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Dan Fisher

By: Dan Fisher on July 21st, 2010

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Have The Courage To Walk Away

sales closing

Last month I shared with you, A Quick & Easy Way To Grow Gross Profit. In the spirit of growing and maintaining the integrity of our gross profit margins, this month I share a few thoughts regarding the difference between “good” business and “bad” business. And more importantly, why we need to have the courage to walk away from bad business.

First, let me begin by saying that not all business is good business. Just because we have a customer who hires IT consultants (or any type of temporary employee) doesn’t mean we should pursue them as a client. They must qualify for our business. Yes, I said that right, they must qualify for our business. We’re sales professionals, this is how we pay our bills and put food on the table for our families. We don’t have time to chase “tire kickers” or “window shoppers.” One of the beauties of being in professional sales is that we can pick and choose who we do business with. We don’t have to do business with a jerk or someone who treats us with disrespect. We have total control! In sales, we all (myself included) need to look ourselves in the mirror from time to time and make sure we’re being honest with ourselves. As sales professionals it can be easy to fall into the trap of chasing business even though we know in our heart we don’t have a great chance of winning it. We have to take more pride in the quality of the deals that we bring to the table. Let me share a few examples.

I am currently seeing employers with crazy, unrealistic expectations. In essence, I’m seeing customers who are looking for a “Mercedes” but are only willing to pay for a “Ford Pinto” (sorry to anyone driving a Pinto)! I see recruiting and sales teams waste their time on these efforts everywhere I go. Remember, YOU are the experts on the employment market. YOU know what skills and experience warrant the corresponding salaries and/or hourly pay rates. Despite that, I see recruiters and sales people agreeing to do a search for candidates where the client is looking to pay $90,000.00 even though the market rate is $110,000.00 or even more in some cases. Stop This! Consult with your customer by educating them on what is happening in the market. This is the perfect opportunity for you (and us as an industry) to step out of the “transactional selling” mode and put on your “consultative sales hat.” Customers want a vendor who can consult with them and educate them on market factors and trends. They want a vendor who will push back on them and challenge them. What they don’t need is another “bobble head” vendor who always agrees with them. Where is the value in that? If your customer is looking to hire someone at $90,000.00 and the market is demanding $115,000 don’t be afraid to tell them that. Consult with them by suggesting they consider some technical trade-offs in exchange for finding someone with a lower salary history/expectations and who will fit into the client’s budget. If they can’t live without any of the skills/experience and still expect to pay $10-$20K (or whatever the difference may be) below market value then you have to have the courage to say “thanks but no thanks. This sends a strong message to the client; that you’re a professional, you know the market, you take your job seriously and you respect their time. Oh, and you will also sound different then all the other vendors. Many of the other vendors don’t have the courage to say this to the customer so perhaps you will earn some additional respect in the process and differentiate yourself. Don’t be afraid to walk away and find a better deal. They’re out there. Otherwise you are just wasting your time and your customer’s time.

Another example that I frequently see (and we’ve all experienced) is where the client gives us zero feedback. They don’t respond to our emails and they don’t respond to our phone calls but yet we still hold on to the deal for as long and as hard as possible. It’s like that scene from the movie Dumb & Dumber where Jim Carrey asks the girl what his chances are of him going out with her. She tells him he has a one in a million chance. Jim Carrey responds with “so you’re saying there’s a chance! Yeah!!” Trust me, there are customers out there who need your help, value your business and will treat you with respect. Go find them and stop wasting time on deals and customers that have little chance of closing. We all know better. Listen to your gut.

Ask yourself this. How long would you stay friends (or pursue a friendship with someone) who never returned your phone calls and basically displayed behavior indicating that they were not interested in your friendship? You can’t build friendships (or client partnerships) when one person is doing all of the work.

My third example is plain and simple and this happens far too often in our industry. The client asks us to drop our rate. Often times they ask us to drop our rate for no reason and we typically get nothing in return for reducing our rate (we don’t negotiate for anything in return). Even worse is when the customer asks us to reduce our rate so low that we barely even make a profit, don’t make a profit, can’t get paid a commission or worse of all, actually take a slight loss to retain the business. Yes, I have seen that on more than one occasion. In these situations we need to know ahead of time how much of a “hit” we’re willing and able to absorb prior to the conversation with the customer. If the customer asks us to reduce our rate below this threshold than we need to have the courage to walk away.

No doubt there are a number of factors outside of our control that have led to the commoditization of our industry. But let’s be honest with ourselves. We (staffing professionals) have been our own worst enemy. Far too often we try to win business on price. We engage in bidding wars and give in to customer price reductions far too easily. Bidding wars is bad business for everyone-the client, the winning vendor and the losing vendor. We need to have the courage to walk away from bad business. I can assure you this: Once you reduce your rate, you’re not going to make up that GP with the customer at a later date. It just doesn’t happen.

Easier Said Than Done

I know this is easier said than done. I know it has been a challenging 18+ months and the economy has struggled and Wall Street is putting pressure on companies to produce a profit, but where does it end? The best and easiest way to put an end to doing bad business is to go find more and better opportunities. They’re out there. I know many firms that are consistently making placements and generating GP margins north of 30%.

From my experience, sales professionals often give in on price for one simple reason: They don’t have any other opportunities to rely on. So start building a bigger and better pipeline of opportunities so you don’t get put into the position of having to reduce your price.

Just image if all the staffing firms in the industry starting pushing back on client’s when they asked for a price reduction? Imagine if the bidding wars to win business ended? Imagine if we all started walking away from bad business? The market might actually turn in our favor. Do your part and start making it happen today.

 

About Dan Fisher

Dan Fisher is founder and owner of Menemsha Group, a provider of sales enablement solutions dedicated to helping IT staffing firms improve win rates, shorten their sales cycle, and increase revenue per sales rep. Since launching Menemsha Group in 2008, Dan has consulted with over 200 IT staffing firms and has invested over 5000 hours coaching IT staffing sales reps. He’s authored is his own proprietary sales methodology and has previously spoken at Staffing World, TechServe Alliance and Bullhorn Live 2012. Prior to launching Menemsha Group, Dan spent 16 years in the IT industry running local, regional and national sales teams. Dan worked for Kelly Services, Oracle Corporation and Alliance Consulting. Dan currently resides in Boston, Ma.

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