Saying NO to a New Client may be your Best Business Move

Filed in Sharisax Is Out There 7 comments

The end of the year is a great time to be re-examining What’s Worked and What Hasn’t — in business and personal lives & relationships.

My latest assignment for the CompuKol blog discussed How to say NO to prospective clients when doing business with them could be more trouble than value.

In addition to Googling the topic, I also posted requests for input on LinkedIn and Facebook. With all this information, I decided to put together a series on the issue beginning with my article:

Say NO Like a Pro — when you must turn down new business

Saying NO to a prospective client is not the Kiss of Death. Rather, what will certainly lead to some Dark Days is saying “yes” when you can’t deliver — or your gut has told you the potential customer and/or their project is not the right fit.

During difficult economic times like we have been experiencing for the last few years, we are inclined to take on everyone who comes through the door. It is not unprofessional to turn down work, but “How” you give the bad news requires care, integrity, and careful deliberation, and should not make you look like an amateur.

Given the power of Word-of-Mouth and the need to keep your business active in the Recommendation Chain, communication strategies — even when saying No — must be forward-looking and as positive as possible.

The continuing growth and force of social media in our business, as well as personal, lives has shown us the necessity for conversations to be sincere, transparent, respectful, and honest.

Five situations which may require a NO, and how you can deliver the bad news

1) If a prospect wants some skills or experience that you don’t have, don’t fake it. Instead, acknowledge your scope of practice and recommend a colleague:

“No, I’m sorry, I’m not a ———- , but I’ve worked with So-and-So who is. In fact, he/she has done this kind of work for me on time and within our budget.

Of course, this means that part of your business plan should be to build a referral system where you can provide leads to each another.

2) If the situation is a timing issue, this No can turn into a “Yes, but not at this time”:

“I would very much enjoy working with you, but I’m on deadline with two other projects at this time and would want to be able to focus my full attention on yours. If we could schedule it in three weeks, then I would be happy to support you.”

3) What happens, though, if your initial meeting with the prospect convinces your gut (or you’ve heard negative reports from associates) that a working relationship would present more stress than the compensation was worth? Here, again, remember “word-of-mouth” and be tactful. Surely you know of someone whose personality could more comfortably accommodate this client:

“Your project seems like a great challenge, and I know just the person who relishes those type of projects.”

See how important it is to build a team of referrals? (BTW, don’t think about using Response #2 for two reasons — (a) it isn’t sincere, i.e. you wouldn’t “enjoy working with you”  and (b) what if the person was willing to wait?)

Oh, yes, be certain to keep your personal judgments out of the conversation.

One other thought, though: If the job is something you can do well, you might consider pricing it so high that the customer might choose another vendor. But if he/she sticks with you, then the dollars might make doing the job worth your while. However, collect a good chunk of it up front.

4) Perhaps it is purely the project that is not a good fit with your company’s image, vision, or mission. This is the perfect opportunity to be honest and forward-looking:

“After chatting with you, I feel certain that at some time in the future my organization could provide the services that your business can use, but this particular project is one that would conflict with our firm’s mission. However, A&B Company regularly handles these types of activities.

5) Finally, if your prospect has a sense of humor and is looking for the impossible, you can try this one:

“I have a pen, paper, and computer access, but I’m afraid I don’t have a magic wand and so I’m afraid the answer has to be NO for now.”

Identifying a potential client starts with an interview to make certain the relationship is right for both parties. As a business owner, your own needs must set the priorities, and even when you are hungry for business, you should turn down any customer that will require exhausting hours, extraordinary hassles, or undue stress. But even protecting yourself can preserve your business and possible future relationships with any particular client; simply make a concerted effort to network with colleagues in similar and associated businesses and build a referral team in which everyone comes out a winner.

Please add your own insights — and check out the other articles in the series:

Post #2: Avoid future problems by saying NO Now

Post #3: Investigate client/project before saying Yes — or making it a NO.


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Posted by Shari Weiss   @   28 November 2010
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Comments
Nov 28, 2010
4:18 pm

Shari: Wonderful article! Great information for folks that have a business…when I had my online marketing and public relations business in the 1990’s I took on a client and didn’t follow my “gut”…well, as usual my gut was right! It was a good experience because I learned how to eloquently say no when my gut said no…thanks for the reminder and the extra information that I had not thought about. Your blogs are always insightful and full of stuff we can use. Cheers, Diane Castro

Author Nov 28, 2010
6:39 pm

Diane, a long time ago . . . when I first started teaching way back when . . . I learned how much better I understand things when I teach about them. That’s the main reason I started this blog and certainly the reason I continue writing. Hearing that I have helped you [and others] is certainly icing on the cake. Thanks for reading. And . . . this will be my first “series” as I add more content to this subject in the next few days.

Author Nov 28, 2010
6:41 pm

BTW, here is some additional content included on the CompuKol version of the article:

6) When a prospective client cannot explain clearly what their business is about and are incapable of articulating their needs, there is nothing that you can do to help them.

“At this point we can’t help you, however we can refer you to an excellent business advisor. After you have consulted with the business advisor, we would be happy to revisit your requirements.”

7) When a prospective client indicates that they do not have a sufficient budget for the project and they request an unreasonable discount or payment plan that does not allow you to make a profit, you need to send them to someone more affordable.

“Unfortunately, it seems as though you can’t afford us. I would be very happy to refer you to one of our business associates who can work within your budget.”

Conclusion

Although as a business owner, you don’t want to turn anyone away, sometimes it makes more sense when it comes to the welfare of your business to decline a business relationship at an early stage with a prospect if the relationship between the two of you is not mutually beneficial.

Nov 29, 2010
9:03 pm

Shari,

Great ideas on what to say when “no” is the best answer. We especially liked the last one. After all, everyone should have a sense of humor. It is amazing how so many people think you need to say yes to everything that comes your way. Of course they usually end up being the ones who are overwhelmed and under-delivering on their commitments.

Thanks,
~ Pat and Lorna
http://TheCoolestCouple.com

Author Dec 4, 2010
4:18 pm

Pat and Lorna, thanks for letting me know that you commented: as you suspected the comment had gone to my Spam folder, which reminds me to check there every once in a while.

Author Dec 1, 2010
8:23 am

Jack Tarasar
Posted November 29, 2010 at 1:43 pm

Speaking strictly from a Client perspective. I have researched/sourced Web Developers with Due Diligence, looked at their portfolios, checked references, etc. and STILL found out later that the person/company could not perform. Very frustrating in terms of wasted time and money. Without knowing all the details, some might put me in the difficult Client category. I would disagree. I NEVER hire the least expensive quote, nor the most expensive quote.

I have hired Freelancers as well as small to large Web Developer operations and not one has been experienced, capable or had sufficient creative skills. Price quotes for the gig, even though I have supplied extensive 2 page “Scope of Work” documents have varied from $100.00 to $20,000.00. I have hired from sources like Craigslist to job boards like Odesk to Elance or web searches and even blogs like this one, at Linked In. All with the same result. I have paid up front and into escrow payment accounts. I have tried every source and I still have not found the right person or company. Very frustrating and expensive in both time and money.

Web Developing, in my opinion, is a field where anyone can SAY that they are expert. And, yet could be Entry Level.

Author Dec 1, 2010
8:23 am

Via LinkedIn Groups

Group: A Solo Business – Solopreneurs And Business Owners
Discussion: Say No Like a Pro — When You Must Turn Down New Business

These tips are perfect. I have used a few of them and will certainly rely on the others when appropriate. Thanks for making us aware of this information.
— Posted by Janice Long

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