Win Some, Lose Some
We work in a wonderfully open community where ideas and best practices are shared and implemented liberally. Well, except when it comes to sales.
I find this challenging—maybe more than most sales folks. I don’t have a 15-year track record in agency business development. I don’t have a reservoir of previous sales experiences and mentors, and this topic is protected behind tight lips. How do I know if I’m doing this right? Is it a matter of measuring wins and losses? If so, how many wins are considered a good ratio? Why do losses matter?
What’s in a record?
Every year, I prepare a report to recap our business development effort at Happy Cog. I start with the W-L column. I figure if Roy Halladay can be judged on the merits of his W-L record, so can I. This feels like super top secret information, but then I saw former Cog Dan Mall boldly present Superfriendly’s first annual report and disclose his W-L record. Inspired, I decided to share Happy Cog’s: 17-5 (77%).
I’ve read that anything above 50% is considered "good." But, then I have to ask, why do we care about the losses if it’s the wins that keep all of the lights on?
We care, because we care.
Truly competitive junkies love to claim that they hate losing more than they love winning. These sound like wonderful people to spend time with… but the truth is, when your team is excited and geared up for a pitch and you don’t win the work, it stings. Losses cause collateral damage. Too many losses in a row starts to feel like an epidemic and can color other aspects of your work.
One way or another, a loss is going to cost you. Let’s assume you travel to a client pitch and end up losing the work. You possibly paid for:
- Cabs to and from the meeting
- Meal(s) you ate in transit
- Lodging expenses
These things all add up. “But, we don’t travel for pitches,” you might say. Bully for you! I don’t agree with this tactic in most cases. We should talk about something called opportunity cost. Did you spend any time pursuing this lead? Did you prepare a proposal? Have a conversation or two? Create an estimate? Deliver a proposal?
All of these things require an investment of your time, and I’d argue that time is your most important resource, not dollars. It’s time not spent pursuing another lead, time spent by your team not working on other client work, time simply gone.
Let’s suppose you didn’t create a sales presentation, or an estimate, or do any of these things. Congratulations, you’ve avoided all costs (as well as avoided any chance of winning this project).
To determine your minimum opportunity cost:
- Calculate how many total hours you spent working on all of these pieces of your pitch.
- Calculate your hourly blended rate for the folks who invested their time (what each person costs you an hour, averaged).
- Multiply them together.
That’s your minimum opportunity cost. What this doesn’t account for is the revenue you might have earned had you pursued another lead—the road not taken. That’s a bit unquantifiable, but it adds a little extra weight (i.e. regret) to your opportunity cost.
There are a bunch of firms out there who bloat those opportunity costs spending tons of hours creating spec work for proposals and pitches. If you’re one of them, you’re kinda reaping what you sow. This article isn’t for you.
Losses teach us how to avoid future losses.
Last year, a prospective client team assured us that despite the fact that we determined we were outside of their budget and couldn’t start as soon as they wanted, they’d move Heaven and Earth to get the extra budget needed. Oh, and they’d also delay their start.
We sent a team to pitch, only to learn we were still overbudget, and they could not accommodate our availability. A total waste of effort. Within days, another prospect confronted us with the exact same dilemma. We elected not to make the trip.
In another case, a prospect helped us tailor our pitch prep to appeal to one key stakeholder. We were awarded the work, but, sure enough, that critical stakeholder wanted to meet again, and our coach/contact left for another job. We beat out two agencies, but ultimately the project never got out of the starting blocks. Not an epic win after all.
Months later, another client offered to prep and coach us to pitch perfection for another critical stakeholder. We politely declined.
In both instances, we were able instead to focus on other opportunities, opportunities we won.
So far, we’re a year wiser, and 2013 is off to a good start. We’re seeing an overall increase in project inquiries, and so are some of our industry contemporaries.
Let’s conduct a terribly informal poll: How is your 2013 performing so far? More sales leads? The same as 2012? Fewer?
Remove the veil of secrecy and share. While you’re at it, what’s one valuable sales lesson you’ve learned the hard way?