can never be certain that it will be) you have to offer something that no one else offers, that is very important to your customer, and that you can convince him in your proposal that you can and will deliver.

• What will win the contract?

You need to identify what, specifically, it will take to win the contract, and explain that clearly and concisely in the front of your Executive Summary and re-emphasize it through out your proposal. You should be able to identify this by your customer contacts long before the RFP is released. Closely review your customer’s speeches, and those of the people and organizations who can influence the decision. On one acquisition for an automated test system to replace the inadequate avionic test and checkout systems for the B-1B Lancer bomber, we knew that the fleet had only a 50% operational availability because of the problems with the existing systems. Our theme was not “We have the best Automated system and the best team.” Our top-level theme, across the top of the first page of the Executive Summary was: “Our goal—dramatically improved B 1B fleet operational availability!” An excellent example of a Source Selection Authority’s justification is from (then Secretary of Defense) Dick Cheney’s letter to Senator C.S. Bond, dated 07-29-91, regarding selection of the F/A-18E/F over the F-14:

“In selecting the F/A-18E/F, we considered not only performance and unit price, but also a host of other factors which impact on cost, such as weapon system reliability, maintainability, safety, maintenance costs, squadron manning requirements and cost per flight hour.

“In the final analysis the F/A-18E/F was the clear choice over the F-14. It is three times more reliable, twice as easy to maintain, has a safety record which is fifty percent better, requires about twenty-five percent fewer maintenance personnel, and costs about twenty-five percent less to operate per flight hour. When combined, these factors clearly show that the F/A-18E/F is the more cost effective aircraft.”

In Part 4 of this series we will provide guidelines on preparing the Competitor Analysis. In Part 5 we will provide guidelines on preparing your Self Analysis, and in Part 6 we will provide guidelines on developing presentation of your business, offering, political, marketing, and pricing strategies and your Action and Commitment documents.