I was talking to an entrepreneur the other day who is in the software development business. His company builds cloud applications and provides professional services to deploy the software. As we were discussing how we do business, I discovered that we shared a similar philosophy regarding RFPs: requests for proposals.

We don’t respond to them. I knew our reasons for doing so, but I was curious to understand why he took the same approach. He told me an interesting story about how, early in the life of his company, they worked really hard to win a sizable RFP. They did a lot of research and filled out the RFP exactly as the prospect requested. They were sure the prospect would love it. They made a beautiful slide deck and waited patiently for the call to go to the next round.

But the call never came. Instead, the prospect ignored their proposal. When my friend tried to follow-up, he was met with radio silence. Lesson learned? He said to me – “I now know what it feels like to be first-runner-up. I think they probably already had chosen a provider and simply needed two more bids to fulfill their quota. What a waste of time.”

I had a similar experience shortly after I founded my company. But that’s not the only reason we do not respond to RFPs. Quite frequently we see RFPs that are a fishing expedition to get free consulting. Now I’m not opposed to giving away free consulting. I do it all the time by way of our thought leadership materials. But we never start consulting on a prospective client’s unique situation until we are deep into dialogue and have established some ground rules.

That’s how we manage the complex service sale. We get buy-in and ever-deeper levels of commitment as we progress through the stages of dialogue.

The RFP is just one example of the many ways that the service sale, and particularly substantial consulting engagements, can become quite complex. You’ve probably heard of the complex sale. But you may not have heard about the complex service sale. That is a different animal altogether.

Service-based organizations who figure out how to win the complex service sale on a regular basis accomplish some pretty amazing outcomes. They increase profits substantially. They break the feast-or-famine cycle that plagues so many service firms. They grow at a pace that they choose, not necessarily what the market dictates. They focus on fewer clients and they handsomely reward stakeholders. These are the benefits of winning the complex service sale. Let me show you how to do this.

Key Take-Away:

The complex service sale can be just as common for small and medium-sized service firms as it is for large firms.

Woman looking out a window

The Complex Service Sale

The complex sale, as a concept, has been around a long time. I learned it back in the 1990s when I went through the Miller-Heiman strategic and conceptual selling courses. The characteristics that mark the complex sale often include:

  • A long sales cycle that has to proceed through numerous stages, sometimes lasting many months or even years. 
  • Large dollar amounts involved in the sale, typically multiple millions over multiple years.
  • The necessity of creating buy-in at each stage to move on to the next stage.
  • A willingness to participate in dialogue and in discovery processes that yield insights into the motives of differing stakeholders. 
  • Multiple decision-makers and decision-influencers who have to be satisfied and who often have differing, even sometime opposing, agendas.
  • Differing roles such as technical buyers, economic buyers and executive buyers.
  • The necessity of a master service agreement that usually has to be vetted and put in place before a first purchase order.

So these are characteristics that are common to the complex sale. But the complex sale is not the same as the complex service sale. What makes them different?

The complex sale is typically handled by business development executives at product-based companies. More often than not, once the terms of the complex sale are worked out, they start shipping products from a warehouse.

When you are a service-based business, you have no warehouse stacked with widgets. Instead, you have people. That makes your sale totally different. How so?

When a prospect is thinking about buying in volume from a product-based company, their decision will be based on their confidence in the company itself and in their products. They’ll ask themselves questions like:

  • Is the company financially solid?
  • Do they have a sound reputation?
  • Are the products well-designed and reliable? 
  • Can they ship product in the volume that we require?
  • What kind of support will we receive from their staff to iron out issues quickly?

But the questions asked by buyers of the complex service sale will be quite different:

  • Does the company we are considering have a good reputation? 
  • Do they have a demonstrated history of solving the kinds of problems that we need solved?
  • Who else have they solved these problems for and what were their outcomes? 
  • What is their recommended approach to achieving our goals? 
  • How confident are we that their recommended approach will actually produce the outcomes that we desire? 
  • How confident are we in the people that they will assign to our account? What are the backgrounds, experience and expertise of these people? 
  • How can we be sure they won’t put senior people on the sale and junior people on actual delivery? 
  • How can we ensure that invoices and deliverables actually align so we’re not paying for services we have not received?

To boil this down to a simple formula, I now think of the complex service sale as close scrutiny of your firm, outcomes, people and approach. To win these larger deals, you need to satisfy stakeholders who will carefully look at these four items.

 

Not Just For Big Companies

Before I demonstrate how to consistently win the complex service sales, I want to address a concern that might be lurking the in the back of your mind.

You might be thinking that only very large businesses get to participate in these deals. But in my experience, the complex service sale is just as common for small and medium-sized service firms as it is for big firms. In other words, even if you’re not a great big company, you can still win the complex service sale and reap the rewards.

I routinely see small and medium-sized service organizations competing for complex service sales of two types: managed service plans and high-dollar project work.

Many organizations, especially those who want to even out their revenue, have begun to offer managed service plans. They package services into tiers such as bronze, silver, gold or platinum. It can be relatively easy to sell bronze packages where the dollar amounts are lower. But the sale of gold and platinum plans often begin to take on the characteristics of the complex service sale.

I also see this in project-based work that is high-dollar. I have multiple clients who provide services for a finite project where the service fees exceed a million dollars. Based on dollar volume alone, they have to demonstrate that their firm, outcomes, people and approach are top notch. 

 

The Stages Of The Complex Service Sale

Based on my experience, and my clients’ experiences, with the complex service sale, I typically see these stages, as presented from your point of view:

  • You enter initial dialogue to determine whether or not there is a fit with the prospect.
  • The prospect introduces key stakeholders based on their functional roles. 
  • You discuss fees for the overall services package to make sure all parties are in the same ballpark. 
  • You conduct discovery with key stakeholders to determine their win-results and lose-results.
  • You huddle with your team and analyze the prospect’s goals: how realistic these are compared against budget, timeline and resources. 
  • You conduct an internal strategy session to define your approach, the team you would assign to the deal and your projected outcomes.
  • You present your approach, people and projected outcomes to the prospect. 
  • The prospect huddles on their side and considers what you presented. Usually the prospect will come back to you with some requested changes. 
  • You refine your service package, timelines, milestones and projected invoicing schedule.
  • When all parties are satisfied, the agreement is papered.

While this may not be exactly how every deal progresses, this is a fairly common scenario.

 

How Not To Handle The Complex Service Sale

When a big deal comes around, the first reaction, especially among small-to-medium-size service organizations, is panicked excitement. People often refer to these deals as whales. The first inclination is to get the CEO involved. But I think this is a mistake.

It is often best to leave the CEO in reserve until you really need them. Bring in the CEO only at those moments when he or she can have the greatest impact, usually later in the process after the deal has been vetted and when executive presence is necessary to move to the next stage.

The challenge I see is that many small-to-medium sized service organizations do not have business development or sales staff who are appropriately trained in, or ready to navigate the stages of, the complex sale. The advice I’m about to deliver will help you win more of these deals. 

 

How To Consistently Win The Complex Service Sale

If you want to win more complex service deals, here are some key strategies to consider:

  1. Compare the prospect to your ideal client profile. 
  2. Be prepared to walk away from dialogue at any time. 
  3. Go into dialogue looking for a fit, not a deal. 
  4. Discover the lay of the land as quickly as possible. 
  5. Give, then get something in return – usually a commitment.
  6. Uncover their Why and arrange your service portfolio to address it. 
  7. Leverage your proof statements like case studies and documonials. 
  8. Map out your project deliverables against timelines and milestones that matter to the client.

Let’s explore these ideas in greater detail.

 

The Fit Matters

The first thing I advise, when a sizable deal comes around, is that you compare the prospect to your ideal client profile. Is there a match? If there is not a match, you might find it very hard to win that deal and this could result in a lot of lost time and energy on your part. Remember that complex service sales typically require a lot of time. You want to be careful about where you invest your time.

If you’re not sure what I mean by an ideal client profile, then I recommend that you register for our blog and check out the articles I’ve written on this topic.

The second thing I recommend is that you set your mind to the default position of – time will tell whether or not we win this deal. Don’t seal your hopes on winning the deal. Don’t appear to be too eager. This actually puts you in a weak position in the negotiations. I’ve come to think of this as an attitude of interested indifference. In so many words: I’m interested if the deal is right and if not, that’s okay too.

You have to be prepared to walk away from dialogue at any time. One of the biggest mistakes I see service organizations make is staying too long in these deals when the tell-tale signs are there that it’s not going to work out. This usually happens because someone somewhere begins to see this deal as one they absolutely must win. If the deal doesn’t feel right, it’s probably not right for your firm.

I also recommend that you go into dialogue looking for a fit far more than a deal. The money is a given. If you win the deal, you’ll make money. What is not a given is whether or not your organization and the prospect’s organization will work out long-term?

The wrong fit, even if you make a lot of money, can actually hurt your organization far more than it helps you. This can lead to staff turn-over, reduced quality of life and even lower service levels to other clients with whom you may have long-standing and trusted relationships.

I know of service organizations who have won sizable deals only to have seller’s regret later on – primarily because of fit issues.

Patrick Lencioni has written a great book called The Advantage. This book talks about the importance of company culture and organizational health. I think his point is well made. We utilize a framework for helping our clients develop a profile of their ideal clients. Our framework includes 7 characteristics. Two of these, culture and chemistry, are directly related to the fit. So if you want to win more complex service sales, focus on the fit.

 

Navigating The Deal Landscape

I recommend that you take control of the overall process. One of the biggest mistakes you can make is allowing the prospect to control things. I strongly recommend that you set expectations about how you navigate these types of deals. Map out your approach to how the dialogue should proceed and get the prospect’s buy-in to your approach. If you cannot agree on this, that’s a red flag from the beginning. It’s probably best to walk away.

The reason I say this is because some organizations will try to get a lot of free consulting from the sales process. For you to win the deal, you will likely have to do a certain amount of free or very low-fee consulting. Usually this is around two critical parts of the process: discovery with key stakeholders and your approach.

In addition to outlining your approach, you’ll also have to explain why you believe your approach will actually produce the outcomes that matter to the client. These insights are inherently valuable and you should guard them. Don’t just give them away.

This is why I recommend that you take two key steps early in the process. First, discover who the real decision-makers are, those who wield real power, and make sure you are listening very carefully to them. Second, never give away something valuable, like your insights, without getting something in return.

What should you ask for? I recommend that at the end of every stage you get verbal commitment from a powerful decision-maker that you are moving in the right direction and that they are still considering you in good faith. I also recommend that you ask about competitors who are vying for the same opportunity.

If they will not give these two items, this should be a red flag to you. Any prospective buyer who is negotiating in good faith will recognize how much time and energy you are putting into the deal. If they do not value your time and award it with information before they become your client, don’t expect that they will value your time later on, after they become your client. 

 

Positioning To Win

To ensure a successful outcome, I recommend these three steps for after the discovery process:

  1. Uncover their Why and arrange your service portfolio to address it.
  2. Leverage your proof statements like case studies and documonials. 
  3. Map out your project deliverables against timelines and milestones that matter to the client.

Most service organizations believe that clients choose them because of what they do. I don’t believe that. They don’t choose your what. They choose their why.

Clients choose you because of the outcomes that they believe you will produce for them. The outcomes are their why: why they are awarding you the business in the first place. This is the reason you have to uncover their core why as soon as possible.

In the complex service sale, this is not entirely obvious. When you interview multiple stakeholders, you are likely to hear multiple whys: why they are considering spending money at all. Why do they want to make a change?

I’ve conducted interviews with department heads at certain organizations. I’ll often ask them the same question. Why do you want to achieve this goal? The answers I hear are often vastly different. But usually there is a theme that unites most answers together.

To be successful in the complex service sale, you often need to get the differing stakeholders to agree on a common why. Once you do this, then you can begin to arrange your service package and approach to achieve that why.

But this is also where proof statements can be incredibly valuable. You’ll recall a few moments ago that I said buyers will ask the question: who have they done this for and what were their outcomes? If you have powerful proof statements that closely resemble the desired outcomes of your prospective client, you probably win that deal.

However, one of the inherent dangers of the complex service sale is the length of time it takes to achieve the outcomes. This is why I recommend that you map out your project deliverables against timelines and milestones that matter to the client.

I prefer to use Gantt charts that show the various phases of deliverables and how these map to certain dates. This makes it easy for a prospective client to see how your invoices and deliverables will be tied to realizing their why.

 

A Caveat

Winning complex service sales feels great and it can make your organization very profitable. But there is a downside you have to carefully consider. I believe that no client should constitute more than about 30% of your annual revenue and no more than 20% of your annual profits.

I’ve known of service organizations who have become entirely too dependent on too few clients and this makes them unstable. If the big client goes away, it is devastating to their firm. So be careful what you wish for.

However, winning a sizable deal or two can also be the gateway to acquiring great new talent, especially sales and marketing talent who can help you balance your client portfolio.

If you want to win more complex service sales, I recommend that you carefully consider the strategies I’ve recommended here. They will really help you. For even more great ideas about how to grow your service firm, please visit our blog site.