The High Cost of Winning

Author: 
Gary Summy

If you pursue the deals that make sense, do everything right in the selling and negotiating process, and deliver the promised value to the client, then winning is wonderful. But what happens when one of these three components is neglected? Each has margin erosion and unhappy clients lurking at every step so let’s look closer to understand the potential problems and how to avoid catastrophe.

Pursue the deals that make sense
This demands that you have a qualification process in place to determine if and to what extent you will pursue and opportunity. Unfortunately, without a qualification process everything looks good. A qualification process should look at both the potential to win and the impact of winning. Not every deal is a good deal to win. Sometimes, regardless of product, price or value, you don’t have a chance to win (this is where the potential to win qualification is critical). Chasing a deal with no hope of winning is another issue.

Your qualification process must consider the risks associated with winning. Consider your history with the client and potential project changes or delays that may eat margin, client demands that tie up resources, scope creep without fee adjustment options, specification changes that impact solution performance, late or no payments are just a few that can make winning very costly.  If you don’t have a process, Find one or develop one.

Doing the right things in selling and negotiating
The biggest problem here is that teams don’t see these as part of the total process and fail to recognize you are responding to different client issues. In selling you are responding to the client’s issue of: Why should I buy from you? You shift to a negotiation mindset when the client issue becomes: How will I buy from you? The biggest problem we see is that the seller offers up all the “goodies” answering the first question there is nothing left for negotiation leverage except price/margin related elements. Having a strong negotiation process and approach, knowing what the client wants, needs, and values, combined with unshaking faith in your value are essential to make sure you won’t win the deal and lose the revenue.

Delivering the promised value
Too many sales approaches and salespeople make a sale and move on. While the client must be satisfied, as Net Promoter tells us, they must also be loyal and willing to promote us. If not, we lose not only a continuing revenue opportunity with this client, but a marketplace reputation of “average” or worse performance. Unhappy clients don’t return and often share their feelings/experiences with others. Sustainable and repeatable business is built on excellence, not average. You win a deal and lose a market and that is perhaps the highest cost of all. Solve the right problem, solve it the right way, make sure it stays solved and that reputation will improve long term margins and win rates every time.

Be sure you have a pursuit through delivery qualification process in place and that you use it. Have and use a solid selling and negotiating process and clearly understand is the question why you or how we get it done. Take inventory of your value, the cost to deliver that value, what your client wants / needs, and how they define value. Leverage this understanding in a solid selling/negotiating process. And above all, delivery equal to or greater value than promised and make sure what you deliver solves the customer’s problem and doesn’t just meet the specifications. Do these things and winning is an investment for both buyer and seller that delivers real value.

Gary Summy is the founder and executive director of Move the Needle, LLC, a sales consultancy dedicated to improving your business and your client’s business by creating differentiated value in a commoditized world.