Chasing the Mega Deal: How to Know When a Huge Sales Opportunity is Worth Pursuing
Written by Rob Malec
Every business owner dreams about the mega sales deal that will make their year for them. It seems that these opportunities appear with some regularity, but they are not an easy fish to catch. The bigger the deal, the more the complexity, and the higher the competitive presence and downward pressure on pricing.
As such, they are less likely to fit nicely into the box that is your suite of products and services. Given their sheer magnitude they are the shiniest of shiny objects (and I’ve explained before about why chasing shiny objects isn’t a great approach to sales). In my work as a B2B Fractional VP of Sales, I counsel my clients to proceed with caution when a mega deal presents itself. Here’s why.
Why Think Twice Before Pursuing a Massive Sales Opportunity?
It’s been my experience that the complexity of mega deals requires a significant amount of upfront data-gathering, analysis, and implementation planning. Not to mention the time required to answer the myriad questions of the potential mega client and prepare formal responses and submissions.
The thing with time is that it’s a finite resource. Once it’s used up, it’s gone. Also, time put into one task means it cannot be put into another. If sales resources are limited and significant time is spent on large, complex deals that might not fit into your box, that time cannot be spent by your sales team looking for other deals that may fit readily into your programs and scale nicely in the future.
The downward pressure on prices and margins is to be strongly considered. The potential, of say, doubling your annual revenue is certainly alluring. However, if it costs you $1.05 to service every $1.00 of the new business then it’s significantly less appealing.
This is not to say that mega deals are not ever worth pursuing. Winning them can be a game-changer. It is to say, however, that careful consideration should be given to whether or not pursuing a huge sales opportunity will be a profitable venture and worth the considerable time and effort required to go after it. Just because you can pursue it, does not necessarily mean that you should.
5 Questions to Determine Whether a Mega Sales Opportunity Is Worth It
Here are some questions you can ask your sales team to determine whether it makes sense to pursue a mega opportunity in front of you:
- What is the effort estimate (in hours) for how long it would take to source, interview, narrow down, and select any special partners/suppliers/required new staff/machinery/resources to deliver on this deal, should you win it?
If large and complex deals don’t fit within your current suite of products and services, you may need to tool up and bring on partners and suppliers to help in doing so. Consider all the moving parts and put together your estimate of how much time would take to do so.
- What is the effort estimate (in hours) of how long it would take to work out the logistics of implementing and rolling out the project?
It may be that this mega sales opportunity stretches your resources and requires your team to do new things, or old things in new ways. What level of planning is required to meet the demands?
- What is the effort estimate (in hours) of how long it would take to prepare the bid/application and other paperwork?
Often these large projects are part of an RFP-bid process. Yours may be governmentally related. Often there is detailed documentation that must be responded to or submitted to be considered as a supplier. Scope this out to determine how much time it will take your team.
- What is the realistic/conservative revenue and profit margin related to this mega deal?
Calculate this monthly, quarterly, and annually. If you need to procure materials and partners and pay for them upfront, don’t forget to include that when you’re crunching your numbers.
- What is the realistic (conservative) percent chance you have of winning this deal?
Be brutally honest here. If this sales opportunity is large there are likely many competitors who are well-positioned (maybe more so than your company) to win the bid.
Answering these questions will help you understand the time and resource commitment required up front to put in a serious bid for the work. If you have the team, time, and resources to commit to preparing and submitting the bid, and your chances of winning are reasonable, then proceeding would make sense.
If going after a mega sales opportunity would drown your team and pull them away from servicing existing customers and finding new ones that fit nicely into your suite of products and services, maybe proceeding does not make sense.
As with all things, there’s a great deal of nuance involved in applying the principles noted above. If you would like to discuss this further, please feel free to reach out to me directly at [email protected].
