Rainmaker Problem # 11: Losing When We Thought We Had It in the Bag
(This post is another in our series of Rainmaking Problems. We invite your comments on this problem and would also welcome any problems you would like to submit to get comments from other readers.)
I recently received this problem from a reader in New York, whom I will call Steve . I have blinded it to protect the anonymity of those involved. Steve wrote:
I came across your blog this evening as I sought answers/understanding for a prospective job that went south. Perhaps you can use this for your Rainmaking Problems; it’s at least cathartic to type this confessional and I thank you for your indulgence.
I first met the prospective client, a [charity organization], in the summer of 2008, introduced by an acquaintance who was a member of the board and said they were looking for [the kinds of services we offer]. I had two good meetings with them, developed a thorough and very reasonable proposal, and was led to believe that we would be authorized to start work soon.
After a few weeks of being told approval was pending, my acquaintance informed me that the board was also talking to other [firms in our field] - and that they’d used my proposal as the basis for these conversations (after stripping any identifying or cost language). I felt this was somewhat unethical but I was interested in the project and didn’t make a protest.
After many more weeks, the board apparently narrowed the selection to us and one other firm. My acquaintance sent me a copy of the other firm’s proposal - the language of the scope was nearly identical to ours, but there were many more restrictions and [their cost] was higher. The other firm, however, had strong allies on the Board (so says my acquaintance) and they were awarded the project. I was a gracious loser, sending notes thanking everyone who’d I met, and genuinely disappointed not to be doing the work.
Then, a few days later, my acquaintance calls to say they want to see us again. We put together a new presentation to support our proposal and I’m told we were far superior to the other guy.
I reach out to my acquaintance to learn the verdict, and he tells me they want us to return again, this time [after doing some upfront work at our expense to get a sense of our approach] - no decision yet.
At this point, five months since the initial meeting and one apparently rigged loss already, I’m a little frustrated; given what had happened with my proposal am distrustful of their motives in seeking new original content; and feel [preliminary free work] would be grossly premature & would foul the planning process should we actually get the work. However, I accept the invitation.
I elect to not provide [the free work] and instead focus on planning issues, as if it were the beginning of the work as layed out in my proposal. The other guy comes in with a dog & pony show and gets the job.
So after mulling this over, I feel the critical moment was when I accepted the invitation to return the last time; that everyone would have been better served by me challenging the need to return and by me saying flat-out that thought we’d already made our case and wouldn’t be doing any [free work] (sounds arrogant as I type it!). Or perhaps we should have thrown together a dog & pony show too, but I still believe this would have come back to haunt us had we landed the job, and really would have stung if we’d lost.
Was it right to feel squeamish about the way they appropriated our proposal? Was it right to feel frustrated? Was this job better not to get, or was it even possible to get?
My gut tells me we were being used to make the rigged choice shape up, and that we should be grateful not to have gotten the job, but still, I know there’s an improved me that would have found a way to handle this better - and would be interested in a true Rainmaker’s perspective.
I have sent Steve a preliminary response, but think he would welcome the chance to hear other people’s assessment of the situation, before they are biased by mine. What are your responses to the author’s questions?
March 4th, 2009 at 4:14 pm
“Steve”, I read this exactly the same way you do.
- You originally put together a great initial proposal.
- Someone at your client has a relationship with someone they wanted to kick some work to
- Your proposal was used to define the work for your competitor. “Can you do /this/?”
- The come-back was just using you to leverage some sort of concession from your competitor.
- You’re luck you didn’t get this job.
Is it normal for this type of customer to take your proposal, then spend months seeking approval? Was there an opportunity for you to have done some diligence during that window to keep the client focused on you as the preferred provider?
March 4th, 2009 at 5:17 pm
> Was it right to feel squeamish about the way they appropriated
> our proposal?
Yes.
> Was it right to feel frustrated?
Right or wrong, it was certainly understandable. But better to deal with the underlying issue. (See below.)
> Was this job better not to get …
The client approach you describe is not at all uncommon (although not *always* malicious/overt on the part of the client). So, no it would not be better not to get it (forgive the multiple negatives). It’s part of the sales landscape, so it needs to be accepted and managed.
>… or was it even possible to get?
Absolutely.
I’m going to confess to only having just learned what I’m about to describe, but I think the Sandler approach of the “Up Front Contract” is a crucial part of what you *may* (the devil’s in the details) have missed.
The essential philosophy of the UFC is that you, as the sales guy, are not a second class citizen in the negotiation, and you engage with the client on equal terms. Just because they say jump doesn’t mean you don’t get to have them jump with you.
In practice that means that every time you get ready to give something to the client (your time, some early show-off-your-knowledge advice, a proposal, etc), you must agree up front some quid-pro-quo. The UFC has five key components, but the core of it is an agreement that they will give you at least two things:
1. A description of what would happen next in their decision process *if* they find what you are about to do for them (proposal, advice, etc) compelling
2. A specific agreement that they will give you a clear “yes” or “no” as to whether they *did* indeed find it compelling (and, as a result are/aren’t willing to move onto the next step in their decision process).
Now, people are people, and such a verbal contract obviously isn’t binding. But the theory is, going through that process does two things:
1. It leaves you in a lot more control of the sales flow
2. It significantly reduces the chances of getting used the way you appeared to have been (as we all have, by the way, so don’t remotely beat yourself up)
March 4th, 2009 at 6:03 pm
Carl:
This case sounds to me as if a staff member is trying to get Steve the work, but a board member has a different agenda and is foiling the effort.
This happens, especially lb the not-for-profit world.
Tommy
I like your approach, but if Steve does have an enemy on the board, I’m not sure it will work. I think his contact is acting as if he has more influence than he does. This is not unusual.
Ford Harding
March 4th, 2009 at 9:01 pm
@Ford,
You’re right. Clearly there are times when the dice are simply loaded against you. And in fact there was a third benefit to the UFC process that I omitted that addresses that:
3. It makes it clearer, more quickly, when you should drop a given opportunity
Sandler’s UFC approach can (so the argument goes — I’m not, nor am I affiliated to, Sandler) expose the problem, either through the client being unable or unwilling to commit to the necessary quid-pro-quo in the first place, or through them reneging on it after committing. Either way, it’s both a warning sign, and it provides for a more graceful exit. In fact, if done well, the *client* exits.
And of course the benefit of that is, you waste less time and emotional energy on the inevitable.
March 4th, 2009 at 9:30 pm
Tommy:
I don’t think this was hopeless. I think Steve relied too much on his contact and didn’t get to know the board members sufficiently. If (if) he could have done that, he might have isolated the one who was against him.
Ford
March 5th, 2009 at 9:25 am
One method of dealing with this situation or preventing it, used by the Big Four consulting companies, is to Present your outline proposal in person - not giving in advance or leaving behind any hard-copy. If the client is interested in proceeding, then a contract of engagement is confirmed before any more work is done. If they are not interested, then you exit gracefully but have not given them anything they can use themselves or pass to competitors. A client who is not prepared to give you the time to discuss your proposal is not serious about “buying”.
March 5th, 2009 at 9:49 am
This type of situation is not unusual in the consulting industries. I agree with Tommy that Steve should have made an effort to get to know the other board members better. The entire board was making the decision not (just) the accquaintance.
Generally speaking, once a proposal leaves your hands, it is the property of the potential client. They can (and will) share it with anyone they choose. Unfair/unethical? Yes. Will they regret taking the lowest bid when they start recieving the change orders asking for more money? Yes. Here’s where Steve comes in…
Steve, get to know the other members of the board. Remain open to the possibility of getting the project anyway in the future. Often, once a client starts recieving change order after change order asking for more money for the same amount of work you originally proposed for the true cost, they will start to see you in a better light.
Bottom line:
Be honest about time and cost. (yes you will lose projects at first but will soon have the reputation of not “lying” to the client and clients will, if they’re smart, start to appreciate this.)
Be open to future work with a (still) potential client. Keep in touch and keep building the relationship(s).
Know who the real decision makers are. In a “board” situation, inside politics are key players. Factor them in.
and finally… know your own limits and who you want to spend your time and effort on. Sometimes you just have to let the potential client go.
Good luck and find a way to laugh at the insanity of consulting.
March 5th, 2009 at 10:39 am
Ugh. We’ve all been there. Isn’t it frustrating to think that so many things are out of our control in these kinds of situations? Maybe the following will help. While we don’t know all the details, seems like there might have been a missed oppty to ask some questions upfront that might have helped identify some potential challenges earlier, so you would have time to overcome them during the process. In some pitches I work from a list of “conversation starter” questions that not only give me insights into a prospect’s challenges, but also insights into the personalities and the decision-making process. Make sense?
March 5th, 2009 at 2:24 pm
Angus:
This is a good idea, though I suspect you would agree that can be hard to hold to, if the client says a proposal is essential.
celt365
You’re dead right that this will happen and experienced to get over it quickly. Your advice to know at what price you will fold is also good. Steve should definitely in touch with the client.
Steve Condon:
No doubt your questions include: Who else will participate in the decision and how?
Tommy:
I do agree with seeking a clear advance with the client at each stage. I have heard good things about Sandler, before and am glad you got value from the program. Note that other sales programs also suggest you get increased commitment from the client at each stage. It is a good practice.
Ford Harding
March 5th, 2009 at 3:27 pm
I was a property-casualty insurance broker for two years. Those years were the bottom of the classical P/C 7-year cycle. We would work our butts off just to keep current business, often at reduced premiums. My outside rate quotes, well in advance of renewal dates, got shopped to current brokers, friends, etc. Sometimes you get the bear, etc…I did land a few anyway.
I echo others in emphasizing the internecine workings of nonprofit boards (spent 15 years on one). I’m assuming the ’second effort’ was vetted by the ‘friend’ on the board as being legit - Steve is silent about that. If the friend confirmed that there was still a very good chance for Steve, Steve should have known very clearly why he was brought back - what hiccup with the other vendor had occured after the initial turndown.
March 5th, 2009 at 4:22 pm
Andy
This is more good advice from someone who experienced rough and tumble selling. Have you noticed how clients aren’t as quick to help you raise your prices as they are in helping you lower them?
Ford Harding
March 7th, 2009 at 10:46 am
For anyone interested, here are the comments I made to Steve, when I first received his email. I am not suggesting that they are necessarily right or better than those made by others who have commented on the original post. They are just one person’s initial reactions.
Steve, here are my initial reactions:
1> Yes, the client’s use of your materials without your permission was ethically questionable, but I don’t feel highly sympathetic on this count. If it had worked in your favor, you probably wouldn’t have complained. I suggest putting a copyright at the foot of each page of your proposals to provide a slight protection.
2> I think you were dealing with a naïve client who didn’t realize the costs they were asking you to incur and, unintentionally, were placing you in a Dollar Auction (see my Feb. 11. ‘08 post “Beauty Contest or Dollar Auction” for an explanation). If so, you were wise not to play. In the future you might–might–want to try educating the client. (”Thank you for the consideration, but I will have to think about whether it is good business for us to respond. Complying with your request could cost anywhere from . . .”)
3> You had an enemy on the selection committee. This is not unusual.
4> Clients choose whom to hire on their feelings and justify their decision with logic and facts afterwards. It sounds as if you won the logical battle, but lost the emotional war. Also, not unusual. You are in good company. Did you do your homework on what each committee members was like and wanted, so you could appeal to each one? That is key to winning.
Ford Harding
March 13th, 2009 at 9:18 pm
All -
I cannot thank you enough for the feedback, thoughts, and observations; the depth of consideration shown here is stunning to me, and I will be passing all this on to key people in my office; we frequently encounter projects of this nature and I know we’ll do better next time.
Ford’s direct advice to me was fantastic; the dollar auction helped frame years of experience in a way my gut knew but that my head hadn’t gotten around (lesson: become the guy holding the auction!).
I very much like the Tommy’s reference to the UFC, Angus’ no-leave-behind approach to proposals, and everyone’s observations about board politics.
For what its worth, I did make efforts to reach out to each of the board members I’d met, independently from my aquaintance, in an effort to gain perspective and build a relationship (friendly emails with an article or some other attachment related to the project). The odd (and perhaps blessed) thing was that my contact seemed defensive about this effort, and sought to limit it. I don’t know if he felt threatened by it, or jealous, or embarrassed, but it added to my growing unease about the situation. But yes, generally I felt like I wanted to know more about the board, and wasn’t effective about getting that knowledge; next time I’ll be more senstive about this, and more aggressive in getting that info.
Its been a few weeks, and I feel more strongly that, once I’d decided to no longer compete on their terms, I should have simply stated as much, but who knows: part of me feels like that would have burnt a bridge, and as someone said, you never know when they may come back.
I thank you all so much; I hope I can return the favor someday, and if anything interesting happens will provide an update.
Best!
“Steve”