Saying “no” to a customer can be really difficult, because it means that the business owner could lose something of value.
This is part 4 of a 7-part series.
Part 1 | Part 2 | Part 3 | Part 4 | Part 5 | Part 6 | Part 7
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Asking this question reveals that the person is afraid that refusing a new customer will result in a loss. So this fear is causing them to accept customers who are not ideal for them, in order to “guarantee” more cashflow.
But my response is this:
Saying “no” is actually healthy. It feels really, really scary to turn down a customer. In fact, this can feel so demoralizing that a lot of people can’t do it. They can’t say “no” when they are faced with bills piling up, debt mounting, and they NEED TO MAKE MONEY.
The thought process of “I MUST take this customer, because there’s no other option” is also known as the Scarcity Mindset. Unfortunately, constantly focusing on what you don’t have will ultimately lead to making bad decisions for your business.
My work is focused on teaching business owners about strategic risk, and I help them identify the potential for bad things that could happen.
Getting short-term “win” by agreeing to serve someone who is not ideal could result in some revenue. But the long-term effects could look like this:
- You could get burned out.
- Your staff could get burned out.
- A bad customer could cost you money.
- They could cost you time.
- They can also cost you social equity—staff engagement & enthusiasm, and public support.
Serving a non-Ideal customer will require a lot more time and effort to satisfy than what you will generate in profit from their purchase.
Placing limits on what you will and won’t do is a great way to reduce your risk and increase profits. The 80/20 Principle states that 80% of problems are from 20% of the customers; and 80% of profit comes from the 20% of customers (those who are typically quiet and don’t complain!).
It’s better to increase the number of customers who are satisfied and pay you on time, rather than to spend most of your time trying to satisfy customers who aren’t happy no matter what you do.
Steve Jobs was the Founder and CEO of Apple (one of the most popular and successful companies in history). At an Apple Worldwide Developers Conference in 1997, he said this:
People think focus means saying “yes” to the thing you’ve got to focus on. But that’s not what it means at all.
It means saying “no” to the hundred other good ideas that there are. You have to pick carefully. I’m actually as proud of the things we haven’t done as the things I have done.
Innovation is saying no to 1,000 things.
― Steve Jobs
This quote has been restated in many ways; but in a nutshell, he is saying that in order to succeed and find the one way that will work, we have to say “no” to many things. This means choosing to only work with customers who will bring you closer to those goals.
In the next installment, I’ll explain what I have learned about serving the “wrong” customers. Read it here.
If you are interested in hearing how you can reverse a toxic workplace, find out more here!
Grace LaConte is a business consultant, writer, workplace equity strategist, and the founder of LaConte Consulting. Her risk management tools are used around the globe, and she has successfully reversed toxic work environments for clients in the healthcare and non-profit fields. Grace specializes in lactation law compliance & policy development, reducing staff turnover after maternity leave, and creating a participatory work culture.
Find more at laconteconsulting.com, or connect with her on Instagram and Twitter @lacontestrategy.