When you’re about to lose a client, sell them more work
In article 14 for The Consulting Balance, Mark shares how agreeing to a new client’s requirements, meant delivering a substandard service.
Imagine this… you’ve been working really hard to build your business and you feel like you’re getting it into pretty good shape. Through a respected contact, you get an opportunity with a company that could end up being a game changer for you. You get the gig. Then you screw it up.
This happened to us in 2017. We were in our first year with a potentially lucrative client we’d worked hard to acquire. Things weren’t going well and we had been summoned to a meeting with the CIO. We were fairly sure we’d be fired.
But before I get into what happened in that meeting, I’ll rewind a bit to set the stage. Through Ralph Szygenda (corporate IT legend and our trusted advisor) we’d been introduced to the CIO of a large California-based utility. Ralph had spoken very highly of Nexient and recommended that the team try our services. The CIO had worked for Ralph and saw him as a mentor, so in a way she was doing him a favor. We really couldn’t have asked for a better intro.
At this point in our development, we had started to focus on what we wanted to sell, but we would still flex to do whatever a sought-after client would ask for. Who wouldn’t right? In this case, they’d asked us to provide two on-site iOS developers. Unfortunately we didn’t have any in their area. Our model was that all of our engineering resources worked out of a delivery center in Ann Arbor, MI. But instead of selling them this, we agreed to provide them these two people. We figured we’d be able to get a master services agreement, which would set us up to sell lots of services to them over time. So it was definitely worth a shot.
At the time, iOS resources were in very high demand and the California labor market was much more expensive than the Ann Arbor market. We didn’t know if we’d have work for these developers long term, so we did what many services firms do - we brought on two contractors to meet this need. While you can find very strong developers who are contractors, many of the best want to be full-time employees. Choosing to use contractors in a tight, expensive labor market, and needing to find them quickly, meant we hired two people who were just good enough to do the job, but probably not likely to stand out.
If it doesn’t feel right, don’t do it.
Not too surprisingly, all kinds of issues ensued. The developers had extremely long commutes to the utility’s office. They were often late and left early. This isn’t great, especially in the early stages of a client relationship. Generally consultants want to be seen as working harder than their clients so a best practice is to come in early and stay late. These particular contractors didn’t really see themselves as part of Nexient. They saw us as a staffing agency (which I guess we were on this project). What’s more they didn’t go out of their way to promote us. In fact, they often did the opposite and promoted themselves as individuals. The worst issue though, was that they were just OK as developers. The client team had a number of strong people and they were looking for us to add equally great engineers. This was what led us to the brink of being fired.
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Because we'd been introduced by Ralph, we got the courtesy of a meeting with the CIO. Usually you’d get an email or a discussion with someone lower level. We knew she would be letting us go, and as gutting as this was, we chose to look at it as a great opportunity. Two of my best people attended the meeting and could see the CIO was disappointed things hadn’t worked out. They grabbed the opening to say that the reason our engagement wasn’t working was due to the client not engaging with us in a way that showed our strengths. They explained that our typical model was to put together a full product team (product management, UX, and engineering) in our delivery center. They emphasized that our best clients gave us responsibility over developing a product or application and that we’d be accountable for the success of the project.
Our closing door opened a new window
I was seriously amazed that this approach worked. We agreed to cut off the two on-site developers and the client gave us a shot at deploying our model instead. They selected an app that they needed developed and agreed to let our team take a run at it. We had gone from being fired from a small engagement to having sold a larger one in a model we were good at.
We developed an iPhone app that would automate the check out and check in of trucks used in the field by the utility. Before the app, employees would fill out a paper-based damage report when they got a truck and when they returned it (like you do with a rental car). We built an app that let them do this on their phone and capture photos to document what they saw. This saved a lot of time for the utility and was a huge success.
The impact of our team’s quick thinking in that meeting was enormous. We went on to build many more apps with this group and based on that success, the utility became one of our largest clients, representing about 10% of our revenue as we grew. We built applications that helped them manage challenges with wildfires and communications with customers during emergency outages. Their board praised our work which became case studies that allowed us to secure projects with multiple other utilities around the country over time. In fact our utility practice became one of Nexient’s strengths.
This was an uncomfortable, potentially embarrassing lesson in our journey to success, but I’m glad we went through it. This is what it taught me:
Never let clients talk you into offering a weakness. This is a classic challenge for small consultancies. You know what you’re good at, but a client asks you to help with something far afield from that strength. You need the revenue. You’d like to have that great new client. It’s easy to rationalize that you’ll figure it out along the way. It rarely works out well.
Sell your strength. The flip side of the first point seems obvious, but it's actually quite difficult to do. In the sales process, you need to proactively challenge your client’s assessment of what they need to get to the business outcome. We had more success with our team-oriented, delivery center-based model. We became better at taking a client request for staff augmentation and turning it into an engagement for a whole product team. It takes hard work to get the client to see it, but it usually ends up being a win for them and for you.
Don’t give up. It’s easy to hear from a client that you will no longer be their partner and simply accept it. While your odds are low, it’s always worth trying to find a way to fix the situation. It often means investing some resources at a discount or for free, but the long term benefit is worth it.
Plan areas to stretch. While you don’t want to offer a weakness, you do want to expand your offerings. We would identify new areas we wanted to move into and proactively invest in them. We’d bring on an expert to lead the new practice and then look for clients to work with. With the right investment, you can take relative risks to launch a new area for your firm if you know you’re going to work in an area that is aligned with your strategy.
