Sales Tip: When to Say "NO" To a Sale

At first glance, the idea of turning down possible revenue might make you feel a little queasy. How could your business, with its demanding revenue goals, say no to an incoming check? There are several reasons why saying “NO” might be the best decision you could make for your team.
Some motivations for declining a potential client are more reasonable than others. Ultimately, when each of the following red flags appear, your sales and marketing teams should decide either to part ways, or proceed with caution.

Red Flag #1: Bad Timing

The primary hindrance to producing quality work is time. Some time concerns are related to revenue as well. These bad timing issues could be the first and most obvious signals to say “No.”

• The potential customer has requested your product or service on a deadline that would not allow your team enough time to turn out quality work. The old adage goes: There are good, cheap, and fast, and you can only pick two. If your prospect wants your product “fast,” it may come at the cost of being “good.” That quality assurance may be something you can not afford to budge on.
• Currently, your team is too busy to take on another project. This is related to the first timing issue, in that the deadline, though it may seem far enough in advance, is still too soon to finish your current work in addition to the new job.
• The third issue related to timing is based around the concept of opportunity cost — meaning the time it takes to finish a new project could take time away from doing something else. That something else could bring the company more revenue. Saying no to the new project for the purposes of focusing on another process or project that could bring in more cash flow may be the right decision for your company.

Red Flag #2: Bad for your Brand

You’ve worked hard to create awareness for your brand and nurture its reputation. Your service has a targeted audience which is attracted to certain marketing efforts, expects a specific level of quality, and requires the peace of mind that they are doing business with someone they can trust. Saying “Yes” to a sale now could mean more “No’s” in the future, if your brand is degraded.

• If the potential client has a business or targeted demographic that is contradictory to the message your brand is portraying, it may be beneficial to part ways. This issue might surface through differing business ethics ideals or simply that you don’t believe in or agree with the happenings of their industry.
• A potential job could require that you have skills or expertise in an area that you currently do not have. If you make promises that you cannot fulfill, the quality of work could harm or shift your reputation.
• The potential client should have a clear vision and goal for their future, and be willing to articulate it well. If you have a feeling that the company you plan to work with is on a doomed path, being associated with that failure could be detrimental for your brand.

Red Flag #3: Potential Client is Hard to Work With

This might be the issue that could cause the most heartache, or the most discontent in your office. It’ll likely be the hardest to turn down, as the obstacles often don’t surface as a direct decrease in revenue. However, peace of mind among your workforce could attribute to efficiency and the quality of work they produce.

• The potential client could have a personality that clashes with yours or the personalities of your team. The deal could end up in more fights and disagreements than satisfaction.
• Maybe the client gives you the impression that they could be needy or they have unrealistic expectations for the amount of time and effort you can commit to their project as opposed to your other clients.
• During the proposal process they are consistently haggling over price or asking for discounts. Essentially, this devalues your work. If you believe your prices are fair, and they want handouts, they might not be the client for you.

What’s The Best Long-Term Decision?

One of your most valuable marketing assets is your community of satisfied customers. Potential clients respect the opinions of their friends and colleagues. Creating relationships with clients that are positive and full of contentment is necessary for turning them into referral partners.
If any of these red flags arise, and you feel that they cannot be resolved by the time your project is finished, you may have missed an opportunity to create a referral partner.
If these warning signs appear and you’re on the fence about declining potential business, apply an ROI projection to the potential sales decision. On the left, list the projections for the amount of time, effort, resources, peace of mind, and money/wages that are needed to finish the project. On the right, list all of the returns you stand to gain from the sale, revenue, brand recognition, and portfolio growth. If you do not gain more than you’re required to put into this project, then it probably isn’t the best fit for your company.
All in all, saying no is not something your business should do often, but heeding some warning signs can save your business from losing money in the long run. If all else fails, go with your gut!