In the competitive world of procurement bidding, diverse suppliers must find ways to differentiate themselves and showcase their unique value proposition to win contracts with large corporations. One essential tool for achieving this goal is a well-crafted capability statement. This capability statement acts as a resume for your business, highlighting your company’s strengths, expertise, and experience in a concise and compelling format.
In our previous blog post, “How to Sell to Large and Enterprise Businesses Using This Step-by-Step Process,” we discussed strategies for navigating the complex procurement process and building relationships with decision-makers in large organizations. Now, we’ll explore how a capability statement can complement those strategies and help diverse suppliers stand out in the crowded marketplace. By developing a strong capability statement, diverse suppliers can secure a competitive edge in the marketplace.
In this article, we’ll explore the importance of capability statements for diverse suppliers, discuss how to create an effective one, and share tips on leveraging your capability statement to win contracts with large corporations.
What is a Capability Statement?
A capability statement is a concise, comprehensive document that serves as a professional representation of your business. It provides a company overview and showcases your strengths, expertise, certifications, and past performance, providing a snapshot of what your business has to offer.
The primary purpose of a capability statement is to help diverse suppliers stand out in the competitive landscape and win contracts with large corporations. It also serves as a marketing tool to communicate your company’s unique value proposition and demonstrate your commitment to supplier diversity. By presenting a well-designed and compelling capability statement, diverse suppliers can effectively position themselves as reliable and qualified partners for corporations seeking to diversify their supply chain.
For example, an effective capability statement from a diverse supplier might include:
- A bold and eye-catching design that aligns with the company’s brand identity, making it memorable and visually appealing.
- A clear description of the supplier’s unique offerings and expertise, backed by relevant certifications, awards, and past performance highlights.
- A brief highlighting of the company’s Diversity, Equity, and Inclusion (DEI), supplier diversity, and/or environmental sustainability practices that may align with a prospective client organization’s goals in those areas. (Most corporations count their suppliers’ positive impact towards meeting their own organizational targets.)
- Testimonials from satisfied clients or partners, adding credibility and social proof to the supplier’s claims.
By incorporating these elements, diverse suppliers can create a powerful capability statement that captures the attention of procurement teams and decision-makers, increasing their chances of winning contracts with large corporations.
Common Capability Statement Mistakes Costing You Buyers
You might be thinking, “we already have our capability statement done, I’ll skip this article,” but there is always room for improvement. So before you send it off to the next potential buyer, we want to make sure you’re not making one of these mistakes in yours:
- Lack of proper preparation: Just as rushing into a negotiation without thorough preparation can be detrimental–not investing enough time and effort into creating a well-crafted capability statement may lead to a less effective document, causing diverse suppliers to lose potential clients. It is essential to take the time to research and understand the requirements and preferences of the target audience to create a compelling capability statement.
- Inconsistency in metrics and key performance indicators (KPIs): In vendor evaluation systems, inconsistent use of agreed-upon KPIs and metrics is a common mistake according to this article in Xometry. To create an effective capability statement, diverse suppliers should consistently use relevant and accurate metrics and KPIs to showcase their past performance and success.
- Poor design and presentation: The visual appeal and readability of a capability statement play a crucial role in making a strong impression on potential clients. Diverse suppliers should focus on creating a visually appealing document with a clear layout, appropriate fonts, and colors that align with their brand identity.
- Lack of customization: As mentioned in this article from Indeed, it is essential to define metrics based on the most important criteria for the business. Diverse suppliers should tailor their capability statements to specific prospects or industries, aligning their offerings and strengths with the prospect’s commitments and requirements.
By avoiding these potential mistakes, diverse suppliers can create a powerful capability statement that can help them win contracts with large corporations.
Developing Your Capability Statement
In this section, we will discuss the key elements that should be included in a capability statement and provide tips on effectively highlighting your strengths and unique value proposition. Additionally, we will explain how to tailor your capability statement to specific prospects or industries.
Key Elements of a Capability Statement:
- Company Overview: Clearly present your company’s name, logo, contact details, and a brief overview of your organization’s mission and values. This information sets the foundation for the rest of the capability statement.
- Services and Products Offered: Provide a concise but comprehensive list of the services and products you offer, emphasizing the ones most relevant to the target audience or industry.
- Past Performance: Showcase your company’s past performance by including specific examples of successful projects, satisfied clients, or case studies that demonstrate your expertise in your industry.
- Diversity Certifications: Highlight any diversity certifications, such as Minority Business Enterprise (MBE) or Women’s Business Enterprise (WBE), to make clear that your business may align with the goals for supplier diversity a prospective client company may have set.
Tips for Highlighting Strengths and Unique Value Proposition:
In the previous blog post in this series on How to Sell to Large Enterprise Businesses, we discussed the importance of building value propositions for effectively marketing your products or services. A value proposition communicates how your product or service will benefit your customer, outlining its importance for your target segment, how it will solve their pain points, and why your product is more desirable than others on the market.
We emphasized the need to understand your customers and their needs before creating your value proposition, as it helps you tailor your offering to their preferences and pain points. A strong value proposition is essential for maintaining customer relationships, promoting brand awareness, and increasing sales according to Indeed.
By focusing on the unique aspects of your products or services, you can create a compelling value proposition that sets you apart from the competition and resonates with your target audience. The previous blog post provided valuable insights and actionable tips on creating and leveraging your value proposition to successfully sell to large enterprise businesses.
With this foundation in place, we can now explore 3 strategies for effectively showcasing your company’s offerings and differentiators.
- Focus on your core competencies: Emphasize your company’s most relevant skills and expertise, showcasing how they set you apart from your competitors .
- Use metrics and testimonials: Include quantifiable metrics, such as success rates, client satisfaction scores, or project completion times, to support your claims. Testimonials from satisfied clients can further validate your strengths.
- Align with the prospect’s needs: Identify the specific needs and preferences of your target audience and align your strengths with those needs to create a strong connection.
Tailoring Your Capability Statement:
We already shared earlier that it’s important to tailor your capability statement to the company you’re targeting, but here are 3 ways to do it:
- Research your target audience: Investigate the prospect’s industry, preferences, and commitments to areas such as diversity, social impact, and environmental practices. This information will help you align your capability statement with their expectations and values.
- Customize your content: Modify your capability statement to focus on the products, services, and strengths most relevant to the specific prospect or industry. Highlight your diversity certifications, supplier diversity practices, social impact initiatives, and environmental practices to demonstrate how they align with the prospect’s commitments in those areas.
- Use industry-specific language and examples: Utilize terminology and examples relevant to the target industry to demonstrate your understanding and experience within that sector.
By following these guidelines, you can develop a compelling and tailored capability statement that effectively communicates your company’s strengths and unique value proposition, increasing your chances of winning contracts with large corporations.
Designing Your Capability Statement
In this section, we’ll discuss the process of designing an effective capability statement, which is crucial for showcasing your business’s strengths and unique offerings to potential clients.
Create a template: Start by preparing a capability statement template that includes essential sections like company overview, core capabilities, team overview, projects/past jobs, relevant certifications, and contact information. Use these headings to keep your content organized and ensure that you cover all necessary topics. The US Department of Health & Human Services has a sample capability statement on their website.
Use relevant visuals: Incorporate visuals that enhance your capability statement and help it stand out professionally. Use authentic photographs, images, and graphics to present your business as a genuine and reliable option for potential clients. Spark shows multiple examples of capability statement designs here.
Highlight major relevant experiences or clients: In the experience section, emphasize your most recent and significant accomplishments, ideally from the past three years. Focus on clients or projects similar to the ones you’re targeting to demonstrate your expertise and suitability.
Customize for each prospect: Tailor your capability statement to specific prospects or industries by highlighting your relevant experience, qualifications, and certifications that match their needs and priorities.
Ensure readability: Use clear and concise language throughout your capability statement. Avoid jargon and focus on delivering information that is easy to understand and digest.
Design the document: Pay attention to the visual design of your capability statement. Make sure it is clean, professional, and visually appealing. If you lack the internal skills to create a high-quality document, consider engaging an external supplier to help with design and layout.
Review and refine: Carefully proofread and revise your capability statement to ensure it is error-free and presents your business in the best possible light.
By following these steps, you can create a visually appealing and informative capability statement that effectively communicates your business’s strengths and unique offerings to potential clients.
Using Your Capability Statement
In this section, we’ll discuss how to effectively use your capability statement to win contracts with large corporations and different ways to utilize it in various business settings.
- Responding to RFPs:
When responding to Request for Proposals (RFPs), use your capability statement to showcase your business’s strengths, expertise, and qualifications. Tailor the content to address the client’s specific needs and requirements, demonstrating your understanding of their objectives and how your business can help them achieve those goals .
- Meetings with procurement teams:
Your capability statement is an essential tool when meeting with procurement teams of large corporations. It allows you to present your business in a professional and organized manner, highlighting your core competencies and past performance. Be prepared to discuss the contents of your capability statement and provide additional details about your business’s experience and offerings as needed.
Procurement teams may ask diverse suppliers various questions to evaluate their suitability for a specific project or contract. Some typical questions include:
- Company background: Can you provide an overview of your company, including its history, size, and ownership structure?
- Diversity status: What is your company’s diversity status, and can you provide any certifications to support your claims?
- Core competencies: What are your company’s core competencies, and how do they align with our organization’s needs?
- Past performance: Can you share examples of past projects or clients that demonstrate your company’s experience and expertise in our industry or related fields?
- Quality assurance: What quality assurance processes and certifications does your company have in place to ensure high-quality products or services?
- Capacity and scalability: What is your company’s capacity to handle the scope of the project or contract, and how can you scale up if needed?
- Supply chain: Can you provide information about your supply chain, including any partnerships with other diverse suppliers and your sourcing strategies?
- Innovation and technology: How does your company stay up-to-date with the latest industry trends, innovations, and technologies?
- Sustainability and social responsibility: Can you share your company’s approach to sustainability and corporate social responsibility, including any initiatives or policies in place?
- Pricing and value proposition: How does your pricing structure align with the value you provide, and how do your offerings compare to other suppliers in the market?
- Contract terms and conditions: Are there any specific contract terms or conditions that your company requires or prefers to work with?
- Financial stability: Can you provide financial statements or other documentation to demonstrate your company’s financial stability and ability to fulfill contractual obligations?
By preparing thoughtful and thorough responses to these typical questions, diverse suppliers can demonstrate their capabilities and commitment to delivering value to the procurement team and the organization as a whole.
Something we think will be helpful for you to get comfortable with using your capability statement and responding to potential questions that may arise even after you provide your statement is to give you a list of potential questions a company may ask you.
After a diverse supplier shares their capability statement with a prospect, several steps may follow, depending on the prospect’s interest and the supplier’s qualifications. Here’s an overview of the process:
- Review of the capability statement: The prospect’s procurement team or decision-makers will review the supplier’s capability statement to determine if their offerings align with the organization’s needs and requirements.
- Request for additional information: If the prospect is interested in learning more, they may ask the supplier to provide additional information, such as detailed project proposals, case studies, or references from previous clients.
- Request for proposal (RFP) or invitation to bid: If the prospect believes the supplier could be a good fit for a specific project or contract, they may invite them to participate in a formal RFP process or submit a bid for the project.
- Bid or proposal evaluation: The prospect will evaluate the supplier’s proposal or bid, along with those from other suppliers, to determine the best fit based on factors such as price, quality, experience, and diversity status.
- Interviews or presentations: The prospect may invite shortlisted suppliers to participate in interviews or presentations to further discuss their offerings and answer any additional questions.
- Contract negotiation: If the supplier is selected as the winning bidder, they will enter into contract negotiations with the prospect to finalize the terms and conditions of the agreement.
- Awarding the contract: Once negotiations are complete, the prospect will formally award the contract to the supplier, and both parties will sign the necessary documentation.
During this process, suppliers should be proactive in following up with the prospect to express their continued interest and to address any concerns or questions that may arise. This may include sending emails, making phone calls, or even scheduling in-person meetings to maintain open lines of communication.
Suppliers should also be prepared for the possibility that they may not be selected for a particular opportunity. In such cases, they can still use the experience to refine their capability statement and approach for future prospects, and they may ask for feedback from the prospect to identify areas for improvement.
- Networking events and industry conferences:
Use your capability statement as a marketing tool during networking events and industry conferences. Distribute it to potential clients and partners, showcasing your business’s unique capabilities and generating interest in your products or services.
- Company website and social media:
Post your capability statement on your company’s website and social media platforms to increase visibility and reach a broader audience. Ensure that it is easily accessible to potential clients who are researching your business online.
- Customizing for specific industries or clients:
Tailor your capability statement to target specific industries or clients by emphasizing your expertise and qualifications that are most relevant to their needs . This targeted approach will demonstrate your understanding of their challenges and showcase your ability to provide solutions.
Tips for following up with prospects:
So you’ve shared the capability statement and
Timely follow-up: Reach out to prospects shortly after sharing your capability statement. This prompt follow-up shows your enthusiasm and commitment to addressing their needs.
Address any questions or concerns: Be prepared to answer any questions or address concerns that prospects may have after reviewing your capability statement. Provide additional information or clarify any points that may be unclear.
Stay engaged: Maintain regular communication with prospects, even after the initial follow-up. Keep them informed about any relevant developments in your business, such as new projects, partnerships, or certifications that may strengthen your value proposition.
Seek feedback: Request feedback from prospects on your capability statement and use their insights to improve your document and better align it with the needs of your target audience.
By effectively using your capability statement in various business settings and consistently following up with prospects, you can increase your chances of winning contracts with large corporations and establish long-lasting business relationships.
In the next blog post of this series, we will dive deep into understanding the role of certifications for diverse suppliers. We will explore various types of certifications, their benefits, and how they can help diverse suppliers stand out and win contracts with large corporations. We will also discuss the process of getting certified, leveraging your certification, and provide additional resources to support diverse suppliers in their certification journey.
Here’s a sneak peek of what’s coming:
- The importance of certifications for diverse suppliers
- Overview of certifications and their benefits
- The process of getting certified and maintaining certification
- Leveraging your certification to win contracts
- Additional resources and networking opportunities
Don’t miss the valuable insights in this upcoming post, as we help you navigate the world of certifications and make the most of your diverse supplier status.
Also, don’t forget to join our upcoming panel event, where we will bring together industry experts and successful diverse suppliers to discuss their experiences, share tips, and answer your questions about supplier diversity, certifications, and winning contracts with large corporations. This is an excellent opportunity to learn, network, and boost your business. Stay tuned for more information on the event date, time, and registration details!