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Disqualification And The Positive Power Of Saying ‘No’
By: Kim DeMotte
Issue: 2005nov
I believe clarity can transform your business. What do I mean by clarity? Quite simply, figure out with crystal-clear certainty who your ideal customers should be. Then, send everyone else packing. I like to cite a bit of dialogue from one of my favorite classic movies to illustrate the point.
In the 1965 movie A Thousand Clowns, Jason Robards’ character is trying to figure out how to keep his nephew out of the hands of the Social Services people. The phone rings. Robards answers, “Is this someone with good news or money? (pause) No? Goodbye.” This is an example of clarity that I absolutely love. When it’s not what you need, everything else is a NO.
Disqualify In Order To Qualify Prospects
So how do you translate the spirit of that little moment of cinematic brilliance to your business? Well, assuming that you’ve done the hard work of setting parameters for your company—which means understanding with whom you don’t want to do business—consider the following six simple steps:
1. Buy a sales lead mailing list that’s designed to very specific parameters. For suppliers, PPAI can provide a list of its distributor members segmented in a variety of ways, including geographic location and company size. For distributors searching for end user clientele, Dun & Bradstreet, InfoUSA or Industry Sources are all good choices.
2. Extract all your current clients from the list. You’ll be left with those probably doing business with your competitors.
3. Hire a “Catch & Release Prospector.” This person will go through the list calling prospects with reckless abandon, giving them what might fairly be called “the Jason Robards treatment.”
4. The Catch & Release Prospector will attempt to logically disqualify each prospect. This process is exactly what it sounds like: he or she is trying to figure out if there is any logical reason the prospect shouldn’t do business with you.
5. If this fails—and it probably will, since the prospects are most likely doing business with your competitors—he or she will attempt to emotionally disqualify the prospect. (Maybe he loves his current supplier, maybe she’s committed to giving her nephew the work, maybe another is too lazy to make a change. You get the picture.)
6. Anyone who gets through those two screens will be FTDs—Failed To Disqualify. Turn your sales force loose on them. Statistically these are a level or two more likely to buy than the myriad of “usual suspects” most salespeople will invest your resources in.
Yes, You Can Say ‘No’
I realize the above steps might seem counter to what has always been taught about effective sales prospecting. But this simple, logical, cost-effective system works. Implementing it will save you not only time and effort but also heartaches and headaches.
Of course, knowing with whom you want to do business also means that you must know when to say “no” to those who don’t meet your criteria. Just as an ill-advised yes in a dating situation could result in a bad marriage, an unsuitable yes in a business situation could result in a bad client partnership.
Here’s the problem: saying no is hard. How do you summon up the willpower to say, “I’m sorry, but you’re not right for our business?” Two little words: plan ahead. Having a “script” in mind can make a tough conversation much easier.
It’s best to do your disqualifying right up front so you don’t waste time pursuing the wrong kinds of clients. But, despite your best intentions, you will sometimes find yourself having lunch with a prospect who doesn’t have a big enough budget to afford your services or facing the unpleasant task of firing a client who isn’t working out. If you aren’t armed with a carefully scripted no, you may find yourself thinking, “What the heck—I’ll make an exception just this once.”
You know the rest of the story. “Just this once” becomes your mantra, and you eventually find yourself burdened with a roster of compromises you call clients. The result is a company with fuzzy, ill-defined boundaries and a less-than-prosperous bottom line. Such is the price of backsliding from the “Power-of-NO” theology.
To help you avoid this fate, here are several ready-made no’s for you to practice and memorize. The next time you’re faced with one of the following situations, you’ll know how to say that tough little two-letter word:
ScenariNO #1: The Insufficient Budget
You’ve vowed to accept only clients that can purchase $35,000 or more in promotional products annually. You thought this prospect fit the bill. But at lunch, unexpectedly, he reveals that his yearly budget is a mere $2,000.
Power of NO Script:
It sounds like (insert your product or service here) is something you and your board need to discuss and perhaps budget for the next fiscal year. Would you like for me to call you then?
You might give this prospect another call in eight or 10 months just to see if the budget has changed. You might even decide to “drip on” him with e-mail marketing messages. But don’t spend tons of time, energy and especially money pursuing him if you get the feeling that he’s not going to come around. It’s probably reasonable to assume he’s a solid no.
ScenariNO #2: The Insufficient (But Not By Much) Budget
See previous scenario. The prospect reveals that his budget is $25,000—well under your limit, but you sense that there is potential for an increase.
Power of NO Script:
I’m sorry, but we just couldn’t do an effective job for you at that price. You would need, at minimum, a $35,000 budget. But I think we both really believe (insert your product or service here) is perfect for your situation. Would you consider approaching your board for more money?
This is still a no, but it’s a hopeful no. If the budget your prospect reveals is reasonable, you’re justified in going into sales mode. Just don’t compromise and take the project for $25,000. Being a successful company is all about boundaries. Set them, stick to them and don’t waver.
ScenariNO #3: The Incredible Morphing Project
You’re well into a relationship with a new client when the project you initially agreed upon begins to change. What the client wants begins drifting away from what you do best. One day, you realize that it no longer falls inside the parameters you’ve drawn for your company.
Power of NO Script:
This project has changed scope dramatically; would you agree with this statement? (Client says “yes.”) You were originally looking for 40,000 green widgets and now it’s 30,000 red thingamabobs. Can I spend some time helping you find somebody who is better qualified to meet your new needs?
This is clearly the professional thing to do. Instead of just abandoning the client in mid-stream, you are finding him a new horse. And hopefully, the company to whom you referred him will return the favor someday.
ScenariNO #4: The Ballooning Project
You’re a small, flexible organization that specializes in handling smaller projects and providing a personal touch. One of the projects you’ve accepted begins to balloon in front of you. It ultimately becomes so huge that you realize you can no longer handle it without changing your business model and neglecting your other clients.
Power of NO Script:
I don’t want to burn bridges, but at this time you need more time and resources than I have to offer. My workload will not allow me to take care of you in the way you deserve to be treated. I want to refer you to my colleague at Ajax, who specializes in clients like you. In fact, I will be on the first call with you and help explain the project to her.
This is a tough one. It’s hard to say no to a big, potentially lucrative project, and many business people don’t have the courage to do it. But if a client places such huge demands on you that have to alter your business model to work with him, you’re probably not going to do a good job. This could harm your reputation. Know where you excel and establish crystal clear limits, and it will be easier to walk away.
ScenariNO #5: The Toxic Client
When you signed on with Jack, he seemed okay. But the more you’ve gotten to know him, the more obnoxiously rude, disrespectful and contentious he’s become. He’s upsetting your employees and you get a headache every time you have to deal with him. You realize that keeping him on the roster is no longer worth it.
Power of NO Script:
I’m growing uncomfortable in this relationship. I am trying to communicate professionally with you, but what I’m getting in return is contention and strife. I just don’t think we’re a good cultural fit. I don’t need to be uncomfortable with you, and you don’t need to be uncomfortable with me. Life’s too short. Don’t you agree?
Hopefully, the client will accept your decision, but he may not. He may apologize and ask for a second chance. If this happens, I suggest that you say, “Okay, let’s give it a few more weeks, and if we’re still having problems then, we’ll agree to go our separate ways.” Chances are, it’s still not going to work. But it may make you feel better to give him a few weeks to straighten out his act. I will say this: second chances are okay, but never give third chances. You have to draw the line somewhere.
ScenariNO #6: The Bad Bill-Payer
Suzanne is a good match for your business and you like her as a human being, but there’s a serious problem: she isn’t paying. When you ask where your check is she makes a vague statement like, “I’m going to take care of that.” You sent the invoice three months ago and there’s no sign of your check.
Power of NO Script: Suzanne, we need to have a discussion about money. I sent you an invoice 90 days ago and you haven’t paid it yet. I need to know when this issue will be resolved. I’m uncomfortable letting things go without addressing it with you. Is there some sort of cash flow problem? Should we back off until you’ve had a chance to catch up?
You have to know where your limits are, and there is no more blatant example of not knowing those limits than continuing to serve clients who don’t pay. Cut her off. Stop shipping product and/or servicing the account until you receive the check. Then, decide whether to resume business based on whether you feel the late check was an anomaly or her modus operandi. If you let a client abuse you today, she will abuse you tomorrow.
Gut Check
Even when you’re armed with a script, saying no takes guts. But you will get better with practice. Take it one no at a time. Once you see that the world doesn’t come to an end—and the client doesn’t commit hari-kari or run out of the room crying—subsequent no’s will be easier. Just remember that by saying no to clients that are wrong for you, resources are freed up for saying yes to clients that are right for you. Before you know it, you’ll have a thriving, profitable, fulfilling business—and you’ll be amazed when you look back and realize it all started with a simple little two-letter word.
Kim DeMotte, author of The Positive Power Of NO: How That Little Word You Love To Hate Can Make Or Break Your Business, is the founder and managing partner of Power of No®, a St. Louis-based firm specializing in improving corporate sales and management effectiveness. He works with companies developing strategies for saying “NO” when and where it is appropriate. He has successfully owned and operated two distribution companies, a manufacturing company, two service companies, a software company, and a consulting firm. He can be reached at kim@powerofNO.com or at 877-245-8250. For more information, visit www.powerofNO.com.
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