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Constructors, Facilities Management, Winning New Business

Bidding – Optimism vs Pessimism in selling


We’ve been thinking about optimism and pessimism and trying to figure out the balance that delivers our goal of winning new business for our clients.

At Grist the two directors are in balance. Lindsay is an optimist and I’m a pessimist. But as you will know if you watched a very interesting Horizon this week, our species is optimistic by nature. The experiment they showed was to see how our perception of the world was affected by negative information (you are more likely to get Cancer than you think) than positive. And the simple truth is we ignore bad news. This allows us to drink, smoke and drive fast while texting. So when I say I’m pessimistic I might just mean less optimistic.

When it comes to selling, optimism is an absolutely core ingredient. Metropolitan Life Insurance tested it’s selling candidates in 1985. They scored them on two measures – the one they had always used – their career profile, and second score measuring optimism. Two years later the ‘most optimistic’ were outselling the ‘pessimistic’ by 31%. So optimism works.

But even more interestingly, that year MetLife hired 100 extra sales people who were below the pass for career profile. But this group they selected only those with the highest optimism score.

This group were outselling the pessimists by 57%.

Or put it another way, MetLife were using the wrong criterion for selection. They should have just hired the optimists.

But, these life insurance sales people were incredibly optimistic as a group and I don’t think you have to be a total pessimist to think that their extreme optimism will be a hinderance in the work we do, bidding large projects which often have long lifetimes. In the case of PFI projects, 10, 20 or 30 years.

We work for people who are good at what they do. They, unlike insurance salespeople who make a “once-only” sale, live in a virtuous cycle.

They win a project, they deliver it, the client is happy, the client is willing to tell future clients they are happy, they win a new project.

Unhappy clients make winning new business harder, so bids must be realistic – they must balance optimism and pessimism.

As I said before, we are optimistic by nature – The Psychology of Bad Decisions  – and that can get us into terrible trouble.

If a large bid was led by a life insurance salesperson it would be a disaster, but if it was led by a pessimist it might be doomed from the start – which is what the pessimist would probably say.

So a good bid leader must be optimistic, but not too much. The good news is that there is something called Flexible Optimism. Or balancing risk with reward depending on the context.

So in bidding it is good to be an optimist. Not least because an optimist is able to cope better with losing. An optimist will find and external reason for the loss and assume it will be better next time. Us poor pessimists think it’s our fault and obviously we’re never going to win…

But if I was building the perfect bid team I would include a couple of real pessimists – usually in the key planning roles. if you want to know how long something will really take, and how much it will really cost always ask a pessimist.

You might then think, “Yes, but I’d keep them away from the client” but I think you might be wrong. Because there is nothing more convincing than a pessimist who is certain of what they’re saying.

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About gristpresent

Presentation, Q&A and Engagement Coach. We help you win more business. Also BAFTA-winning film maker. See our new site www.grist.co.uk

Discussion

4 thoughts on “Bidding – Optimism vs Pessimism in selling

  1. Do you think Bill that there is a danger that a pessimist, if as you suggest, believes they aren’t going to win the business, might attempt to compensate by under-pricing? Or am I being pessimistic about pessimists?

    Posted by Peter | April 9, 2012, 4:37 pm
    • No, I agree. But a pessimist who wins with a low price is in his own mind a ‘realist’.
      Too pessimistic and you can’t sell. Too optimistic and you will fail too often.
      I would guess that if you had two “successful” sales people, one of whom was more optimistic than the other, the optimist would get higher margin… What do you think?

      Posted by gristpresent | April 10, 2012, 8:23 am
  2. I think you are better employing the 70% rule whilst bidding, having the optimist for the selling who is 70/30 optimistic, after all does the client want to be faced with a pessimistic sales/bid person? not likely… and employ a pessimist, Commercial/Risk Manager on the pricing 30/70 that way you can be sure the risk is priced correctly, if it goes wrong e.g. 25 year PFI deal you are not quite so exposed. This person could also be client facing but only in the right forum. That way you can be sure of a balanced approach.

    Posted by craig wilson | April 10, 2012, 8:27 pm
  3. Reblogged this on Grist Present.

    Posted by gristpresent | May 31, 2012, 4:58 pm

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