It was the week between Christmas and New Year's. We had just started shipping our first products a few months earlier.
It was dead as a doornail during the last week of the year. Web traffic was drying up. The phones were barely ringing.
But my commute to work took only fifteen minutes instead of the usual thirty! A lot of people were on vacation or forced shutdown.
It was catch-up time for me. I was in my usual mode of catching up and preparing for the next year.
Around 6:30PM, Adolfo, our VP of Applications, walked into my office. “Hey Brett, did you see the large opportunity from ‘Omega’?
“They want 100 samples of one of our products. I want to hand-deliver the parts tomorrow.”
‘Omega’ is a well-known company in the Silicon Valley. The opportunity was huge. Winning it would be a huge win for the company.
We usually gave three free samples to any customer, but Adolfo was right in wanting to give Omega exactly what they wanted. It was easy for me to agree with Adofo’s request.
So the next day Adolfo met with the Omega engineer.
Adolfo, who’s also a pretty good sales person, figured out that the customer was in a bind. The customer’s design was flawed, and they needed our product to be able to ship their new product.
In other words the customer had no choice: We were the only game in town.
The Omega engineer quickly evaluated our product in his prototype build. Within a week we received the first very large production order!
We were thrilled! What a great way to end the year!
Now let me give you the flipside of this story.
Another extremely well known company in the Silicon Valley, let’s call them “Beta”, requested some applications help with one of our products. We had Martin, our most senior applications engineer, help the engineers at Beta with the design.
The Beta opportunity was even bigger than the Omega opportunity. Winning this design would give us a big boost.
Martin, over the next several weeks, essentially designed Beta’s system around our product. We did a huge amount of work, and we felt like we were going to win a big opportunity.
We won the design, and we received orders for the first prototype.
“We’re in!” We thought.
We were pumped and excited. This was a high profile deal with a high profile customer that we would likely do a lot more business with.
We expected the production orders would follow shortly. I asked our sales manager, “When are we going to get the production orders?”
“Next week,” came the reply.
Next week came and the orders didn’t come.
We had been designed out according to our sales manager. I was pissed.
We had an ace in the hole. One of our board members knew Beta’s CEO.
So I called Cathal, our board member, and I asked for his help. Cathal reached out to the CEO, and, boom, we were designed back in.
The orders started flowing in again.
Then the orders stopped.
We were designed out again. And this time it was for good.
I called the VP Engineering of Beta, and I asked him to help us out. He said he would.
He called me back, and he told me we were designed out in favor of a “more mature” company. He went on to say they didn’t want to take any production risks.
The VP Engineering was gracious enough to tell me whom we were designed out in favor of. We looked at the specifications of the competitor’s part.
It was obvious why we lost:
The specifications of the competitor’s product were similar enough to ours. In other words, the customer had a viable alternative.
The Omega and Beta opportunities were two similar opportunities with two very different results. What was the difference?
Does the customer have a viable alternative?
There’s a formula to winning big customers when you are small:
Give your customers something they can’t get anywhere else.
Most of the time this means your product or service is so unique, different, and better. But there are other ways to win too:
A. You can ship and they can’t.
For example, let’s say your larger competitor is having trouble meeting customer demand. You can save the day with a similar product that you have plenty of inventory of. Or…
B. You have a flexible business model and your larger competitors don’t.
You’ve identified a better way to do business that is easier for your customers. Your competitors are stuck in the old way of doing things.
The key is doing something your larger competitors can’t do or don’t want to do.
Then you top it off by:
- Being super responsive, and…
- Going the extra mile by moving fast and providing extra support.
Did you notice what I didn’t talk about? That’s right, price.
The price was somewhat irrelevant to Omega because we essentially had a monopoly situation. But we wanted a long-term relationship, and we didn’t want to take any chances.
So we did give them a really good price because we wanted the big win. And we probably left a lot of money on the table too.
There was one other key to why we won the deal:
The opportunity was a big opportunity for us, but it would have been viewed as just another opportunity at one of our larger competitors.
One of the great advantages of being small is you are likely to care more than your larger competitors. Every deal is life or death.
I remember being on the other side when I was running a division of a large company. We were entering a market dominated by a couple of small companies.
We cared about winning. However, our smaller competitors REALLY cared about winning.
It was life and death to our smaller competitors. I never forgot that lesson.
Conclusion: Give your customers something they can’t get anywhere else.
Ringing the bell and winning business from big customers when you are small is something that can be done. The formula for successfully winning at large customers means you have something your larger competitors don’t have or don’t want to do.
Then top it off by giving your customers a great price, and incredibly responsive support.
Now you’re in business and ready to grow to the next level.
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