It can be frustrating to lose a deal with your dream client, especially to an inferior competitor. You know full well that your client will be disappointed— not least because your client portfolio features plenty of contacts who that same competitor failed to take care of. But all is not lost: losing Round 1 can actually be a valuable experience.
Boutique business models— those offering high trust, high caring, and high value— face this situation more often than not. The boutique model is often difficult for clients to choose because they lack the experience to value the model, choosing a lower-priced solution since they think there is no significant difference (except price) between the two offers.
Here are a few reasons you shouldn’t give up or go away after losing a dream client to a competitor, especially one with a delivery model you know won’t produce value for the client.
Time Wounds All Heels
When your dream client chooses short-term savings over long-term value, you know that over time, they will be unhappy with their decision. The contacts who chose your competitor did so because they believed that the lower price would not compromise the results they needed. Much of the time, such clients choose a larger company because it gives them a sense of security, since “no one gets fired for hiring IBM.”
Meanwhile, your competitor gets the privilege of disappointing the contacts that chose them, exacerbating all the systemic challenges built into the client’s market and industry. Not only will this experience compel the client to change partners, but it will give them much more reasonable expectations in the future, thanks to your competitor taking off their training wheels.
Given the choice between being the first company to provide a product or service to an organization or meeting a more realistic and mature set of demands the second time around, I’ll take second place every time.
The Recognition of Value
By choosing your low-priced competitor, at least temporarily, your dream client will also learn how to recognize differences in value, not just differences in price. You may have done a yeoman’s job justifying the delta between the investment you asked your dream client to make and your competitor’s lower pricing.
You may have brilliantly explained the concessions they were accepting by insisting on a lower price than their solution would allow. But just like every mixed martial arts (MMA) champion loses a fight occasionally, even salespeople who do everything right can still lose big deals.
Yet again, the huge benefit that accrues to you comes courtesy of your competitor. They have provided the context necessary for your contacts to appreciate your higher price, mainly by underinvesting in the results they need. Tragically, reality doesn’t care about what you wish would happen! No solution can be improved by investing less, but often the amount of “extra” investment needed is far less than the client expected.
The Second Time Around
Once your dream client finally decides to cut their losses and reconsider your product, you are now dealing with what amounts to a new prospective client. The first time you competed for their business, they lacked the experience to make a good decision. They were also solving a different problem: how to acquire whatever it is you sell. The second time around, they must also solve all the problems that your competitor so helpfully provided them.
Fortunately, most contacts are far more mature for Round 2. The differentiation you tried to help them understand before, the one that was critical to the results they wanted, now makes perfect sense to them. The investment you asked them to make so that you could create the results and outcomes they needed, is now a necessity rather than a luxury.
Being disappointed by your competitor not only created a compelling reason for your client to change suppliers, but also likely made them a more reasonable client going forward, now that they know the real cost of a discount product.
Now, I’m not suggesting that you deliberately blow your first attempt to win your dream client. But that unfortunate outcome isn’t the end of the world, and it may even increase your odds of winning the client in the future. You just have to be patient while your dream client develops the knowledge, experience, and maturity to be a truly great partner.
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Filed under: Sales