4 ways to identify (and get ahead of) a not-so-good deal

If I had a penny for every article I read about how to close a deal or how to engage with a potential customer, I would be a very rich man. Hardly anyone seems to talk about that other necessary skill of a good sales person, which is to walk away from (or at least call out the high risk to everyone up the command chain)a potentially catastrophic deal before you have signed the contract. Especially relevant in a B2B context — SMB or large account.

Its not about deal qualification or stakeholder mapping or POC readiness and other processes most good companies have that help them decide the viability of a deal. It’s about the signs that tell you during your ‘qualified, stakeholder mapped, expensive dinners done’ pursuit that the client and you are both setting yourselves up for failure. Really the worst possible outcome as a sales person. And as a client.

Coming back to those not-so-subtle signs then. What are these 4 signs and how do you identify them?

a) Your client is using your product / service to fix a symptom, not the problem

This is one of the unstated reasons why projects fail. Unstated why? How many times have you heard the vendor being blamed for a project failure? Always. And as a sales person, if you are not probing the reason beyond cliches like cost-reduction or revenue enhancement or vendor rationalization, you are doing yourself and your employer a big disservice. My first question to my client is always ‘Why?’ and unless there was a good answer to that question and subsequent ‘Why’s, I would be wary of qualifying the deal. And customers always value a sales person who is not looking to just meet their revenue quota and move on.

b) Your client is focused on standardization / simplification without understanding why they are the way they are

When cost reduction becomes the primary driver for a program, then its possible for organizations to get a narrow focus to the detriment of everything else. Large organizations and custom processes — especially in functions like say sales / account management are very resistant to standardization. And when push comes to shove, a program that tries to standardize something that impacts the top-line will never get buy-in meaning it is destined to fail. This can be mitigated by making sure that the program sponsor has engaged other stakeholders in their company. If they haven’t, they should be advised to. If that’s not happening, then all the trouble is unlikely to be worth the deal value.

c) The client (or specifically your key stakeholder) is looking to make an impact with the project, but this is not in line with the client company’s declared strategy

This cuts both ways. I know a case where the stakeholder (who was VP at the time) took a gamble on a novel campaign management project and it paid off. He was promoted within a year of the project going live because it got tremendous gains and of course we got great internal referral business as well. In contrast, in another case, an ambitious project involving an innovative mobile enterprise app almost torpedoed the stakeholder’s career. The app never took off, the stakeholder got shunted out to another role (from where she eventually quit) and all the money sunk into it ensured that the vendor also got blacklisted internally as collateral damage (because obviously the stakeholder shifted part of the blame to the vendor as well). As a sales person, it is important to know clearly the risks of such a venture. Go ahead and try to win but know fully well that your client organization may not be as invested in it as they would in a deal that has clear outcomes aligned to the business strategy

d) You are bidding for a me-too project with no specific objective than for someone in the client organization to be able to say me too

This is self-explanatory. Many times competition can make clients embark on programs to serve no other purpose than to inform their shareholders that they too have done something. As a sales person, know fully well that you are getting into a price war because this is a me-too project. You will end up competing on price with someone and eventually it will be about squeezing you dry on your margins and rates. Of all the signs mentioned in this article, this one is certain to put you in a situation where you will find it the hardest to convince your management that this is a risky deal. As a sales person, you should. If not anything, at least to let everyone know that this deal will be low-margin plus lead to limited up-sell or cross-sell opportunities. On the flip side, such deals happen all the time and as a supplier / vendor, it is always a good way to break into an account as well as build capability / expertise.

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