Let me ask you this: have you ever felt that in order to get in the door at a big company you should offer to do a test or a trial run or a very small project in order to prove yourself to them?
I actually had an experience like this only a few years ago, long after I should have known better, right? I was working with a big—make that huge—franchise training company, an international company. I had connected to them through both their corporate side and their franchisee association. After many months of working with their joint program development committee, there was a plan to introduce The Whale Hunters Process to their franchisees through a series of workshops with multiple franchise teams attending each workshop. I was able to negotiate a small customization fee, upfront, from the corporate people to design the program. In exchange, I deeply discounted the workshop fee per franchise by permitting five to seven teams to attend together. At every step of the negotiation things were slow, and they were cheap.
But there were to be at least two more workshops in the first 3-month period, and afterwards a license agreement, and a train-the-trainer agreement, and more serious conversations about the long-term possibilities.
And then a new senior VP of sales was hired, and to make a long story short, the project was dead. Meetings were scheduled and promises were made over a period of months, but nothing more ever happened and it was simply dead. I left my intellectual property unprotected inside of that company and there’s not a thing I can do about it.
The Whale Hunters have a saying, “If you go in the small door, you’ll stay in the little room.” We also call this phenomenon “The earn-it Trap.”
First Big Mistake: Earn It. The first big mistake that people like us make trying to get in the door to a big company is to cut a deal to prove ourselves before the “big deal” comes along. Here’s what was wrong with the deal I just told you about.
- It was too cheap.
- I didn’t have the proper protection for my IP—no license agreement up front.
- No written commitment for what the “proof” would consist of—if this, then that.
- No contract for the whole deal!
So basically, everything was wrong with it from my perspective! I was kidding myself.
So many sales gurus will give you this advice and it is almost always wrong, wrong, wrong.
This happens to my clients when they are working with a local or regional branch and they want to move to national. Especially in retail operations and franchise operations. They are usually totally different buying groups, with totally different criteria. There is virtually no overlap of who they choose to buy from. For example, corporate marketing teams rarely do business with the same companies who sell to the regional marketers. Yes, there’s a snob factor at play.
Second Big Mistake: Cut Your Price/Offer a Discount. Related to the first one, this mistake dilutes your value proposition and commoditizes your offering. It’s a fatal mistake from which you cannot recover. If the company is only buying on price, you can’t compete there. Only big companies can make money by competing on price; small companies can’t. If not, you will get pigeonholed as “the little company that does this little thing for this little price.” They will never be willing to pay more than they pay the first time. Look for a company that wants something else from you. Find a company that wants innovation, attention, speed, agility, integrity—not price.
Third Big Mistake: Lead from a Weak Position. This is a tricky one, so please don’t misunderstand me. Don’t assume they are only interested in the special set-aside value of a woman-owned or minority-owned or veteran-owned business. Yes, they need those businesses in order to meet government requirements in certain instances, but more than that they need capable, competent small business vendors. Many big companies work hard to nurture small business suppliers because they want to be good citizens. They want the advantages that you can offer. Learn what your advantages are and how to overcome the fears that big companies have in dealing with small company suppliers. Talk to Procurement Officers about your set-aside status. Talk to end-users about how you will solve their toughest business dilemmas.
So there you have it. I never want to see you in the position of the one who’s only called at the last minute, or only when they haven’t got the budget for someone they’d prefer, or only when the work is tactical, never strategic. You need to be positioned to grow in stature and responsibility and trust, and that only happens when you go in the right door to do the right work at your right price. Yes, you have to start somewhere. But make sure somewhere isn’t a dead-end corridor.
Have you had any experiences like mine? Post a comment below!
If we don’t value our offerings, then our clients won’t either. They place as much value on our solutions as we do. As a Tier 2 automotive manufacturer, we still give away design services (to some degree) with the expectation of taking on full production. We are beginning to change this approach to ensure we protect earnings in case the deal gets cancelled AND to actually assign value to our “Value Proposition”. . . good article. Thanks!
You are so right, Mike. That’s a perfect way to look at it! Thanks for commenting.