The biggest deal we ever won
and didn't sign.

Last week I wrote that I'd lost big deals on principle and never regretted it. A few people asked which ones.

Here's the second biggest. I've still got mild PTSD from the biggest one and can't bring myself to talk about it.

2005

An offshore BPO deal with, let's just say, the world's largest online retailer. In pure revenue terms it would have added 20% to our topline.

We'd won the competitive pitch. We'd largely agreed the commercials. They'd given us their terms and we'd said yes in principle. Tight margin, real currency risk, but it was ours to sign.

We'd already started training our enablement teams.

But I kept looking at the deal construct.

And the more I looked, the clearer it got. We were not going to be able to deliver the outcomes they needed and hold our margin thresholds. We could have done one or the other, but not both to our mutual satisfaction.

The hard part wasn't the analysis

An eight-figure deal makes you want the analysis to be wrong.

Some of my exec team were pushing to sign, for the topline and for the jobs it would have created, and those were good arguments.

But a few of us could see where we'd be in around month six quite clearly. Us squeezing delivery to protect margin. Them escalating because they weren't getting what they'd bought. A fractious, unbalanced relationship neither side signed up for and both sides would blame the other for.

There were three levers that could have made it work. Unit price, call delivery patterns, or overall volumes. Move any one of them far enough and the model held.

So I flew to Seattle, days before signature, and asked.

They weighed it up. They had their own books to balance. They said they couldn't move.

So we walked away. In the end, all of us agreed.

I still don't know whether they were calling our bluff or we were calling theirs. They went to another provider in another region. We didn't lose money and we didn't lose our reputation.

Why I still think about it

In transactional business there's almost no such thing as a bad deal. In recurring revenue businesses there are a lot of bad deals signed every single day.

That's the Promise Gap in action. The distance between what Sales promises and what Services can actually deliver.

Most conversations about it happen afterwards, when the churn shows up and everyone reconstructs who said what. But the gap is usually visible at the deal desk, months before signature. Someone can see it.

The question is whether the organization is built to listen to them.

It was the biggest deal we ever won and didn't sign.

Martin Dove is the founder of It's the Outcome, and has spent the last decade helping technology and services companies make the shift to outcome-based client engagement.