Is all business good business?
It's always difficult to say "no" to potential business. Let's face it, when times are lean and sales goals are aggressive, it's easy to get desperate and jump at every opportunity...even when it doesn't make strategic sense for your company. Smart sales leaders are strong enough to walk away when needed. But it takes discipline.
The next time you’re asked to create a big proposal or bid on a project, stop and think. Below are some questions you can ask yourself, to ensure that the business will be good business for your company.
1. Do we know that we can do a good job and deliver value?
Making the sale is just the beginning. You can damage your reputation, lose customer confidence and get bad press if you take on work or sell solutions that don’t get results. Make sure you can actually deliver what you’re promising.
2. What are the indirect costs of working with this customer? Do the potential revenues outweigh those costs?
Some customers cost more to do business with than others. Think about those hidden costs before pricing your proposal. For example, a demanding customer that requires lots of hand-holding will add to your cost of sale…and will also cost your company time and resources (dollars) after the sale. It adds up and erodes your margins.
3. What's the opportunity cost of responding? (In other words, what can't we do if we dedicate resources to getting this business?)
We’ve all seen it. Sales teams running around like chickens with their heads cut off, falling all over themselves trying to get a sales presentation ready for a big potential client. After 20 revisions and thousands of hours, it’s ready. But at what cost? Ask yourself, “What could we have done with that time?” How many other sales calls could have been made? How many other proposals could have been written? How much time could you have spent researching other prospects? It’s important to go after the “big fish.” Just make sure you’re aware of what you’re not doing when you make that time investment…and ask yourself whether it’s worth it.
4. Is this a strategic fit with our company’s goals and values?
The promise of money and growth can easily lure a company away from its core values and strategy, leading it to make business it later regrets. Take Google and its decision to sell a censored version of its search engine in the China market (the ultimate big fish customer). Less than two years later, Google co-founder Sergey Brin said he regretted the decision because “on a business level, that decision to censor… was a net negative.” Sacrificing your values and core strategies to make a buck rarely works well in the long run - in sales and in life.
It's always difficult to say "no" to potential business. Let's face it, when times are lean and sales goals are aggressive, it's easy to get desperate and jump at every opportunity...even when it doesn't make strategic sense for your company. Smart sales leaders are strong enough to walk away when needed. But it takes discipline.
The next time you’re asked to create a big proposal or bid on a project, stop and think. Below are some questions you can ask yourself, to ensure that the business will be good business for your company.
1. Do we know that we can do a good job and deliver value?
Making the sale is just the beginning. You can damage your reputation, lose customer confidence and get bad press if you take on work or sell solutions that don’t get results. Make sure you can actually deliver what you’re promising.
2. What are the indirect costs of working with this customer? Do the potential revenues outweigh those costs?
Some customers cost more to do business with than others. Think about those hidden costs before pricing your proposal. For example, a demanding customer that requires lots of hand-holding will add to your cost of sale…and will also cost your company time and resources (dollars) after the sale. It adds up and erodes your margins.
3. What's the opportunity cost of responding? (In other words, what can't we do if we dedicate resources to getting this business?)
We’ve all seen it. Sales teams running around like chickens with their heads cut off, falling all over themselves trying to get a sales presentation ready for a big potential client. After 20 revisions and thousands of hours, it’s ready. But at what cost? Ask yourself, “What could we have done with that time?” How many other sales calls could have been made? How many other proposals could have been written? How much time could you have spent researching other prospects? It’s important to go after the “big fish.” Just make sure you’re aware of what you’re not doing when you make that time investment…and ask yourself whether it’s worth it.
4. Is this a strategic fit with our company’s goals and values?
The promise of money and growth can easily lure a company away from its core values and strategy, leading it to make business it later regrets. Take Google and its decision to sell a censored version of its search engine in the China market (the ultimate big fish customer). Less than two years later, Google co-founder Sergey Brin said he regretted the decision because “on a business level, that decision to censor… was a net negative.” Sacrificing your values and core strategies to make a buck rarely works well in the long run - in sales and in life.
© 2007. The Loyalty Group. All Rights Reserved.
Posts
