You’ve won the deal, should you keep it?
Founders and executives responsible for revenue growth work extremely hard to land deals. Especially enterprise deals. These types of deal pursuits often take months and even years in some industries. So when we win these deals we're ringing the gongs and ready to celebrate. After the big win the company has to deliver on these deals. That's when things can get complicated. Once you're in operational mode, delivering what was sold, you might find out that the deal that you won wasn't as great as you thought. Let's call this 'seller’s remorse'. Seller’s remorse can happen for a variety of reasons (e.g. poor unit economics, strained client/vendor relationship, overly demanding client, etc.). You're now required to determine if you should stay in the deal or, as some would say, "fire the client". While it may seem counterintuitive, firing the client might sometimes be your best option. But there are a few things to consider when making this decision:
1) Is this deal additive to my company? Take some time to assess whether this deal, as it is structured, is additive to your organization. Said differently, does this deal, combined with other agents and factors like similar deals or blocking competitive entry, make my organization stronger? If so, then should work to quantify how much stronger. This should be expressed quantitatively and qualitatively. Determine if it is additive or detrimental. Either way, the answers to this exercise will provide rational towards any actions you take regarding the deal.
2) Is this deal a strategic play? When determining whether you should stay in the deal be sure to consider the strategic impacts of the existing deal. Does the existing deal allow you to test new products with real customers? Does it preclude your primary competitor from gaining entry to an influential company in the industry? Does the deal allow you to set the market in terms of price, features, service? Does the deal allow you to control the industry narrative? Consider the strategic implications of the existing deal prior to taking action.
3) Is this deal hurting team morale? I've seen first hand how a bad deal, in my case poor unit economics, hurts team morale. It's a painful slow process that if left unchecked can have very negative implications. The example I'll reference consists of an operations team trying to deliver a service against almost impossible cost constraints. Every single day they had to produce miracles just to deliver service. At first is was exhilarating because their efforts made the economics of the deal work. But over time their miracle-making desire waned and this deal killed morale on the entire team. Be sure to consider how specific deals are impacting your team's morale.
4) Can I restructure the deal? You may think that once a deal is done that the terms can't be revisited. But that's not true. Especially if you've developed a strong partnership with and you're delivering value to the client. Think about it. Your client has gone through a procurement process and performed due diligence on your company, negotiated pricing, negotiated terms, acquired the necessary approvals, created a vendor profile in their system, and may have even written a press release announcing their decision to select your firm. Your client doesn't want to revisit this process! It's costly and takes up valuable time. Also, if they have to bring in another vendor to replace the work you're delivering then the client opens themselves up to unknown risk. With this in mind, before firing them, consider sitting down with your client torenegotiate some specific terms so it makes sense for you to stay in the deal. Many companies are reasonable and will try to find a middle ground to keep change and risk at bay.
5) Will killing this deal also kill the relationship? I read a lot about sales and I often read of this notion of 'firing clients'. I understand what people are trying to articulate, but the tone of 'firing your client' seems punitive. The tone of it reeks of arrogance and an abuse of power. And I think it's this underlying tone that has compelled people to 'fire clients' in the most idiotic and mean spirited ways. The result of this approach is a severed relationship. Just because the deal wasn't favorable to you, for whatever reason, your approach to ending the contract shouldn’t also end the relationship. Why not preserve the relationship? It could easily birth another deal that makes sense for your company. When you think it's time to 'fire your client' I want you to consider not using the word 'fire'. Perhaps you could say, "discontinue our contractual relationship". It’s a much more long term approach to dealing with a short term issue with a deal gone sideways..