Since Donald Glade has been tackling vendor management, an article in “the CEO Refresher” ((McLaughlin, Michael W. “When to Walk Away From a Sale: Nine Pivotal Questions.” Retrieved from www.refresher.com on May 21, 2006.)) caught my eye when I noticed some pointers on when a vendor should disengage with a prospect. Check out the article link above to see the original author’s point of view.
- Can the client clearly articulate the objectives and anticipated benefits of the project? As I’ve mentioned when talking about implementations, the success of the project is often not determined by the vendor. If the client really has not developed and articulated a detailed vision of what they want, chances are that they don’t really have a detailed vision. Without this, the project should be delayed – smart vendors will see and do this.
- Is the project funded? Sounds like a silly question? Sometimes you’re dealing with slush funds – if a VP has an extra $50K to spend on a benefits project, go for it. However, if you’re looking at implementing SAP HR, aks to see of the budget has been approved first.
- What consultant-selection process is in place? Is there anything worse for a vendor than to invest many hours in a project they have no chance of winning? Often incumbants with established relationships are either brought in to bid, but have such a poor reputation they have no chance, or non-incumbants are bidding and can’t unseat an incumbant who has excellent service. Many purchasing departments will drive multi-vendor searches even though the selection has unofficially already taken place. If you are a vendor, have a discussion with the prospect – often they will be up-front, and if you (as a vendor) can show partnership early in the bid process, you might walk away with the door open just a crack.
- Who is really calling the shots? This is actually a multi-layered question. First and foremost, are you as a vendor talking to the right person? Has a VP requested a search, and you’re stuck talking to the project manager or director left in charge? If so, getting to the real buyer to understand the strategic rationale for the change is critical. You’ll want to sell to their desires, not the perceived desires of the director or project manager left in charge.
- Is an incumbent consultant bidding on the project? As an addition to #4, often the incumbant or one of your competitors is not only biding on the project, but they actually wrote the RFP. If they were smart, they wrote it so they would look great and you would look like an amateur. It’s also possible that they as incumbants have done more due diligence about the project than you have, giving them an unfair advantage.
- Can your firm really deliver the benefits? This seems obvious, but the art of walking away to maintain future opportunities, or walking away having uncovered a different opportunity you can deliver on is important to learn. If your service or product is “crap” they’ll never use you again. Oftentimes, this first project is just to test the waters before spending the real money. Keep the door open for the real money, even if it means walking away temporarily.
- What are the opportunity costs? Sometimes you just don’t have time – either to bid, or to eventually do the work. If you could be spending your time on a highly probably deal worth ten times more, weigh your decisions and spend the time where it has the probablility of greatest returns. Also, if you have a paying client now, don’t sacrifice the quality of that work to bid on something you may not get.
The art of walking away from a deal is often incredibly difficult. As salespeople, we often want to see every oportunity optomistically. Tactically, this is efficient and may be unproductive. While sales is more of an art than a science, evaluating probabilities of sales is also a qualitative art. Listenting to the buyers and understanding the signals thet tell you if you are a real contender, or just a bidder they need at the table will keep you from wasting time in the long run.
