I Lost a $300,000 Search Because My Price Was Too Low

Around 2015, a Fortune 500 company came to me for a quote on a retained CTO search.

I knew this role. I had filled it multiple times. I had the reputation, the network, and the track record to back it up. So I put together what I thought was a fair, competitive quote — a strong number, honest for the work involved, without the massive overhead of a large firm behind me.

I lost the bid.

My contact called me with the reason. I hadn't been beaten on quality. I hadn't been beaten on experience. I had been beaten on price.

Korn Ferry walked in with a team of freshly minted college graduates and quoted a number that was more than double what I had proposed. We're talking $150,000 more. The total search was $300,000.

And the client chose them.

Why? Because at that level, with that type of company, a low price doesn't signal value. It signals doubt. They looked at my number and thought — if he's that much cheaper, what are we missing?

I learned one of the most painful business lessons of my career that day.

Just because you don't have the overhead doesn't mean you should undercharge. My decades of experience, my relationships, my ability to find the right person at the C-suite level — that has a value. And I wasn't honoring it.

I absolutely could have done a better job on that search than the firm that won it. And that company almost certainly overpaid for a cleaner PowerPoint presentation and a bigger logo on the proposal.

But here's what I want to say directly to the board members and executives reading this:

The biggest recruiting firms are not doing anything fundamentally different from what a smaller, experienced firm does. They have more overhead, more junior staff, and more impressive marketing materials. That's largely what you're paying for.

If you want the best person for the role — not the best presentation about finding the best person — talk to firms where the senior person is actually doing the work. Where the person who sold you the search is the same person making the calls.

I learned my lesson that day about valuing my own worth. But I want to be clear about something — I still believe in fair, honest pricing. I'm not going to inflate a number just because I can. That's not who I am and that's not how I do business.

You don't need the biggest firm. You don't need the most expensive one either.

You need the right one.

Philip Lamb is Managing Partner of PRL International — a retained executive search firm with 30+ years of experience placing leadership talent in manufacturing, energy, aerospace, technology, and financial services.