Walking away from a bad deal is tough. Too often, we don’t have the courage to do this–the pressure for revenue is so high that we get ourselves into situations that are bad.
One of my clients just did this. We had been talking about a specific opportunity. They were really struggling with the customer. Early in the sales process, they were concerned about the customer and their ability to meet the customer’s expectations for the project. Through the customer buying process, they kept trying to address the critical success issues with the customer.
While the customer kept nodding their heads in the right direction, the ways they were responding, the glossing over of critical issues, the missed meetings, all contributed to an increasing level of discomfort with my client. We had a number of discussions about what to do–should they walk away, should they continue to try to catch the customer’s attention on these issues?
We talked about issues like, “Is this an order you really want to win, can you be successful in meeting the customer expectations if you win it?” “If the project is fails to achieve the customer objectives, what are the consequences to the customer and to us?” “Can we manage a successful outcome to this project? How can we get the customer aligned for success?”
There were a lot of tough questions. Underlying all of this was the revenue was very important to my client. While it wasn’t a big project, they really wanted and needed the revenue. Disqualifying and walking away would be painful.
They continued through the sales cycle, they kept trying to get the customer to recognize what needed to be done to create the outcomes they expected–that my client was dependent on the customer executing certain things well in order to achieve results.
The customer CEO finally selected my client as the partner the for the project. But my client was still very uncomfortable–the CEO was ignoring or giving lip service to the issues my client had identified. In their final negotiations, they started seeing more signs the customer either didn’t recognized the critical things they needed to do or was not committed to doing those things. But the CEO kept wanting to go forward–glossing over all the issues my client had raised.
Last night my client called a stop to things. They had a discussion with the customer and sent a very polite but firm note to the CEO. They thanked him for the opportunity, but expressed concern about the ability to produce the results he expected. In concluding, they declined the order.
Walking away is always tough. Ideally, we disqualify bad opportunities early in the sales cycle. But sometimes it’s impossible to tell until the end of the sales process. Walking away when you have won is very painful. Your and your customer expectations are built to a certain level that it’s very difficult to stop moving forward.
But if you know that you can’t meet the customer expectations, that the project will not achieve the goals, that it will be bad business for you; it’s critical that you do walk away.
Not all revenue is good revenue. Some deals can be terribly bad–you disappoint customers, your reputation is impacted, the deal can be very unprofitable.
Walking away takes courage.
Look at your pipeline–are there deals that will be the wrong one’s for your company? Should you be walking away from some of your opportunities?
A sobering article and a theme that is close to my heart. Walking away when you’ve won is painful but as you pointed out there were manifold signs that there was something very awry with the customer’s expectations vis a vis your clients ability to deliver.
Presales qualification is really about avoiding this type of situation isn’t it? I reckon that (correctly) qualifying out of a big deal is the hardest skill to learn and is often learned the hard way unfortunately.
Great comment Roz. Clearly, the best place to walk away in in the qualifcation/disqualifcation process. One of the criteria I see missing in most qualification criteria is “Is this good business/the right business for us?” Ideally, we want to lose fast.
Having said that, there are those times when you get to the end–doing everything you can to reshape the deal, and the right thing to do is walk away—it’s tough, and takes tremendous courage. Thanks for the comment and joining the conversation. Regards, Dave
Dave, your post was an enjoyable read. I’d like to extrapolate your client’s experience with their customer to one that many individuals experience with their employers.
My most recent job was one where the management had an initiative they were rolling out and didn’t demonstrated the slightest interest in planning the roll-out in detail. An NPI project is complex with many factors affecting its success. I had drafted a plan identifying key factors, schedules, dependencies & the critical path. All I got were heads nodding with no action to follow up. Various sub-projects required test plans to qualify new equipment being deployed at the site. My detailed drafts were received with the same level of enthusiasm as before. There was no follow-up.
I was faced with the same circumstance as your client: my customer (employer) doesn’t understand their role and responsibility in the success of their project, but I need the income. What to do? I am lucky enough that I was able to walk away. I didn’t want to be a part of a project setup for failure and work for a dysfunctional team. Not many have that choice and labor through as they compromise their spirits in the process.
Jobs will come & go. There is only one pass through this life. You must maximize your long term wealth & richness of experience at the cost of short-term uncertainty.
Cheers,
Shrikant Kalegaonkar
twitter: shrikale
Shirkant: Thanks for the thoughtful observation. As you point out, the underlying issues apply to more than closing a deal. Sometimes, we are asked to do things (by employers, customers, etc.) that are wrong–we have to have the courage to walk away. Sometimes, we just can’t align ourselves with our employers (right or wrong), and we are a bad fit–but we don’t walk away–until they show us the door. Sometimes our employers won’t or can’t provide us what’s necessary to be successful.
We’re faced with these decisions every day. Too often, we choose not to confront the decision and we waste our lives doing things for which we have no excitement or passion. It’s better to walk toward your passions, to walk toward what energizes you, to walk toward that to which you can contribute, to walk toward the opportunity to make a difference.
Thanks for the thoughtful comment. Regards Dave
Excellent article David,
In essence this is, like many issues in sales, a short-term vs long-term debate. The problem is that the way sales people are compensated generally encourages short-term thinking. He or she is focused on monthly targets/commission and takes decisions based on that, even when it’s not always in the best (long-term) interest of the company or brand.
How do you think companies can eliminate this discrepancy?
Would love to read your opinion on this,
Wim
Wim, it’s always a pleasure to see your comments here. I tend to agree that too many sales managers and people tend to think only of revenue and getting the next order, regardless of whether it’s good or bad.
However, I’m not sure it’s a compensation issue. There are very few organizations that, as a part of the qualification process, assess whether this is a good opportunity for the company. Most of our criteria focus on customer need, funding, access to decsionmakers, product fit. I have seen very few that look at whether this customer is a fit, whether we can be profitable if we win, etc.
I think the issue starts with qualification, then continues through the sales process. It takes leadership from management to help sales people to assess opportunities and whether we should pursue or walk away.
But then–if you don’t have a sales process, or don’t follow what you have in place, you never even assess this—–but the absence of a sales process is an even more fundamental problem……too little space here.
Thanks for the comment/question. What do you think? Regards, Dave
I don’t have a problem walking away IF I have positioned my product correctly, priced it correctly, and am met with unreasonable objections. “If you just lower your price this much”, or “If you just tie a dollar to every part”.
Sometimes you really DO get what you pay for, but our customers forget that.
So I think it is essential when you DO walk away that you frame it correctly by telling them, “I’m afraid our business model does not allow that”, or “we will have to agree to disagree”, but to also let them know that they are not burning bridges, and if their decision to go another direction than with us turns out to yield less than positive results, we will be glad to rush in and save the day, and more than capable of doing so.
John: This is a really powerful observation. It’s critical to explain to your customers why you are walking away. It sometimes causes them to rethink what they are doing, often opening up the opportunity to compete on a different, more fair basis. At the very least, it provides the customer a good understanding and enables you to compete more fairly for future opportunities.
Thanks for the reminder!