How Dropped Deals Can Actually Accelerate Growth
Business might be lost, but the learning has just begun. Here's how to use failure as a wake-up call to action.
Opinions expressed by Entrepreneur contributors are their own.
Whether you're a unicorn or a struggling startup, seeing a huge deal fall apart or a solid sales proposal turned down can be crushing. There's financial loss, of course. But, regardless of the dollar amount involved, there's a kind of personal loss for entrepreneurs, too -- a disappointment that lingers long after the deal is dropped.
Still, business lost can prove just as valuable as business won. A post-mortem, painful as it may be, often leads to some needed soul searching. Maybe the sticking point was just price or circumstances outside your control. Or maybe there's a bigger lesson waiting behind those dropped deals.
Related: 3 Reasons Why Running Out of Money Will Make You a Better Entrepreneur
Figuring out who your customer really is
During the tech boom of the late 1990s, I taught myself how to build web sites and opened a one-man digital agency. I had a few small clients, until a far bigger opportunity dropped onto my lap. The CEO of an international energy company had seen my work. We met, he explained he was interested in having a new website built and, by the way, did I have a business card? I didn't ... and I never heard from him again.
This example may seem trivial. But it fundamentally changed how I perceived of myself, my business and my potential clientele. Inside the tech community, no one at the time shared business cards. Your work was your calling card. But tech was suddenly reaching its tentacles into all sorts of industries, including the kind of blue-chip companies that expected business cards, suits and ties and all the other accoutrement of respectability. I realized that success was going to require navigating both these worlds and figuring out how to adapt my pitch for customers on both sides of the digital divide.
For entrepreneurs starting out, understanding who your customer is -- and isn't -- is a critical question and hardly an easy one to answer. I may have lost a prospect, but I gained something priceless in exchange.
Related: Failure Is the Tuition Entrepreneurs Pay to Know Success
Realizing world-class is more than a catchphrase
Fast-forward a dozen years, and my agency had hit upon a winner -- a tool to help companies manage all their social media from one site. But going from dozens to hundreds of employees in the span of a few months was not without its challenges. Suddenly, global clients -- companies with tens of thousands of employees -- were ready to sign on the bottom line to use our service. But were we ready to handle their expectations?
This point hit home when one of our first seven-figure deals fell through. The client, picture a large multinational financial firm, loved everything about our platform. It was easy for their employees to use, had all the security and compliance boxes ticked off and stood to save them a great deal of time and money. Then, they discovered that our customer support team at the time wasn't available 24-7 -- an instant deal-breaker.
After the shock wore off, I realized that we needed to level up as a company. I think this is a lesson all growing businesses ultimately have to confront. It's easy enough to promise world-class quality or service when you're starting out. But to deliver it at scale, with clients accustomed to only the best, is another challenge entirely. Losing that proposal was a needed wake-up call, and we immediately began building up systems and services to address our issues. Today, our customer success team is one of the models in the industry. Customers who tweet their complaints or questions generally get a direct response from the Hootsuite team within 30 minutes, day or night.
Lost business is never pleasant but, after the crying is over, it can be instructive. Looking back, a few key rejections -- ranging in time from when I had zero employees to when I had nearly 1,000 -- made all the difference for my company. They may sting at the time, but those dropped deals, properly processed, can actually accelerate growth.
Related: 3 Reasons to Thank Your Critics