They Don't Like You, and They Don't Need You

Should we compete for this deal?

That’s a question many organizations should ask themselves more frequently. In many of the competitive pursuits I have been in, I often wonder why some of the companies bidding are wasting their money chasing a deal they can’t win. My guess is someone at that company got wind of the deal, and the client said to them, “We’d really like you to bid.” The company interpreted that to mean the client thought that they had a chance, when what the client was really saying was, “We want everyone to bid.” And why not? The more bidders for the work, the more leverage the client has in negotiation

A company needs to ask itself two questions before entering into a competitive pursuit for work:

1. Does the client know us, and like us?

2. Does the client need us?

The first question is one of trust and competency. A client never chooses the best service provider in a competitive bidding situation. The client chooses the service provider most likely to make them successful. Or, put differently, the client chooses the firm least likely to screw up.

For the client, choosing a service provider is an exercise in risk mitigation. No one wants to pick the service provider that can’t get the job done, and then explain to their leadership why they made that choice. It’s what is known as a “career limiting decision.” Years ago the saying was, “Nobody ever got fired for hiring IBM” because when IBM dominated the technology industry, it was always perceived as a safe choice. In order for you to be the safe choice, you must be the bidder who represents the least amount of risk.

To be seen as the least risky of all of the other Alternatives, you must have trust with the client. No trust, no deal. Think about it: would you hire a builder to work on your house if you did not trust them? Of course not. You’ll look for ways to gain some trust: Meet with the builder. Get references. Read reviews on various commercial sites. So if the client doesn’t know you, or doesn’t like your company (maybe there was a bad experience in the past), they will not hire you.

You can overcome that lack of trusted relationship, however, if you are fortunate enough to have one advantage: you’re the only one who has, or can do, what the client wants. In my business it’s rare for any one company to be the “only one” who can deliver what a client needs, but some of us are better at certain services than others, so you may be perceived as “the only one who can get this done right.” If so, you may overcome the lack of a trusted relationship.

But if the client has Alternatives who can perform the work as well as you, or maybe even better, then the client doesn’t need you. They can fulfill their requirements with one or two other competitors. In negotiation speak, we call this “assessing the client’s BATNA.” Their BATNA (best alternative to a negotiated agreement) is the company they can go to instead of you and still get the outcome they want, maybe an even better one. To win the deal, you must be better than the client’s BATNA.

Two simple questions: Does the client know us, and like us? And does the client need us? If the answer to both questions is “no,” then then client doesn’t like you, and the client doesn’t need you. You should move on, and put your resources to work on another opportunity.

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