Early Exit or Early Acceleration

Written by Brian Sullivan

As sales managers, we’re all familiar with the conversation. One of your sales reps is making the case to pursue an opportunity and you question why. “It’s a big deal” is the response, “It’s right in our power swing”. Or perhaps, with candor entering the room, “I really need to win this”. And these are all reasons, of course. But what do they really mean? What’s the real business sense for your firm in pursuing the deal? And what’s the business risk?

One of our Sandler team members was meeting with the Chief Sales Officer of a prospective client firm and she said, “Every opportunity that we make a decision to pursue costs us $40,000. Win or lose, each one costs us $40,000”. And in pursuing deals with enterprise accounts, whether your number is less than or greater than that $40,000, the pain of the financial loss is proportionate. This same CSO, by the way, shared that “If you can help me determine that the deals we go after are the ones we’re most likely to win and if you can help us make a determination during a long pursuit whether we should stay or go, I’m really interested in talking further”.

She made a significant point regarding the financial impact of enterprise pursuits. The cost is huge, for sure. But not only the financial cost. What about the scarce human assets in your organization? To credibly pursue a major deal involves people and their precious time. And when your people are engaged in a complex pursuit, their talents are unavailable to other organizational initiatives. For this very reason, the CSO’s words ring true about attacking the highest probability deals and also knowing when to get out. Critical also is being sure that you pursue true profile deals, those that align most closely to your capabilities. Those, of course, are the ones for which your probabilities of successful delivery, healthy margins and robust client satisfaction are highest. So, the importance of pursuing the right deals cannot be overstated. Nor can exiting those that you’re unlikely to win or don’t align to your profile. Taking such actions turns off the financial faucet and allows your firm to redeploy scarce resources on more fruitful initiatives, such as deals you have a higher probability of winning.

So, it’s about early exit or early acceleration. Truthfully, there should be no gray area between the two. Accelerate or exit. That’s the question. But how do you know?

The bedrock of a quality process for answering that vexing question starts, of course, with having a clear understanding of what your organization does really well, what a truly aligned opportunity consists of and what the attributes are of your profile client. With clarity in those areas embedded in the DNA of your firm, you need a practical go/no-go process to evaluate the worthiness of enterprise opportunities. How? By breaking each opportunity’s key issues into three workable categories – Client Issues, Selling Team Issues and Financing/Contract Issues. And you evaluate each of these issues as a team, in a deal forum format, looking carefully at your levels of stability or risk with each issue. That’s the key. For each issue, are you stable or is there risk? And what would some of the issues be? How about whether you have multi-level relationships in the account. Or whether you clearly understand who your competitors are and what relationships they have with the account. How about contractual guarantees, warranties or penalties that will likely be involved? Do you understand them? The number of issues you should be evaluating will vary depending on the size, complexity and impact of the deal on your organization and the account. And for the issues where you’ve candidly, as a team, identified risk, you build pragmatic action plans to mitigate, as quickly as possible, those areas of doubt and uncertainty. And the importance of dealing with these issues as early in the pursuit as possible is critical. In most cases, nothing good will come of ignoring a risk issue and dealing with it later.

The results of your risk mitigation efforts, which often involve direct discussions with the account, will either further build your stability in the deal or clarify your levels of dangerous risk and provide you with actionable information to drive decisions. Of course, some measure of risk is to be expected and accepted in a major deal. But not risk you that you don’t evaluate, don’t address and don’t attempt to mitigate. Acceptable risk is your call. But you can’t make the call without clearly understanding the impacts. There’s no sense in burying your head in the sand. With a pragmatic risk mitigation process, you’ll either be increasing your probability of winning or increasing your confidence that the deal should not be pursued or that the pursuit should be stopped. Exactly, by the way, what was needed by our CSO friend and any other organization selling into and serving enterprise accounts.

Early exit or early acceleration. For your organization and all of its stakeholders, they are both gifts.