Yes, that Arnold Schwarzenegger.
He has a newsletter on beehiiv. So do Codie Sanchez, Jay Shetty, David Begnaud, Colin & Samir, and Joanna Stern.
They could publish just about anywhere. They chose beehiiv to build a direct connection with the people who want to hear from them most. And you can do the same, whether you’re world-famous or just at the start of your plan for world domination.
Read on: My website
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Building relationships in the professional environment is hard.
It takes time. It takes work. Consistent engagement. Effort.
Every market environment, every customer, and every opportunity has its own unique set of challenges and hurdles. Sales just doesn’t happen “out of thin air.”
Not everyone likes to do the relationship-building and working towards closing opportunities. It is easier for some, harder for others. Many love to complain about it. Many have no idea what really goes into it.
You name it, you need to do it. Phone calls, webinars, meetings at trade shows, referrals from champions, follow-ups, traveling to meet each other, presentations, the list goes on. Sometimes, a relationship moves faster; sometimes, it moves at a snail’s pace.
All this work you do in the background goes towards building trust, building interest, educating the other party on your solutions and how you can solve their problems.
Was this newsletter forwarded to you?
When you are building a new relationship from the start, that takes time and a considerable number of touchpoints to get to a potential opportunity with a new client.
And when you are focusing on an opportunity with a potential client, you do not want to strike out. You don’t want to burn a bridge you spent time building. You want to be able to control this as much as possible to build the relationship, and business, as much as possible.
Outside forces can disrupt the engagement and play a strong role in how you start your engagement with a new client. Whether it is that they want their voices heard, want to feel they are part of the process, are required for a bid submission, or something else,
What happens when outside forces, or senior management, do disrupt these relationships? What happens? How impactful can it be? We are going to dive into it here today.
Let’s dance.
Sales Owns Retention, Not Just Closed Deals
November 19th, 11am ET / 8am PT.
Pebl’s Chief Business Officer, Dutta Satadip, joins The GTM Garage to show how Pebl merged Operations and GTM under one leader, and how it aligned goals and incentives across the customer lifecycle.
You’ll also see how Pebl uses AI across that lifecycle and the stack behind prospecting, pipeline, and handoff to onboarding.
15 min conversation. 15 min open Q&A. For Seed to Series A teams.
Scenario
Here is a recent example. A client lost a $6 million construction contract due to leadership not listening to and understanding the opportunity presented by their business development manager. It would have been their first of many with this new account.
When the business development manager saw what leadership had done to the pricing, he knew the deal was over.
He also knew what it would do to the relationship. And he could not stop it.
Wait, Let’s Back Up
For twelve months, the business development manager had been building that relationship with a brand new account. The account holder and my client met at a trade show, shared contact information, and each went on their merry way. It was the start of a professional relationship and investment.
Ideas were shared with nothing asked in return. Met up at future trade shows, met up for coffee. White papers were passed back and forth. A few laughs along the way. There was no compelling event and no solicitation in sight. It was a patient investment in being useful to someone who might need each other someday.
Then someday arrived. After 12 months of engagement, the (potential) account holder realized they needed their services. The lines of communication were open, the customer was looking forward to the proposal, the business development manager had been building pricing for years, and a go/no-go review was getting teed up.
Then came the pricing.
Pricing
The business development manager had built the original bid himself. He knew the customer, the market, and the competition, and he told me his number came in lower than theirs.
How their sales process was setup and decision gates were established, this was their protocol. Management had the opportunity next.
Then senior management layered on additional overhead, ancillary items, and cost markups. The price moved out of the competitive range. Leadership had the final say before submission.
He was shocked, and he disagreed completely. He pushed back and was overruled. No reason ever came back to him for why the price had jumped.
He knew the proposal would lose on price alone, and he knew what that would do to any future with this customer.
Despite pushback on pricing, asking for clarifications on why margins were where they were, where these additional markups were coming from, why this, why that, the proposal now became too expensive, even as a first-time proposal or even as a recurring customer.
Time was ticking. He was working on the price conversation vs. the time to get this back to the customer.
He had to submit it at the price he was given.
Then…silence.
… and continued silence.
He asked for a follow-up with the customer and never got one.
A price outside the competitive range works like a no, delivered through a spreadsheet instead of a conversation.
Silence
What followed were really three silences.
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The first was inside the building. Leadership made the call and never explained it to the person who had to carry it.
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The second was outside. The customer was unhappy with the pricing and stopped returning his calls. Then the customer went with a competitor.
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The third was from within. All that work to get to this point. Leadership blindsided him, and the customer has silenced him as well. Getting hit in both directions. The reflection: where did he go wrong, and how does he not put himself in that position again? If he goes after the next opportunity with another customer, is he going to fall into the same situation again? Why burn the time, energy, and effort?
Think about where that left him. He had spent a year earning the right to those calls. Now he was trying to reach an unhappy customer about a price he had argued against internally, with no explanation from his own leadership to pass along.
The relationship between the business development manager and the account was disrupted. No new opportunities have come since, and getting back in has not been possible.
Optics
Leadership’s side deserves a fair hearing. There can be many reasons for the price jump in this case, because it was never shared with the person closest to the customer. But the usual argument is sound. Overhead is real, and someone has to cover it.
If the preliminary decision gates did not cover this, it is a chance to review what is covered in your decision gates as opportunities move through your sales process.
A first contract priced below full cost recovery can become the reference point for every contract after it. A company that chases every account at any price eventually runs out of margin.
Even if every one of those arguments applied here, the failure was not only the number. The reasoning stayed in the room where the decision was made. A pricing call that arrives with no explanation is an order, and the person who receives an order cannot defend it to a customer.
Blinded
The visible loss was a contract worth roughly $6 million over its life. The invisible loss was everything that account might have brought afterward, and nobody in that pricing meeting was weighing it.
This was the first attempt with this account. It was the moment a handshake was supposed to become business, and the relationship was the only asset the company had with them. Every week for a year, someone had been earning credibility from a person who owed him nothing. One pricing decision spent it.
There is research on how pricing and trust interact between business buyers and sellers. A 2014 Marketing Science study from Columbia Business School found that buyers in its dataset fell into two states
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a vigilant one with heightened price sensitivity and cautious ordering
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a relaxed one consistent with high trust
The seller’s own pricing decisions could move buyers from one state to the other.
Who was speaking for the customer?
I have always said business development is the customer’s representative and voice to a company.
When a pricing decision is made on elements such as margin and cost targets alone, nobody in the room is speaking for the customer. The people deciding have not sat across from the account holder. To them, the relationship is a line item. To the person who built it, it is twelve months of his own credibility.
That is how accounts get lost without anyone deciding to lose them. Nobody in that pricing meeting chose to hand a $6 million contract to a competitor. They chose a margin, and the account followed.
The question worth asking before you overrule
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If the person who knows this customer best tells you the number is wrong, and you overrule him anyway, what is your plan for the account if he turns out to be right?
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If the answer is that the account is replaceable, that is a legitimate answer. Say it out loud and own it. If the answer is silence, you were not making a pricing decision. You were making an account decision without knowing it.
Do not force too much, too soon with a customer, new or old.
Trying to take advantage of a new customer can backfire badly. It can destroy the work the relationship took to build, and another bite at the apple may not come for a long time, if it comes at all.
Before your next bid to a new account goes out, compare the final number to the one your relationship owner built. If the gap is bigger than you could explain to the buyer’s face, fix it before you submit.
When was the last time a pricing decision was made without anyone in the room who had spoken to the customer that month? Reply and tell me what it cost.
See you next week.
Whenever You’re Ready, Here are 4 Ways I Can Help You:
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Unlocking Hidden Potential – Reconnecting with Past Clients for Explosive Growth – Check out my free eBook on how you can find hidden gems in your past clients and help you crush your sales goals.
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AI for Business Development – Download our free eBook on how you can effectively leverage AI prompts to your advantage. From properly setting up your preferred AI tool, to how to shape your prompts, save time, and get the outputs you are looking for.
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Sales Resources at Your Fingertips – From tools, tips, demos, and how-tos, check out our Pages and content that can provide you with additional support, whether it be social selling, account management, or something else.
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Cribworks Advisor Program – Want more than just resources? Reach out to me and see if our Advisor Program can help you scale your business.
Pat Miller’s – Fridays Off Newsletter
One idea a week for people who own a business, from Pat Miller, founder of the Small Business Owners Community and host of Businessing. Every issue opens with what I did with my Friday, then works …
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