Scenario: a system integrator is morphing into a solution provider.
Let’s call them BizCo to make it easy (for me).
This is HARD! And most fail to ever make the transition.
After all, BizCo is transforming from a business that built custom solutions for each client to now providing a defined solution to each customer.
Yet when you aren’t quite sure what your “defined solution” should be, you can quickly fall back on your old ways.
That’s what happened this week. Or rather, about 4 months ago.
The solution was still being formulated so BizCo fell down in a few critical areas that are now biting them hard:
A big customer came to them and BizCo got excited by the potential of landing a big customer.
They sold the “solution” as if it existed in the form the big customer needed. In other words, they underpriced and under-scoped it.
They let the big customer drive the bus and delay the implementation without any consequences. Setting the wrong tone.
Related: How to Know When That Big Customer Is Not a Good Fit
How is that biting them on the rump now?
BizCo has since discovered the “defined solution”. They found dozens of customers interested in being early customers, the price point is attractive, and the effort to onboard each customer is defined (and considered low).
In that time period, this big customer has chewed up dozens of man-hours by failing to come prepared to meetings. So, no progress has been made yet.
And the big customer is going through a merger. Even more delays and a potential change of direction lurking around the corner. It’s death by 1000 delays.
BizCo is now at a crossroads. It has to decide if it wants to chase the idea of landing a big customer or the reality that the customer is not a fit.
To add even more insult to injury, the solution this big customer needs is not something that gets BizCo closer to its transformational goals.
BizCo is effectively building an island. A one-off solution it will have to support indefinitely or until the big customer decides to churn — likely because BizCo didn’t measure up over time, which could hurt its reputation.
All this to say, the annual revenue from this big customer is only about 5% more than BizCo’s newly defined “ideal customer”.
And the “ideal customer” can be onboarded in a small fraction of the time it would take to get the big customer operational.
Plus the timing of “done” here is up in the air given all the delays the big customer has caused so far and the uncertain future given the looming merger.
Just think how many ideal customers could be onboarded in that same span of time. And all the additional revenue potential. And the progress toward their pivot.
So, what would you do?
Let’s discuss it in the comments.
Here are some questions to get us started:
- What if BizCo could onboard just 1 ideal customer instead of the big customer?
- What if they could do 2 in the same span of time? Or 3? Or 4?
- Is it likely that the big customer will publicly endorse BizCo (<30 people)?
- Is there a compelling reason to stick with the big customer?