I was waiting for a flight at the airport last week and overheard a group of business executives speaking about the projects that their firm undertakes and how their team is compensated. “Jim keeps bringing in deals that are $30,000, but our target project is over $400,000. It costs us $30,000 in labor just to manage those little projects.” Each business defines “small” or “large” differently. In their case, it seems like they are “winning” projects that they may not want to win.
As an outside observer, it sounds like their business is not setup to effectively handle projects they would consider small in comparison to their ideally-sized projects. Sadly, few businesses exhibit the discipline to define when they should walk away from business. Many companies have a wish list of what makes for a great opportunity. It is equally important to create a list of conditions that make something a bad pursuit. Here are a few of the most overlooked conditions that might indicate a good reason for you to walk away.
In the book Same Side Selling, we identify a series of “adversarial traps” that put the buyer and seller on opposite sides of the table where the relationship is anything but collaborative. Think about times when you were in an adversarial situation with a potential customer. What percentage of the time do they end up being your ideal customer in the long run? When the customer sees you as their adversary instead of their partner, recognize that each moment the adversarial feeling persists, you are further away from a good outcome.
If you decide to walk away, you do not need to be rude. You might say something like, “In our most successful projects, we work side-by-side with our customer. We get the sense that we may have done something to make this situation adversarial, and we’d hate to start something on the wrong foot. So, I think we need to respectfully decline to participate. I hope we can figure out a way to work in true partnership in the future.”
The Blind Bid
When you receive a Request for Proposal out of nowhere and the buyer does not allow you to have any discussions with their team, what percentage of the time to do you end up winning? In most cases, executives tell me they win below 10% of those opportunities. Comparatively, when they get to a deal early, they tell me they win more than 50%.
In movies, before someone gets executed, they give them a cigarette, a blindfold, and ask for a last request. If the other party puts you in a situation where you feel like you are blindfolded, a pack of cigarettes might not be far away. Flying blind does not allow you to work in your best interest, or in the best interest of your client. Invest the time you would have wasted on those unlikely deals in getting to other projects early. Unless you are a bottle of wine, you should not agree to be left in the dark.
Poorly Defined Goals or Objectives
Let’s say you have a conversation with the potential client, and they appear interested in your product or service. You ask them what they are hoping to accomplish, and how they will measure the success going forward. If they cannot or will not answer the question, that should raise a red flag. At some point, someone in the approval process will ask “Why do we need this? What do we hope to accomplish?” If your contact cannot answer your question, they may not be able to answer it during the approval process, either. The absence of a good answer is an indicator of a project that will stall.
Work with your contact to ensure that you can agree on whether this is a good use of your time, or if you should walk away. You can say something like, “I fear that unless you and I can determine the critical need and desired outcome, we might invest time together and fail to get it approved. Since we don’t have a good business case, should we just wait until there is a greater need?” At that point, they’ll either make their case for continuing, or agree the timing is not right.
For the team I overheard in the airport, perhaps there is a reason the one team member keeps selling small deals instead of focusing on their ideal targets. Regardless of the rationale, the best approach is to have a set of criteria to allow team members to evaluate whether or not an opportunity is worth pursuing. We developed the TRUE Fit spreadsheet tool to allow you to set objective criteria and rate each item to provide a visual map of the “fit” for an opportunity. Send me a note on Facebook or a Tweet on Twitter @GrowMyRevenue and we’ll send you the TRUE Fit spreadsheet tool with no strings attached.
It’s Your Turn
When has “winning the wrong deal” backfired on you? Do you think that there is “good business” and “bad business,” or is all revenue good?