Avoid This Rookie Mistake If You Sell Business to Business

Avoid This Rookie Mistake If You Sell Business to Business

Mike Armour

Let me invite you to join me on a recent journey that did not turn out well for my business. There's a lesson in it for all of us, especially those who own a business (or may be starting one) which sells services to other businesses.

About five months ago I received a phone call from a prospective client who had been on my coaching web site. The voice on the other end of the line identified herself as an HR representative for a well-known restaurant chain. "We need some help with leadership development," she said.

She went on to explain that the company has been mushrooming, adding a dozen or more franchises each month. This has compelled the owners (it's a privately-held business) to expand the top management team quickly and extensively.

"We're just no longer on the same page as a management group," she lamented. "I'm looking for someone to coach about eight to ten of our top executives and bring us together."

After ten minutes on the phone, we agreed to a meeting at corporate headquarters, which was only minutes away. We were to be joined by the head of HR, the person who would make a final recommendation to the CEO.

The Appointment

When I arrived for my appointment, an apologetic receptionist asked me to wait 15 minutes. "They are in a meeting that is runing unexpectedly long," she said. "No problem," I answered, and took a seat in the lobby.

Fifteen minutes went by. Then twenty. Then thirty. Just as I was about to suggest that we simply reschedule, the woman who had called me appeared in the doorway.

She apologized for the delay and asked me to follow her to a conference room. As we were sitting down she said that her boss would be unable to join us. The principal owner had asked her to join him immediately for a pressing matter.

Experience has taught me that this was now not a good situation. You never want to make your primary sales pitch without the ultimate buyer in the room. If you make that mistake, things rarely turn out well for you.

But what was I to do at this point? We were already seated in the conference room. And she was telling me that they wanted to move quickly to get the coaching process underway.

After a quick inner deliberation, I decided to proceed with the meeting. This woman had been with the company for 17 years, or so she told me in the initial phone conversation. And since in those early years it was still a small, family-run business, I presumed that she had pretty good relationships, connections, and credibility with decision-makers in the company.

So choking back my temptation to ask for a postponement, I went ahead, assuming that a further appointment with the HR director would follow later. Bad assumption.

The Meeting

Overall, the meeting itself went well enough, although I quickly learned that my interviewer was not familiar with the process of executive coaching. She asked me to explain several terms, including the names of some assessment instruments that are widely used in the HR world for executive development.

Fortunately, she quickly warmed to my ideas. By the end of the meeting she was genuinely enthusiastic about working with me.

As you might expect, she asked for my price as the meeting moved toward a conclusion. A second rule of thumb is that you never quote a price until you have talked to the ultimate decision-maker. So I side-stepped her question as best I could. I told her that I would need more specifics before I could establish a price. But I quoted her a fairly broad range within which the price would probably fall.

Two days later I made another trip to corporate headquarters to leave off information that she had asked about. And I kept angling for an appointment with the HR director, to no avail. Her schedule just would not permit it.

Two weeks went by and I heard nothing. I therefore assumed that they had either dropped the coaching idea altogether or that they had decided to go with another firm.

The Proposal

Then the phone rang again. It was the woman with whom I had met. She outlined the revised scope of the engagement as they had finally defined it and asked me for a full proposal within 72 hours.

The next day I took my proposal to her office, only to find her unavailable. So I left the proposal with the receptionist (who by now was recognizing me by name) and left suspecting that I would not meet with the HR director before a final decision.

Sure enough, that proved to be the case. Five days later my friend called me again to discuss my proposal and report on their decision.

Now, before I continue, I should mention that I had put a pretty sharp pencil to the price when I wrote the proposal. On my scale of rates, I had given her a bargain-basement price, actually over $1000 less than the low end of the range which I originally quoted.

"I'm really excited about the possibility of working with you," she began. "And we are ready to commit to you if you can do one thing." She then explained that they had interviewed several other coaches. "On the basis of those interviews, we're ready to go with you if you will provide your services for …"

The Let-Down

The next words out of her mouth translated into a 50% reduction in the fee that I had given her. Needless to say, the next words out of my mouth were, "No, I can't do that." And you will not be surprised to learn that I've heard nothing further from her company.

But I did glean this much information from the conversation. The decision to ask me to meet this price came from the CEO and the HR director, neither of whom I had been able to meet. To them I was just another proposal on their desk. There's even a likelihood that one or both of them had met personally with other candidates in the mix. If so, then there was a personal relationship with my competition which the CEO and HR director did not have with me.

By hindsight I should have been more aggressive in getting an appointment with at least the HR director, if not the CEO. It was a genuine mistake not to do so, and a costly one at that.

The Take-Away

The lesson to take from this is to realize that the party who interviews you initially for a possible contract is rarely the final decision-maker. Learn early who will make the final decision, then do everything that you can to get in front of that person, sooner rather than later.

This is not always easy. Ultimate decision-makers have often protected themselves with layers of gate-keepers to hold people like you and me at bay.

In the event that you are stiff-armed in trying to meet the decision-maker, go as high up the food chain as possible and get a face-to-face meeting. Otherwise you are reducing yourself to a commodity on a piece of paper. The decision-makers won't have a sense of who you are and the unique contribution which you bring to their organization. And once you are perceived as a commodity, price is the driving determinant as to who gets the business.

I can't remember the last time that I lost a contract to a competitor when I met face-to-face with the ultimate decision-maker. By contrast, when I can't effect that meeting, my batting average is well below 50%. No matter how good you and your proposal look on paper, you look your best when you appear in person.

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