Episode #12: When to Walk Away from a Deal

He Said She Said - An Inbound Sales & Marketing Podcast

In this week's episode of He Said, She Said, we talked a lot about the criteria businesses should be considering when evaluating leads. This goes beyond demographics and touches on things like the prospect's attitude about your product/service, their expectations, and whether they really value - and are willing to pay for - what you do. It's a hot topic that has been on our minds lately as we work towards our goal of bringing on larger clients, and something that plays into our decisionmaking about whether or not we should pursue a lead or walk away from a deal. I hope you enjoy the discussion and would love to hear your thoughts about this topic.

Listen to the episode to hear it all, or read the show notes below.

Read the Show Notes:

Today, we're talking about how to find - and keep - the right clients. This has been a transitional year for Quintain. Kathleen had the opportunity to attend the Goldman Sachs 10,000 Small Business Program earlier this spring and, through that program, worked on a growth plan for our business. As a result of that exercise, we realized we needed to go after bigger clients - not simply for the sake of getting bigger clients, but because larger retainers would give us the ability to hire the right team and deliver great results for our clients. In addition, larger retainers allow us the bandwidth to complete the day to day work (posting blogs, promoting content) that is so essential to inbound marketing while also working with our clients on a strategic level (which is where we can add the most value).

We've been talking alot about how we can make this shift from small retainers to large ones and at the same time working with our Director of Sales Rich McElaney on a marketing and sales plan to support this shift. This isn't just about raising prices (although that is important) - it's about developing a new audience persona and marketing strategy, and then evaluating the leads we are getting to ensure they are the right fit for our new portfolio of services.

What is the right client for you? (and are you willing to walk away if the fit isn't right?)

When you ask most companies, "what is the right client for you?", they tend to offer up a demographic description of their ideal lead. Demographics are the easiest thing to identify, but it'salso important to look at things like:

• The prospective client's attitude towards the services you provide. Do they see you as a partner or a vendor? If they view you as a vendor and are constantly trying to get more out of you for less money, the relationship will inevitably be adversarial. By contrast, clients that view their agency (or other service provider) as a partner are more enjoyable to work with and result in win-win relationships. Over the past two years, we've had a few client relationships that were just a bad fit because the client was adversarial from the beginning. In these cases, even when we're delivering great results, the client is still looking for reasons to be unhappy with the work you're doing. Not only is this demoralizing to us as business owners, it's tough on our employees and can poison the corporate culture. One of the things we've agreed to as we evaluate leads is that we only want to work with clients who see us as partners rather than simply vendors.
• How they treat their employees. If a company that you are considering working with doesn't treat their employees well, they probably aren't going to treat your or your staff well either. In addition, they will likely have a bad internal culture, which makes implementing inbound marketing really tough. One way to learn more about how a company treats its employees is to do research via online sites like Glass Door (www.glassdoor.com). Glass Door is kind of like Yelp in the sense that people can post reviews of a business, only in this case they are posting reviews of their employers and what it is like to work there. We've gotten a few leads that had pretty awful reviews on Glass Door and we decided, based on that information, that it wasn't worth pursuing opportunities with companies that have such poor relationships with their employees. This is something we plan to use more going forward, and I recommend you take a look at it the next time you get a lead. You never know what you'll find...
• Whether they are willing and able to pay a fair price for the work you are doing. We've had experiences where we were in a retainer relationship with a client and wound up doing 200%+ the amount of work that was budgeted under the retainer. The reasons for this could be scope screep or that we priced the retainer wrong in the first place, but regardless of the cause, the solution (if you want to run a profitable business) is to go to the client, present them with this information (which in our case was easy to do because we use TimeFox to keep track of billable time), and either reduce the scope or increase the retainer. In one recent case, we did just this and discovered our client wasn't willing to pay more but also wouldn't agree to a reduced scope. Long story short, it wound up being the end of our working relationship. While it is always painful to walk away from revenue, the reality is that a deal in which you are losing money is a bad deal. For us, all the extra time our staff was putting in to this client was time they couldn't put in to other clients who were willing to pay for our services. Think about your own clients and take a hard look at whether they are paying you enough. If not, are you willing to walk away?
• Whether the client's expectations are realistic. There are a couple of dimensions to this. In our case, because we deliver inbound marketing services, client expectations generally revolve around visitor traffic growth to their website and lead generation. Expectations surrounding traffic and leads can be flawed in two ways: 1) the client might expect an outcome that simply isn't realistic within the timeframe of the contract; and 2) the client might have realistic expectations, but if they aren't willing to do their part (ie. contribute to content creation and review and provide feedback on content the agency creates in a timely manner), we won't be able to deliver. In either case, it is critical to identify these red flags right from the outset and reset the client's expectations before you start working together. Incorporating these discussions into your sales process is a good way to spot these issues early on.

NOTE: In the podcast, Kathleen mentioned the book The Challenger Sale, which is definitely worth reading if you are interested in resetting client expectations as part of the sales process.

HubSpot IMPACT Awards

The team here is excited about HubSpot's upcoming INBOUND conference, which will take place in Boston September 8 to 11. This year, Kathleen is speaking as part of the Partner track. We're all registered and would love to see you there. If you don't already have a ticket, use the code SPEAK@INB to get 25% off the cost of an All Access Pass - and do it soon, because hotel rooms are going fast. If you ARE planning to be there and would like to set up a meeting with someone on our team, just click here and we'll be in touch to get it scheduled.

Another reason we're excited for this year's INBOUND conference is that one of our client projects has been nominated for a HubSpot IMPACT Award (and was already chosen as a Finalist in the People's Choice category). The work we did for Chesapeake Eye Care is a great example of how inbound marketing can get results for small, local businesses and if you want to learn more, you can read about it on our blog or download the case study.

Finally, a favor to ask...

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