Mistake Story from Jill Konrath: "The Temptation of Hot Prospects"

This story is from Jill Konrath and is featured on her blog. Reposted here by permission. There's another story from Jill in the Mistake Bank book.

Sales Mistake: The Temptation of Hot Prospects

A few years ago, my primary business focus was working with large corporations in the Minneapolis/St. Paul area when they were launching new products. My expertise? Helping them shorten time to revenue on new product introductions.

I’d just launched SellingtoBigCompanies.com to help small businesses gain access to my expertise. It was my new baby. I’d invested tons of time and lots of love to get it up and running.

When the phone rang that day, I answered absentmindedly. But when the caller announced that he was from Southwest Airlines, I snapped to attention. He’d been all over my new Web site, was very impressed, and also very interested in my training programs.

The airline was going to be putting its salespeople through training in the not-too-distant future and was evaluating its options. When I asked who else he was looking at, I was delighted to be included with the industry biggies.

Mr. Southwest had dozens of questions about my content, delivery models, remote training options, learning reinforcement and more. I answered every single one of them in glorious detail.

When he requested a proposal, I asked, “How soon?” When he answered that he wanted it in two days, I quickly agreed.

The proposal I sent to him via e-mail covered everything we had talked about in our conversation, plus a full range of pricing options. It was a masterpiece. I had high hopes that this opportunity would take my business to a whole new level.

I never heard from Mr. Southwest again. Even though I contacted him many times, he never called back.

Lesson Learned
It was my own fault. I mistakenly let my own eagerness to land this marquee customer outweigh my common sense.

The truth is I really needed the business at that time. After spending many months and lots of money to create SellingtoBigCompanies.com, I was running short on cash. I should have known better, but I was seduced by the opportunity.

In retrospect, I failed to find out if Mr. Southwest was just exploring his options or actually in the final stages of decision making. It’s highly likely he was just doing the former.

Had I known that, I would never have written a detailed proposal. Instead, I would have focused on helping him determine the business value of making a change. I would have used my expertise to help him sell the concept internally and establish decision criteria favorable to my solution.

Over and over again, I see other sellers make similar mistakes when they have a hot prospect on the line. Like me, they expound on their capabilities and benefits. They willingly provide detailed information and do tons of extra work to create proposals or presentations—anything the prospects want.

While that puts you into the “nice” seller category, it’s not a good business decision to invest tons of time and effort to land a fantasy customer. Nor does it help your prospects make the best decision for their organization.

If Mr. Southwest was actually deciding in a couple days, I should have addressed the fact that I was a small boutique firm that didn’t compete head-on with the larger companies he was looking at.

Doing business with me would have been risky. I knew that. But I didn’t want to bring it up; I was hoping he wouldn’t notice!

I was so blinded by the opportunity that I was willing to do anything that he asked. It was delusional on my part. Wishful thinking. Hopeful. When we feel this seduction, we need to remind ourselves that “hope is not a strategy.”

While hot prospects may hold the promise of big paychecks, there’s often much that still needs to be determine if it’s a good fit for your company.

Don’t be overeager. Instead be ruthlessly realistic. Detach from the fantasy and assess your true chances. Bring up the tough questions.

Why? Because it’s the right thing to do for both you and your prospect.

"Trying to be all things to all people costs you money"

There is a very useful story in the You're the Boss blog in the NY Times today. In it, Josh Patrick explains a dilemma common to small consulting firms and other, as he calls them, "micro-businesses":

If your business doesn’t have enough cash, you will be under stress. That is something I can attest to from first-hand experience. When you don’t have enough cash, you feel pressure to take any client who walks in the door. But this is usually a mistake. Trying to be all things to all people will cost you money.

Most owners understand this. But when you are under pressure to pay your bills, it’s hard to say no — even if the customer is outside of your target market. You need money, you take the business, and you often end up spending an inordinate amount of time serving the customer. And if you stay in this cycle, you put your business at risk. When you own a microbusiness, burning time is just like burning money.

Several years ago, I did some work with a graphic design firm, Gray Cat Studio. Michelle Bisceglia, the owner, had built a knowledge base working with specialty food manufacturers. She knew a great deal about the businesses and what made them successful.

When I first started working with her, she would take work from anyone. She often lost money when she went outside her knowledge area, but like many microbusiness owners, she was often short on cash.

We worked on developing her niche and I coached her in using a new word: No. Over time, two things happened. She was able to charge higher fees because of her expertise, and it took her much less time to complete projects. This allowed her to create a cash cushion, which made it even easier to say no to customers who didn’t fit her profile.

So: mistake is taking any piece of business you can. Solution: create discipline to say "no" to inappropriate customers, raise price to high-value customers, build a cash cushion to deal with the inevitable peaks and valleys of selling. Degree of difficulty: high.

But even though it's difficult, it's vital. There is a similar story in the upcoming Mistake Bank book on this very topic. Stay tuned!

Even if you have strong capabilities, you still need to sell yourself

A mistake story from Kevin Liles, CEO of KWL Management, as quoted in Adam Bryant's Corner Office column in the New York Times.

I wanted to be the host of a new hip-hop show, and I didn’t get the job. I was the biggest guy in the marketplace. Given what I’d done, that should have sold me. But I didn’t sell myself. So, after that, I realized that no matter what I have done before, I had to learn the art of selling. I had to learn the art of explaining my value proposition when I show up somewhere. How do I differentiate myself? I know who I am. I’m very clear. If I’m meeting someone, I’m very clear about their value proposition, and I know what my value proposition is.

This is very good advice, and something I have trouble doing. I oftentimes expect my resume to sell me. I am proud of my accomplishments and expect that others would see the value in them, and connect it to their needs. But, as Kevin Liles says, that's not enough. I need to understand what they need and point them to what I can do to directly address that need.

"One Thousand and One" founders: "We were pushing something they didn't need or want yet"

This story is from Gabrielle Dolan and Yamini Naidu, the founders of the organizational storytelling consultancy One Thousand and One, as told to Australia's Startup Smart blog. Startup Smart features a weekly entry titled, "My Best Mistake," which we'll be scouring for more great stories to point to.

While Dolan and Naidu were confident organisational storytelling would take off, they failed to recognise that most people had no real understanding of it, so demand was almost non-existent.

“In 2005, people still were not sure what organisational storytelling was. They had no idea. We tried to run a few public workshops but the market wasn’t ready for it,” Dolan says.

“We invested a lot of time and money into developing and marketing a program that ran at a loss.”

“Because the market wasn’t ready, we felt we were pushing something they didn’t need or want yet. That was a really early learning curve for us.”

Dolan says the turning point came when she and Naidu ran a program that only a small number of people attended.

“When you’re just sitting there and people literally aren’t buying it, you realise you haven’t got it right,” she says.

“We were six months into developing the program and we’d spent thousands of dollars. At that time, it was the biggest investment we were making.”

While Dolan and Naidu realised they had made a mistake, their efforts didn’t go entirely to waste.

“What we didn’t realise was that some organisations were ready – they were more mature and more advanced,” Dolan says.

“Instead of running public workshops, we would go and work with the likes of NAB and Ericsson, and do internal workshops.”

One Thousand & One has only recently ventured back into public workshops, but has taken a far more cautious approach the second time around.