There’s nothing quite like the thrill of the hunt in sales. Crafting your pitch, crushing the competition, and getting the buyer to sign on the dotted line – it’s exhilarating.
But what if that sale you’re working on isn’t really worth it?
It’s hard to walk away from a deal. But if the project isn’t going to be profitable, better to identify that early – and either adjust your approach or show the prospect the door.
Here are 7 signs that it may be time to let an opportunity go:
1. You’re competing with four or more vendors
Competition is an expected part of the game, but if the playing field remains crowded at proposal or RFP time, consider this a red flag.
If the prospect hasn’t narrowed it down to at least their top 3 choices, the deal is likely still in its early stages. Often this step is handled by a lower level team member rather than the true decision maker. In many cases, the level of effort required to close the deal is disproportionate to the odds of actually winning.
2. They wear out their pen redlining your proposal
“I can’t afford that.”
“Could you include a detailed description of how many hours each task will take?”
“Can my team do steps 2, 8, and 15 in-house?
A seasoned sales rep is used to hearing comments and questions like these, and knows how to maneuver them to advance the sale. At a certain point, however, if a prospect continues to nitpick and redline your proposal, it’s time to move on to greener pastures.
Every hour spent going back-and-forth increases the cost of sales and chips away at profitability. And if the prospect doesn’t appreciate your value now, that will probably carry through to your project – meaning you’ll find yourself constantly justifying your fees and the value you bring.
3. Team resources are tight
The wrong project risks stretching your resources thin and draining the energy and enthusiasm of the team.
Accurately forecasting resource availability – and balancing that with what’s in the sales pipeline – is one of the most critical functions of any service delivery organization. Do you have a clear picture of the number of hours a project will require, and the volume of each team member’s workload?
A system with real time visibility into resources and capacity is a must for any profitable service organization. If you’ve scraped by with Excel spreadsheets or whiteboards, it’s time for an upgrade.
4. They’re just difficult to do business with
When a project goes south, it’s rarely out of the blue. Warning signs of a troublesome client can often be detected in the sales process.
Indicators you’re going to spend more time than planned on a project include:
- They frequently cancel or are “no shows” at meetings
- They go dark for extended periods of time
- They fail to prepare or complete action items
- Project goals are a moving target
- They resist documenting requirements and setting expectations
- You feel drained after talking to them
5. It’s not really within your current skillset
Pause before jumping in with “we can do that!” if a prospect asks for something you’ve never delivered. If a new project is aligned with strategic expansion into new verticals, products, or services — great. If not, think carefully and price accordingly.
Working with clients who aren’t a strong match for your expertise takes you away from opportunities to do your best work for your ideal clients. Rather than moving in for the close, politely give the prospect an alternative:
“From what I’ve learned about your team and goals, I don’t believe our product is the best solution for you. I recommend ________, because _________.”
This approach builds credibility and trust when delivered respectfully, and when that prospect has another project that may be a fit, they’ll remember you.
Tracking Project Profitability
Ultimately, developing the discipline to walk away from deals that aren’t good for the bottom line starts with knowing which projects are profitable in the first place. That means tracking tasks, billable time, travel, and other expenses at the project level – and on a real time basis, not just at month end close.
“Guesstimating” at this does not a profitable company make. Guess wrong, and you’ll find yourself with project delays and outsourcing costs that are difficult to contain.
Putting this information in the hands of your Project Managers and sales reps empowers them to manage projects AND profits.
How do you empower Project Managers and sales reps to manage projects AND profits? Do you have a recommendation to add to this list on finding the right-fit clients? Let us know in the comments!