Sometimes things just aren't meant to be. We've all been there-you meet a person and think a great relationship is on the horizon, only to discover after you've peeled back the layers that, perhaps, it just wasn't meant to be.
This happens in business all the time. But often we only think about it in terms of why the customer doesn't select us, or why a customer has broken up with us. Being dumped by a client is a bitter pill to swallow... it's a blow to both our ego and our bottom line.
We rarely consider the fact that we too have choices in whether to continue a relationship with an existing client, or even refuse a new client. The truth is that not every prospect is a match for our business. Sometimes it is as simple as being too expensive for a prospect, and in cases like this, you may want to refer the prospect to another firm. But in many cases, a prospect can be detrimental to a business
This happens in business all the time. But often we only think about it in terms of why the customer doesn't select us, or why a customer has broken up with us. Being dumped by a client is a bitter pill to swallow... it's a blow to both our ego and our bottom line.
We rarely consider the fact that we too have choices in whether to continue a relationship with an existing client, or even refuse a new client. The truth is that not every prospect is a match for our business. Sometimes it is as simple as being too expensive for a prospect, and in cases like this, you may want to refer the prospect to another firm. But in many cases, a prospect can be detrimental to a business
Evaluating a New Client
There are many questions you want to ask yourself when evaluating a new client:
Does the client's mission align with your values?
This is a very important consideration. Quite a few times, we have had the opportunity to perform work for organizations that I fundamentally couldn't support. One example is the tobacco lobbyists. Several years ago, a pro-tobacco lobbyist wanted to hire us to do marketing and outreach. There was just no way I could accept this work. As a mother, I work hard to educate our kids about the dangers of smoking. I fundamentally oppose everything that this group is trying to accomplish.
Do you want to help the client achieve their goals? Do you believe they can accomplish what they are trying to do?
We've had potential clients contact us to design and develop training programs to achieve objectives that we did not think were realistic. In one particular instance, the money was very good, and I'm sure they found a company to perform the work. But we did not see the link between the client's vision/objectives, and the training they wanted. It was just too much of a stretch. So we declined the work, not only because we couldn't buy into it, but also because we believed it would have set us up for failure.
Does the client's needs align with your competitive differentiators? (price, quality, speed, etc.)
No company can be all things to all people. Some customers are looking for the lowest price or quickest turnaround. In cases like that, we are not a match. So we decline this type of work.
Will the client infuse chaos into your organization?
Some client organizations are very chaotic. While "managed chaos" can be productive, "unmanaged chaos" can be detrimental. Clients that don't respect our processes, our people, or our culture won't be happy with our service.
Can the client afford your service?
When we first launched 14 years ago, low price was definitely a competitive differentiator. This is often the case with new businesses because they don't have the overhead that accompanies growth. In addition, new businesses are working to build their client base, and establish their presence and credibility. Mature businesses follow a completely different business model, having migrated from a price-oriented service to a value-oriented service. If a customer can't afford our service, it's not a match from a short-term and long-term perspective.
Is this a one-time client? And if it is, does that fit your business model?
For our business, one-time clients are not good investments. Many small businesses get trapped in the cycle of working with one-time customers, which forces them to live the life of a gypsy... constantly moving from one client to another. So much energy goes into acquiring the knowledge about a customer, and building the relationship. It is the same level of energy for one-time client or a repeat client. But with a one-time client, you don't have additional business when the project is over.
By taking on the client, are you in any way compromising the perception of the value you provide?
This is a really important point for Information Experts. We are on several government-wide area contracts (GWACs) that many agencies like to use. We also hold multiple GSA schedules, and we are 8a-certified, which are also gateways to specific opportunities. Many organizations that have these contracts, schedules, and certifications do "pass-throughs," which enable companies that lack these gateways to work with government customers. They see these pass-throughs as opportunities to make "easy" money (by charging an administrative fee) and to get into an agency. But I don't view pass-throughs in such a positive light. While there are some rare exceptions that warrant a pass-through, I believe pass-throughs ultimately diminish the value of our organization. Our role is basically reduced to one of a contract administrator, and often creates a situation in which we are unable to demonstrate the value we can bring to our client. In addition, there is risk associated with being a passthrough because ultimately as the prime contractor, we are responsible for delivering - even though we are not performing the work.
Is the prospect's requirement aligned with your core competency?
Like so many companies, we've discovered business opportunities that look great on the surface, but once you start digging, you realize that there are many other companies that can perform the work better than you can. I don't believe that a company can be all things to all customers. By sticking with your core competencies, small businesses have an opportunity to build a reputation of dependability and expertise in areas in which they really shine.
Is the client in an industry you currently support, or want to support?
Sometimes great work comes along that is right in your sweet spot and in the industries you serve. And sometimes work comes along that you are able to do, but it is in an industry that you know nothing about. At this point, businesses need to determine whether they want to invest the money and resources required to branch out into that industry
Does the client's mission align with your values?
This is a very important consideration. Quite a few times, we have had the opportunity to perform work for organizations that I fundamentally couldn't support. One example is the tobacco lobbyists. Several years ago, a pro-tobacco lobbyist wanted to hire us to do marketing and outreach. There was just no way I could accept this work. As a mother, I work hard to educate our kids about the dangers of smoking. I fundamentally oppose everything that this group is trying to accomplish.
Do you want to help the client achieve their goals? Do you believe they can accomplish what they are trying to do?
We've had potential clients contact us to design and develop training programs to achieve objectives that we did not think were realistic. In one particular instance, the money was very good, and I'm sure they found a company to perform the work. But we did not see the link between the client's vision/objectives, and the training they wanted. It was just too much of a stretch. So we declined the work, not only because we couldn't buy into it, but also because we believed it would have set us up for failure.
Does the client's needs align with your competitive differentiators? (price, quality, speed, etc.)
No company can be all things to all people. Some customers are looking for the lowest price or quickest turnaround. In cases like that, we are not a match. So we decline this type of work.
Will the client infuse chaos into your organization?
Some client organizations are very chaotic. While "managed chaos" can be productive, "unmanaged chaos" can be detrimental. Clients that don't respect our processes, our people, or our culture won't be happy with our service.
Can the client afford your service?
When we first launched 14 years ago, low price was definitely a competitive differentiator. This is often the case with new businesses because they don't have the overhead that accompanies growth. In addition, new businesses are working to build their client base, and establish their presence and credibility. Mature businesses follow a completely different business model, having migrated from a price-oriented service to a value-oriented service. If a customer can't afford our service, it's not a match from a short-term and long-term perspective.
Is this a one-time client? And if it is, does that fit your business model?
For our business, one-time clients are not good investments. Many small businesses get trapped in the cycle of working with one-time customers, which forces them to live the life of a gypsy... constantly moving from one client to another. So much energy goes into acquiring the knowledge about a customer, and building the relationship. It is the same level of energy for one-time client or a repeat client. But with a one-time client, you don't have additional business when the project is over.
By taking on the client, are you in any way compromising the perception of the value you provide?
This is a really important point for Information Experts. We are on several government-wide area contracts (GWACs) that many agencies like to use. We also hold multiple GSA schedules, and we are 8a-certified, which are also gateways to specific opportunities. Many organizations that have these contracts, schedules, and certifications do "pass-throughs," which enable companies that lack these gateways to work with government customers. They see these pass-throughs as opportunities to make "easy" money (by charging an administrative fee) and to get into an agency. But I don't view pass-throughs in such a positive light. While there are some rare exceptions that warrant a pass-through, I believe pass-throughs ultimately diminish the value of our organization. Our role is basically reduced to one of a contract administrator, and often creates a situation in which we are unable to demonstrate the value we can bring to our client. In addition, there is risk associated with being a passthrough because ultimately as the prime contractor, we are responsible for delivering - even though we are not performing the work.
Is the prospect's requirement aligned with your core competency?
Like so many companies, we've discovered business opportunities that look great on the surface, but once you start digging, you realize that there are many other companies that can perform the work better than you can. I don't believe that a company can be all things to all customers. By sticking with your core competencies, small businesses have an opportunity to build a reputation of dependability and expertise in areas in which they really shine.
Is the client in an industry you currently support, or want to support?
Sometimes great work comes along that is right in your sweet spot and in the industries you serve. And sometimes work comes along that you are able to do, but it is in an industry that you know nothing about. At this point, businesses need to determine whether they want to invest the money and resources required to branch out into that industry
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