Losing Early

Nobody likes to lose a bid. Unfortunately, it comes with the territory. Like a great hitter in baseball, even the best saleman only close about 20% to 33% of all the deals that they pursue. Having said that, I thought about two strategies that might help you focus on the most promising deals and at least learn something from your lost deals.
In the book “Hope is Not a Strategy”, Rick Page states the the worst case scenario is to commit significant resources to a potential deal, only to finish second. If you are going to lose a deal, it’s best that you “lose early”. That’s because the less time and energy that you invest in a lost cause, the more time and energy you have to spend on more promising deals. So if you can develop some methods to help you identify the most promising deals and the least promising deals, you can start “losing early” more often instead of finishing second in a deal that you never really had a chance on. One of the ways to help you identify the more promising prospects is to review your most successful transactions and analyze them. If you can start to detect any kind of similar patterns that might emerge from your analysis, you might be able to determine some similarities. Once these similarities are determined, you can start to look for prospects that fit that profile. For instance, I sell telecommunications cabling to commercials businesses. Most businesses tend to want to commoditize their telecommunications cabling. In other words, they believe, or at least they want you to believe that the quality of the installation is irrelevant and all that they are concerned with is price. The exception to this are High Tech firms. High Tech companies have a higher than normal dependency on their telecommunications compared to say a doctor’s office or an insurance company. Therefore, since I try to position our firm’s products and services as one of quality, I find my message is more well received by companies in the high tech sector. Therefore, I target this sector. In the rare case where I might find myself pitching to an organization that isn’t in the high tech sector, I watch closely for signs that I am not in a winning position and take appropriate actions. I minimize the time and effort that I continue to invest and will gracefully bow out of the bidding as early as possible.
On deals that you end up staying in til the end, even though you lose the bidding, try to salvage something for your efforts. When I lose a bid, I try to find out why I lost it. Was it price or something else? Sometimes the buyer might not be forthcoming with his reasons, but if you approach him in a professional manner and explain that you invested a lot of time and effort to bid his project, you should be able to get an answer. I think it’s an important learning tool to find out which of your competitors won the bid and what was the decision based on. I tell the buyer that I know that I can’t win them all and obviously I’m dissapointed that I won’t be able to work with them on this project, but if they can help me by sharing this information with me, at least it won’t be a total loss. All bids have a built in investment of time and effort. If you don’t find out why you lost a bid, all of the effort that you put into the sales process was a total waste. If you can find out why you lost and who you lost the deal to, it might help you make some adjustments to help you win more deals in the future. I like to say that sometimes we learn more from the deals that we lose that from the deals that we win.