Anybody who’s really sold has lost a deal. It happens. It always hurts. But a few unfortunate souls have had the honor of blowing deals that fundamentally change their company’s future. This is exactly what happened to Nike when Steph Curry walked away from an endorsement deal worth billions.
It didn’t have to happen. A seller made a few careless mistakes — that could happen to anybody — and the result was a multibillion dollar catastrophe. Here’s how it went down, and what anybody who closes deals can learn from it.
Steph Curry needs no introduction to basketball fans. Just seven seasons into his NBA career, he’s secured a spot as one of the most important players of all time. His is a classic underdog story. At a slim 6’3”, he was constantly written off as undersized, but he’s silenced critics at every turn and claimed his place in basketball legend. Recognition of his impact is universal — just a couple weeks ago he was the first NBA MVP to be backed by a unanimous vote.
And yet in 2013, Nike dropped the ball so badly in their pitch that he walked away from his endorsement deal with them. Curry ended up taking his contract right on over to Under Armour — at the time, a minor player in the basketball shoe market — and has been with them since. Morgan Stanley has estimated Nike’s loss to be worth approximately $14 billion dollars to the Under Armour brand. Ouch.
Curry was a Nike recruit throughout his college basketball days, and renewing his contract seemed like a foregone conclusion.
But throughout the entire process, Nike demonstrated a lack of consideration that bordered on overt disrespect.
Don’t let overconfidence bait you into making the same mistakes. Here are four things every seller or sales leader should learn from Nike’s $14bn mistake:
1. Know what motivates your buyer
Steph Curry has a deep, personal connection to kids development camps. As a child, he attended Chris Paul’s camps, and these experiences were critical to his success. Because of his personal connection, running a camp was understandably a major priority as an emerging role model.
Nike traditionally puts on development camps run by their players. In the year Curry’s contract was up, Nike offered Kyrie Irving and Anthony Davis the opportunity to run a camp. Curry, despite his strong (and obvious) ties to them, wasn’t extended the same offer. This would have been an easy, relatively low-cost way for Nike to have shown that they knew what motivated him and cared about helping achieve his personal ambitions.
Instead, they scorned him for two up-and-comers.
Enterprise sales are exceptionally nuanced, and highly personal. They’re built on trust. And to create trust, you need to take the time to connect with your buyer one on one and get inside their head. Empathy in sales (being able to step into your buyer’s needs, wants and emotions) creates a strong selling relationship. If your buyer really trusts you, inking a deal goes from being the end of a hard-fought struggle to a natural next step in your relationship.
2. Details matter, Polish wins
Even when it seems like a sure thing — it’s not a done deal until there’s ink on paper. Nike has signed 68 percent of NBA players (according to Nick DePaula of The Vertical), including the likes of MJ, Kobe, and Lebron. To be signed by Nike is to live out the dream of every kid who ever laced up a pair of basketball shoes — it is to be a legend. Nike knows this and was probably feeling pretty confident going into negotiations with Curry.
But Nike threw any advantage they had out the window when they left another player’s name and picture in their sales deck. In the actual presentation they walked Steph through, they had the wrong player’s name and photo. Can you imagine how embarrassing that would be? It’s like showing up to pitch Coke and actually having Pepsi’s name and logo in your deck.
And then they mispronounced Steph’s name. (They called him Stefan, as in Steve Urkel’s alter-ego. Seriously.) To make matters worse, all this happened in front of his dad — old-school NBA superstar, Dell Curry. We all make mistakes, but missing a series of fundamental details like this erodes a buyer’s confidence in your ability to understand their needs and execute post-sale.
A customer can tell when you’ve put in the effort. So don’t half-ass your preparation. Spelling mistakes, typos, and wrong information can be easily avoided by doing a second run through. It’s worth double-checking and adding in the polish your customer expects and deserves.
3. Make every client feel like your best client
Nike has tiers of athletes that they sign to endorsement deals. On the top tier, you have the Kobes and the LeBrons. And on the next tier… apparently you could have had Steph Curry. For the renewal pitch, Nike chose a run-of-the-mill venue and didn’t send their top exec.
Combine this with the slip-ups during the presentation and it was clear Nike didn’t intend to treat Steph like a top tier athlete. This hurts. It’s like being asked to meet in a lobby. It’s like not getting a demo because the seller on the other end doesn’t think your company can foot the bill. Whether it’s on the hardwood, or in the boardroom, feeling written offcuts deep — and it cost Nike the deal.
Make every client feel like they are and will continue to be a top tier client. Again, it’s the little things that matter:
- Don’t dial in late to the meeting.
- Always meet in person if you can. And go to them whenever possible.
- Don’t send junior team members in your place.
4. Know the full cost of losing the deal
Not every deal has equal consequences. By losing the Curry contract to Under Armour, Nike both directly funded UA’s expansion into the basketball shoe market, and cemented their status as a major competitor. Morgan Stanley has estimated that the Curry contract will contribute $14 billion (BILLION! WITH A B!) to Under Armour’s brand. UA is seeing the effects already – they’ve more than doubled revenue from $1.83bn in 2012 to $3.96bn in 2015.
While this isn’t entirely due to the Curry endorsement, their basketball footwear sales have been a huge driver in their growth. And the stock market is showing faith in UA’s future and the feasibility of their goal of “becoming the No. 1 athletic footwear brand in the world” — in 2015, their stock grew 60%.
The lesson: Be aware of your competitive landscape and understand how major deals can affect your market position. Whether that’s giving up a logo that validates a competitor’s viability in a new vertical or losing a massive deal that funds a new entrant’s first few years of expansion, sales leaders especially need to be aware of the full consequences of hitting “Closed – Lost”.
Using a service like DocSend will help you catch and fix embarrassing mistakes like the Steph Curry slide deck disaster, even after the material is in your prospect’s hands.
This is a sponsored guest post from a Sales Hacker partner.