The Best Deal We Never Did
I was queasy. Yes, I was physically ill.
(I know. You’re thinking, “thanks for sharing, Bill!” But please read on.)
So when was this? This was my state of mind years ago, not long after ECS got off the ground, and long before we had worked with companies across a diverse 26 industries (and counting). Our team at the time was determining next steps for a new client.
And why did I feel this way? There’s a simple explanation for this. I’m just not built to walk away from a done deal, especially when we have been working hard with a new client to identify opportunities to make positive business changes and increase profitability within a company. But that is exactly what we were going to do – walk away.
Part of the reason for my strong feelings was this was no average client contract, but easily was one of the biggest deals we had seen in our young existence. Yet we knew in our gut this just wasn’t going to work.
Let me explain.
As we do with many of our new clients, we first completed a Fresh Eyes assessment and thoroughly looked behind the scenes and determined the root cause of the problems the business was experiencing. It was clear right away that there were issues across both operations and sales that needed to be fixed so the company could achieve its lofty goals. And these, thankfully, were issues that could be fixed in a straightforward way.
But even more glaring was the problem in this large company’s leadership. You see, this company was run by a father and son who didn’t get along. But that is an understatement. The two of them could barely stand to be in the same room together, and the pair didn’t share ANYTHING in common about the company’s vision.
When we presented the review of our assessment to this client, we pointed out that many of the company’s problematic issues stemmed from the inability of the pair to work together. This finding then led to a father-son argument – and soon everything unraveled even further so that the only thing the two agreed on was to have ECS come in and fix the problems we outlined.
Later that day my partners and I debriefed and reviewed the client meeting. It became abundantly clear that no matter what we did, we weren’t going to help the duo mend the broken fences between them, and that ultimately our engagement wouldn’t be successful either for us or for the client.
We turned the opportunity down.
While the day was not easy, that decision turned out to be one of the best we’ve ever made. A few months after we turned down the engagement, the client company defaulted on loans and filed for bankruptcy, leaving many vendors holding the (empty) bag. As it turned out, their cash situation was much worse than they lead us to believe.
Great lesson learned: trust your gut.
What else did we learn from this particular situation? And what are some tips we can share on how to correctly identify not only the deals you should pursue, but importantly those to walk from?
Our three takeaways:
Understand your Ideal Client Profile – Honestly answer the questions: who are your best customers? What traits do they share? With these answers you can identify what “ideal” looks like – and more importantly determine when a new prospect is too far away from that ideal client profile. If this is the case, they may not be worth pursuing.
Build a Go/No Go Matrix – Once you have developed the list of traits that make a good client for you, put them into a matrix and build a scoring system. Big deals have a way of warping our sense of reality and causing us to loosen our standards, so this quantified tool is helpful in making sure our emotions don’t get the better of us. Calculate a score that means “Go”, with a cutoff that indicated “No”.
(And then STICK TO IT.)
Get comfortable with letting a deal go – If you’re like me, this is hard to do. Perhaps really hard to do. But there is a cost for chasing down every deal. You have limited resources – so you’d better spend your time wisely in who you target.
Since the time of this story, we’ve added lots more experience to our arsenal, and I can tell you at times we still do choose to walk away from a potential client and a “done deal”. This decision is never easy, but it does become easier over time as you start to understand and see the hefty cost you would pay to take on a client outside of your target profile. I can tell you, I am a true believer.
Struggling whether to do a specific deal or not? Not sure what your ideal client profile looks like?
Give us a call and we’d be happy to talk to you and walk you through it and share more of our insight. Bill Morrow – Managing Partner – firstname.lastname@example.org 610-310-6707.