Always Rethink Massive Opportunities

Scenario: You're a PM leading a B2B SaaS product. A top sales rep comes to you with a "massive opportunity".

Yes, it comes with an ominous RFP with a "few" customization requests but hey, the Annual Contract Value (ACV) is through the roof. This is a no-brainer, right?

Well, not so fast.

It's worth the PM's time to calculate what we call the "Annual Operations Cost" - estimated $ value to deliver customizations and support the account.

Now, often PMs only estimate the cost of development of the customizations.

However, there are several overheads on top of that which need to be factored in e.g. client calls, RnD for their bucket-list enhancements, report generation, UAT, support for their IT security audits/third parties etc.

Moreover, such clients typically demand time from your company's executive management as well which is a costly line item.

Each hour you give them needs to have a dollar value. Roll that cost up & compare.

If the ACV is not several multiples of the AOC, then rethink what you're getting out of the engagement. Is it purely strategic?

I've seen several occasions where such opportunities consume the entire organization.

Sometimes the opportunity cost (selling to better-fit customers at scale) is just too high.