Verb Company recently ran a campaign to gain new leads which yielded two potential clients with interesting business proposals. Both are new companies in the same industry, broadly linked to the cosmetics industry, with at least one of them offering a product that may become referential in that particular segment of the market both for the benefits it would bring to users as well as for its environmentally-friendly production.
For many startups like Verb, it may not be easy to muster the courage to turn down the money that any legitimate business would bring. At a time when nobody has a clear idea about the way the economy is going in the middle of a worldwide and seemingly endless pandemic, how could any businessperson in their right mind decline to take on a new customer? Is any business worth being called “business” if it is passing up on an opportunity that fell from heaven (or, rather, was brought up by advertising algorithms on the web)?
Yes. You have to pay the bills.
You can’t get too picky when you are just starting out and nobody knows who you are and what you are capable of doing. Who, after all, are you to turn anybody down and then expect to garner attention or respect from potential customers who have no idea yet about your credentials?
Then there is the inherently human difficulty to say “No.” We all find it hard to say that little monosyllable, mostly for the social costs associated with it of being unhelpful, unfriendly, insensitive and a whole array of negative attributes. Obviously, the underlying logic behind this reluctance to say “No” may be our innate fear of being told “No”, sometimes by the very same people we turned down earlier, when one day we need their help.
Yet, as any startup businessman with a few years of experience learns—very often the hard way—bringing in the kind of customers that do not align with your vision may soon become a source of conflict both with them and, as misunderstandings multiply and morale takes a toll, the inability to satisfy this type of clients create internal discord within your company. That “easy” money may cost you dearly.
Take the testimony of Ron Gibori, of Idea Booth, which he shared in Medium:
“When I started my current agency, I wanted to create big, world-changing ideas. But the allure of easy, cheap work was too tempting to ignore. We started accepting social media clients just to pay for the basics, nothing big, but enough to have our interns do work. But slowly and surely, we signed more and more. We spent hours-long conversations with these clients that weren’t happy with the content we produced, which caused us to hire more individuals who could work on social media full-time.”
Ron Gibori
Sure enough, they ended up with situations anyone in their position would be familiar with, such as this one Gibori describes: “The wrong client will fight you at every step because they see something different than you, and once they send a check, they’re going to fight to get what they paid for, not what you are paid to give them. See the difference?”
When To Say ‘No’
- You Are Simply Too Busy: The most obvious reason to say “No” is when your business is running at capacity and even if the customer is a good fit for your business, you are unable to provide service that meets your own standards, let alone the customer’s, which will often tend to be higher if only because they are paying for it. Yet it is in nobody’s interest to provide shoddy service that will fail to serve your customer and that may bring disrepute to your own company.
- You Do Not Have The Expertise: You met with the customer, you hit it off, and he understands you do not have the required expertise but trusts you can still serve them. Your business is slow, you have the time and the money will do no harm. The case for “Yes” seems stronger than the one for “No.” Still, it is too big of a gamble. Eventually, the cracks may show, leading to disgruntlement on both sides. Take a deep breath and say, “Sorry, but no.”
- The Customer’s Vision Does Not Align With Yours: This one is the hardest call. The onus is on you to judge. It may be hard to judge after the first few interactions. Yet this mismatch of visions can be the biggest source of misery for both sides because, as any bad relationship in any walk of life, nothing you do helps and everything you do becomes a problem.
How To Get The Right Customers?
So, to get the right customers and avoid those that will drag you down, be very clear about what you do:
- Spell out the terms of your business relationship in a scope of work that is as detailed as possible in terms of services to be provided and deadlines.
- Decline, politely but firmly, “favors” that fall outside the agreed scope of work.
- Have an exit strategy in case you realize this customer is not a right fit for your business. This is in addition of the possibilities afforded by the law to end a business relationship.
Saying “No” or parting ways if the business relationship is not evolving in a favorable manner does not have to be hostile. As Rebecca Knight, of Wesleyan University, says in the Harvard Business Review, quoting Holly Weeks, the author of Failure to Communicate: “Acknowledge the other side.” This means being empathetic and listening and, even if you decided that you are not going to work together, see if you can help in small ways, like helping the customer, as a courtesy, identify problems they need to work on before embarking, say, on a social media campaign, or helping them find a provider who can better serve their needs and referring them even to competitors you think may be a better match.
The benefits to this may not be obvious or immediate but they may yield more business to you in the future for the professional integrity you demonstrated: even if this sounds naïve, the refusal to take money on principle—because you are not the right company for that customer—is prized as a sign of high standards.
You are also releasing your time and energy to work with clients you are better qualified to serve. And in the grand scheme of things, by turning down those you are not really able to help, you are creating opportunities for other providers, contributing to a more robust and healthy business environment.
As importantly, as Gibori says, it is true that turning down clients who would distract his company from their vision has made it “difficult to pay for the luxuries we want to have sometimes.” But, as he adds, “I would rather deal with that problem than have a lost vision and nightmare clients.”