One of the biggest mistakes I see entrepreneurs make is wasting resources chasing deals they cannot win or winning business that is not profitable.
When put in those terms, no one wants to make those mistakes. They make no sense.
But it happens all the time. Why? Why waste resources if you cannot win? Why bring on new business that is going to cost you money?
There are several reasons: Fear. Pride. Competitiveness. Hunger. These are two mistakes that are easier to make than we’d all like to admit.
In fact, in the early days of Rise Performance Group, I came close to making them myself. Hungry for business, I was tempted to take whatever I could get.
Thankfully, I quickly started following the advice I had learned early in my sales career – the same advice I had followed to build successful sales teams in the technology space over a 25-year career.
It’s simple advice, but it’s profound advice:
There are two winners in every deal: the one who wins, and the one who gets out early.
Have you ever noticed how stress can cause you to veer from truths that you know are critical to your success? In my former career, I had proudly boasted for years about how my sales teams overachieved because we had the discipline to walk from OK deals, deals that we might win, so we could focus on great deals, deals we should win.
However, when it was my business, and I was experiencing the stress of generating revenue and getting things off the ground, I was tempted to violate a principle that had served me so faithfully.
Fortunately, I quickly relearned the truth I had preached for years, “You cannot afford to spend resources chasing opportunities you cannot win or winning deals that are unprofitable.”
By honoring this principle, I was able to right the ship and get Rise Performance Group back on track. I did this by establishing a process of prioritizing prospective opportunities by the following three criteria.
(Side note: I believe these three criteria can be applied to more than entrepreneurs. Ask these three questions every time you consider a new position, a merger or acquisition, a new sales opportunity, a new product offering… these criteria apply to individuals, small businesses and large corporations.)
Is this opportunity in our sweet spot?
I define “sweet spot” as a defined target market and type of client problem that I can solve.
My strategy is to focus 80% of our efforts in the target market we believe is ideal for our value proposition and 20% of our time exploring new target markets.
However, target market is not all that matters when developing a sweet spot. The type of problem and the owner of the problem is also important.
Identify which problems you can solve better than anyone else and then have the discipline to stay focused on finding and serving those clients with problems you can solve better than anyone else.
If a prospective client doesn’t fall in your sweet spot, then have the discipline to move on. Die-hard fan clients are created when you solve their problems better than the client expects.Identify which problems you can solve better than anyone else and then go solve them! Click To Tweet
Is it going to be duplicable?
Will I be able to use existing intellectually property or repurpose the intellectual property and the experience gained through this experience?
Will I learn distinctions about this type of customer and their unique pain points that will help me sell additional work in my sweet spot?
Will the referrals gained attract more work in our sweet spot?
In each client experience, I’m not only working diligently to resolve their problems, I’m also looking for ways to apply what I’ve learned from solving previous client problems, learning new things that will help future clients, and providing a level of service that I hope will lead to referrals from that client. That’s part of business – if you’re in it to grow, you will be looking for these types of win-win situations.
This strategy helped me eliminate one-offs and doing work that did not generate the kind of referral work I wanted.
Will we earn our target margins?
This one is critical and often overlooked.
Many times, a business feels they need to offer discounted work in hopes that it will eventually lead to full price work.
I am a critic of this approach. Discounted work, more often than not, leads to more discounted work. If someone does not see the value in what we do… we simply keep looking until we find someone who does.If someone does not see the value in what we do… we simply keep looking until we find someone who… Click To Tweet
That doesn’t mean we don’t offer introductory rates, specials and other low risk ways for a client to experience our value proposition. Sometimes it’s a way to open a door. It does mean that those are strategic decisions with a specific outcome in mind.
Consider this: if you were offered the opportunity to purchase a high-end vehicle at the price of an economy car, what would your first thoughts be? One of your first questions would likely be, what’s wrong with it? You would question the value of alleged high-end vehicle because of the low price.
Your products or services are no different. If you are providing a premium service or a high-value product, don’t discount that value. Neither you nor the customer will be happy in the long run.
Business is Business
Rise Performance Group is a small business. Some of my clients are very large corporations. At the end of the day, we are both faced with the same decisions and temptations to chase the deal. In order to succeed, we must be committed to our purpose, understand our sweet spot, and then chase those deals with everything we’ve got.
This disciplined approach has helped us overcome many challenges over the years. But most importantly, it has allowed us to experience the magic of momentum and is the reason Rise Performance Group is thriving today and not just surviving.
I’m passionate about the topic of understanding your sweet spot, knowing your clients, and delivering extraordinary value to them. I’ve written an eBook called Loyalty Isn’t Luck which covers these principles in more depth. Grab a free copy on our website if you’d like to learn more.
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