A founder I work with received an RFP (Request for Proposal) from a large organisation in their ideal industry and asked me to help them work through it and decide whether to go for it or not.
It was a tricky one because on paper, it was a good opportunity. It ticked a lot of boxes:
- The right mix of services – all within the specialty of the agency.
- The perfect industry – one which they knew well and had lots of experience in.
- An RFP that was actually pretty straightforward and not overly complicated.
- Whilst the budget wasn’t super clear, there was enough to indicate that it wasn’t too small – far from it.
So, why was it tricky?
The contract and services were almost certainly too big for the agency to handle.
This particular agency works mostly with founder-led businesses in a specific industry – and they do a really, really good job of it.
But this RFP was from an organisation who were far, far bigger than their usual client. The RFP mentioned things such as account management, stakeholder engagement and business case planning.
These are all things that the agency is capable of doing, but it’s not aligned with how they work right now. A bunch of process and team changes would be required in order to service one client.
Oh but the budget was likely to be 3x/4x the usual budget that the client worked with – along with being a much longer contract.
Hence, this one was tricky!
I supported them and helped but I let them know that I didn’t feel like they should go for it. Mostly because of the potential impact on the founder who would likely have to shoulder a lot of the additional responsibilities themselves, at least for a while.
But, they went for it anyway.
They didn’t win.
And the founder’s reaction?
Relief.
Now, here is the important lesson here, which I want to dive deeper into today: when you’re relieved to not win business, it can be a signal of some deeper problems that you need to address – in a few different ways.
Let’s take a closer look.
Why the relief?
The contract in question would have been worth a huge amount of money to the agency – far higher (and longer term) than any of their existing contracts.
I’ve seen such contracts enable agencies to scale quickly and push through growth barriers far more quickly than they’d have done otherwise.
So, why the relief at not winning?
If we had to distil the reasons for feeling relief at not winning this contract, it comes down to escaping a huge amount of stress and pressure.
This is partly about capacity, because the team would have been taking on a huge client compared to all their other accounts. But it was also about existing processes and systems that just weren’t built for clients at this scale.
This reaction feels responsible and understandable. “We’re being realistic about our capacity. We’re protecting the team from burnout. We’re not overcommitting.”
These are fair reasons to be relieved about not winning a contract.
But the conversation that I had with the client when he told me about this didn’t just stop with me saying “you did the right thing, you didn’t really want it anyway.”
What we learned about the agency by happily losing a contract
It would have been easy to end the conversation there and move on.
Instead, we dug deeper about what this feeling of relief really told us about where the agency was at and what needed to be worked on.
Who our ideal client actually is (and isn’t)
The most obvious learning here was something that we kind of already knew as we read the RFP – this wasn’t the ideal client to be going after.
But – this isn’t always the case.
For example, there’ll be times when it is the right client for you, it’s just the wrong time – you’re not ready to service this kind of client just yet, but would love to in the future.
This happened multiple times at my own agency many years ago. Each “big” RFP that came along usually meant that we had to step up as an agency in order to service it. Yes, there were probably times when we weren’t quite ready, but we were on the way. The organisation behind the RFP was the right type for where we wanted to get to, so we went for it.
For the client I’m working with at the moment, this RFP really made them realise that this was the kind of organisation that they didn’t ever want to work with.
Not because the organisation themselves were bad! Simply because they’d built a way of working that lent itself to a certain size and type of organisation – so they wanted to stick on this path.
It helped reinforce who they do their best work for and that they are happy sticking to what they do best.
Which leads us onto the next learning.
What we’re prepared to change (and not change) about the agency
As mentioned above, it’s fine to change as an agency and adapt to new, bigger and different types of clients – as long as you want to.
If my client had won this RFP, they’d have needed to do a bunch of things:
- Putting in place a fixed account manager.
- Running weekly status calls for each service.
- Reporting exact hours spent across each service on a monthly basis.
- Having a very limited scope of targeting within paid campaigns.
- Very little creative control over ads and copywriting.
For ALL of their other clients, they operate with far more freedom and deliver excellent results because of that freedom. But the clients are far smaller companies who are happy to leave them to it.
Changing all of these processes and ways of working for just one (albeit a big one!) client would have led to a lot of problems.
When discussing this, we realised that losing the RFP taught us that we’re actually really happy with how things for current clients, so changing for this new type of client wasn’t something that we wanted to do.
As a result, we can double down on the current processes and systems that we have, knowing that they work well for the types of clients we want to service.
What sustainable growth looks like
Most agencies want to grow – there’s nothing wrong with that.
The mistake that many make is to be prepared to grow at all costs. Growth needs to be sustainable or it’ll end up breaking you.
If we’d won this RFP, we’d definitely have grown financially in the short-term. The growth box would have been ticked.
However it would have almost certainly led to stress and anxiety for the founder, along with the team at some point too. This would have led to other clients suffering as well and potentially leaving.
The learning for the client is that yes, they do want to grow – but by winning the types of contracts that they are already well placed to deliver well and do a good job on.
They don’t want to try and grow by winning any and all contracts that they can.
How sales qualification needs to be improved
Finally, probably one of the most obvious ones – the reality is that we should never have gone for this RFP in the first place. So moving forward, we can learn from this and have stricter qualification processes in place so that we only go for contracts that are the best fit for us.
One of the most effective ways to improve your sales conversion rate is to learn to say no to clients that you’re not a good fit for. This means that you can spend more time on winning the contracts that are a good fit – making it more likely that you’ll win them.