The Business Deal that Haunts Me: How One Phone Call Cost me $45K

Phone Call

A few years ago I lost $45k in one phone call. It still bugs me. And it happened for no good reason. I simply failed at winning over the right people, which stopped me from getting the deal done.

I’ve changed a few details in order to maintain confidentiality, but the lessons are the same.

When I was a solo consultant, a senior executive I knew wanted help growing a slow performing product line. We worked together for two weeks analyzing the business and putting together a proposal. The project was worth $45k.

I was assured the decision was his alone to make, even after asking if there was budget and if anyone else needed to approve the proposal. I started planning a surfing trip in Indonesia as a reward for a job well done.

The phone rings Wednesday morning and my contact says, “Alright Aaron, we’re ready to go ahead. I’d like to start next Monday… but let me check in with the chairman of the company one more time.”

At that moment my heart sank. So much for surfing. I knew the deal was lost and it was all my fault. Sure enough, the next day the call comes telling me the chairman didn’t feel the project was worth their time or money.

What should I have done?

Organizational Politics 101: Getting Buy-In

As entrepreneurs we like to think the hours we spend creating, perfecting and selling our products speaks for itself.  Even if your product is 10x better than what the customer already has, count yourself lucky getting in the door.

You still need the organization to acknowledge there’s a problem that needs to be solved. If people in the company don’t acknowledge there is a problem, stop selling to them. It doesn’t matter how great your solution is. Give the lead to your marketing team; you’re not closing a deal any time soon.

Politics are people being people. It’s not personal, and there usually isn’t any malice to it.

You’re an outsider.  Your product (no matter how much value it delivers) represents change. People fear outsiders and change. Even if is something isn’t working they’d rather go along with the status-quo.  It’s what they know.

In my case, we realized the problem of sluggish growth could be solved through analysis of their thousands of customers. Then focusing the sales team on the types of work that the company was most efficient at. However, I didn’t ask the sales team if this was a challenge they cared about. More importantly, I didn’t talk to the chairman of the company. He set the agenda for the Leadership Team. Asking if he actually cared whether that product line was growing fast enough would have saved a lot of grief.

When you’re selling to a business of more than 5 people go to the top decision maker as quickly as you can. Talk to the CEO or owner, ask them to endorse the proposal. This way you have buy-in from the top to get business done. The details will be delegated to the appropriate VP. In every meeting ask:

•   What problem are we solving for you?

•   Who else needs to see this?

•   “The solution will cost between “x” and “y” and will provide “z” value to you. Who approves this expenditure; or how do we work this into a budget?”

You’ll quickly learn what the problem you’re really solving is. More importantly you’ll be learning who will help or hinder the sale. I map out the entire sales process for every opportunity, including who will sign the contract (often not who you think).  I appreciate Mark Suster explaining how to pitch a VC, with the types of people and steps to take.

Don’t Fail in the Last Mile

Assuming the deal was done, I quit pushing right to the finish. I was guilty of premature celebration. Everyone should have been buying-in. Everyone should have been acknowledging the problem, and genuinely excited about the solution.

I learned I don’t surf until the deal is ‘closed’ and that means a signed contract and the money is in the bank. Period.

I keep this story in the back of my mind whenever I’m meeting potential new customers. Let me know how you do.

Aaron Vidas is the founder of recently launched StrategyBox, which helps rapidly growing B2B companies create simple plans to reach their next stage of growth. His experiences include:

  • Helping professional services, SaaS, and consumer products companies find their most profitable customers.
  • Working with entrepreneurs to clarify their vision.
  • Creating and growing businesses that do well for the community.

Schedule a call with him to talk about entrepreneurship, fundraising, and stakeholder management.

Photo Credit: Shutterstock/File404

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