When should you turn down business?
I may or may not have mentioned this, but I have a little side business selling stuff on the Internet (auto performance parts, if you’re really interested). My business model is a completely drop-ship model that de-emphasizes direct customer contact in favor of remote order entry and fulfillment – in short, it’s pretty much the opposite of the high-contact, high-service model that I typically preach to my customers (it has to be; I don’t have the time for anything else). It makes a tidy little profit, but one aspect that has amazed me is how much I have learned that I can apply to my normal business; i.e. this one.
I’ve long been a proponent of not chasing every possible piece of business, because you end up in situations that challenge what you do well, and you produce unhappy customers and an unhappy you. Nowhere has this been more evident than in this business. For instance, Ebay encourages its sellers to ship internationally to reap the maximum views, bids, and sales. I don’t ship internationally. It’s not because I’m mean (although I’ve been accused of that by some international buyers), but because I tried it for awhile and discovered that international shipping comprised about 7% of my profits and over 80% of my time-consuming inquiries and post-sale problems. I know there are some vendors who do international business well; I’ve chosen to leave it to them. But how do you, as a salesperson, know when to disqualify business that is outside your sphere of expertise?
The first thing you should do is to draft a list of your (and your company’s) core competencies. These are the things that you can reliably be counted on to do well, time after time. Remember to include any permutations that can snatch defeat from the jaws of victory (i.e., in my case, international shipping). This is your base of business that you sell to. Of course, sometimes we have to get outside our comfort zone to succeed. That’s not all bad, as long as we can produce a positive customer experience. Here are some hints to help you along that path:
Discontinue the use of unreliable vendors, partners, or service providers. A while back, a friend asked me to help him resolve an issue over an appliance he bought. The appliance had failed several times in the first six months, requiring service techs to come out and fix it. I discussed the issue with the manager, who explained that they ‘regularly’ had problems with that model. “So,” I asked, “Why the heck are you still selling it?” I finally persuaded him that it was better business to take back the faulty appliance and trade my friend into a good one rather than to keep sending a tech out to patch it through the warranty period.
If you have unreliable products, or partners, or suppliers, make no mistake – in the customer’s eyes, YOU are the unreliable one, because you are the person that the customer spent the money with. Discontinue those products, partners, or suppliers.
The customer wants something that you don’t do well. Let’s be honest. Even within our own sphere of business, we all have things that we don’t do well. For instance, my recruiting business has been successful at recruiting salespeople – but I don’t think I’d do well at hiring a finance manager (I’ve been asked to do so in the past). The fee would have been nice, but that’s not what I’m good at, so I passed on the business. If a customer wants something that’s outside your sphere of competency – and you think the likelihood is low that you can produce a successful result – you’re better off passing on the business (refer the customer if you can) and keeping your relationship whole. The worst question you can get from the customer is, “Why did you take that order if you didn’t think you could do it?
The customer wants something unethical. Years ago, when I was in industrial sales, I had a stockroom manager who wanted a cut of my commissions in order to buy from me. If I didn’t, he said, he’d never spend a dime with me. That was a tough decision because it was a nice account. I talked to another salesperson who told me to “just do it!” My boss left it up to me (gee, thanks, boss). I decided not to do it. I’ve always tried to tread a fairly black-and-white ethical line, and this just rubbed me the wrong way.
My instincts were right. Someone – not me – blew the whistle on the guy. He was fired, and so were most of the suppliers he’d gotten kickbacks from. I ended up getting a nice share of the business from the next stockroom manager, a good guy who played things straight. As far as I know, my old company still sells to them. If it looks wrong, feels wrong, and sounds wrong, it’s probably wrong. And the reward is rarely worth the consequences.
You can’t make the customer happy. We’ve all had accounts where, by any standard, the customer wasn’t going to be satisfied. Some customers just like to complain; some distrust any vendor. Regardless, if you have one of those customers, you’ve got some difficult decisions to make. A chronically unsatisfied, complaining customer can suck the life out of you, take all your time, and even impact the quality of your sales calls with other customers (because you’re preoccupied dealing with him/her). My best advice here is, if you’re going to have one of those customers, they’d darn well better be nicely profitable. Price your stuff to the point that it’s worth dealing with them.
What we still haven’t discussed is the elephant in the room; that’s why salespeople take on bad business. It’s simple – they do so because they don’t have an alternative. Too many salespeople don’t have enough in their funnel to be able to turn down any business, so they spend their time dealing with post-sale problems that should have never happened. The best defense is to be an aggressive, prolific prospector (as with many other things in sales, having a good sales funnel is the best cure).
