It’s hard to say no, especially when you’re a small business just getting started. Learn to spot the leading signs that you should back off and turn down an opportunity to grow your business the wrong way. Article #11 in a series exploring the big questions that entrepreneurs ask as they’re starting up and growing their businesses.
“Buyer’s remorse” vs “seller’s remorse”
The tech world that I have primarily dealt in over my 25-year career is full of cases of “buyer’s remorse,” where it becomes clear (often very quickly) that your investment in a new product isn’t going to pay off. Maybe the technology stinks. Maybe it’s not suited for your “use case.” Maybe you got pressured into buying something you really didn’t need. Maybe you just weren’t able to invest the time needed to extract value from the offering.
In the services space, where I’ve also spent the majority of the time as a high-tech PR professional, there’s an even bigger problem: “seller’s remorse.” While buyer’s remorse can set in quickly, seller’s remorse is more insidious—it slowly creeps in, allowing you to second-guess any initial doubts and continue to plow energy and resources into a client or project that you should not have said “yes” to in the first place.
If you sell services, then this article is for you. But even if you sell products, or just consume them, you may gain some insight into the decision making process.
Common “service fails” and their root causes
Wouldn’t it be nice to have a crystal ball for every deal you make? Of course! But it simply isn’t possible. Nevertheless, you may be able to avoid some problems just by understanding the most common problems, and the corresponding root causes of some of the most challenging “service fails.” Here are a few:
- Lack of response. Personally one of the biggest (and most dangerous) sources for challenging customer engagements has been a lack of time and attention from the client—you just can’t get their attention. Here’s the deal: even the busiest person in the world will set time aside to deal with important matters. If you can’t get their attention on a matter, then more often than not, they don’t consider it important enough. And guess what: it’s your fault! When you can’t get the time of day from your client, then they don’t value your service, which means you’re not successfully demonstrating and communicating your value.
- Everything’s urgent. The exact opposite of the first fail, this is the customer with apparently no planning capability. They probably say yes to everything their boss asks them to do, and leans on you to do it. They’re probably young and inexperienced, or they’re older and just bad at their job. If everything you get from the client is urgent, then they don’t understand what you’re good at and how you do your job, which means you have to brief them (and ideally their boss) on your capabilities.
- Bad brief / wrong answers. “The customer is always right” is probably the most misleading good advice anybody can give. Its heart is in the right place, but it’s incredibly misguided. Our output is only as good as the input we receive, and especially with services, you cannot rely on the input of everyone on the client side. You need to quickly identify all the stakeholders, the knowledge sources and the decision influencers at your client. If you’re getting bad information, then you’re talking to the wrong people, which means you need more visibility into the rest of the organization you serve.
- Lack of “chemistry.” More often than not, this one’s on you. If your conversations are awkward, enthusiasm is waning (or never existed) or meetings start to get cancelled, your first thoughts should be directed inward. Do we have the right resources lined up to manage this relationship and deliver on our commitments? Are we delivering on our promises? Did we overpromise? “Chemistry” can be boiled down to trust, and trust must be earned. When chemistry fades, freshen up the “reaction” with new “reagents” (i.e., new team members) or “catalysts” (i.e., new services, a fresh voice from one of your experts, etc.).
I’m sure there are more, but let’s move on to the early warning signs that you made a bad match.
5 early warning signs of bad clients
There are some signs that you can easily pick up on during the pitch, if you ask the right questions. These are signs that you should “say no.”
- They trash talk your predecessor. Ask the prospect if they’re worked with past companies in your industry, and how successful those relationships were. Any client has to take some ownership of a failed relationship. If you encounter a prospect that is already jaded about your industry, but that takes some responsibility for past fails, that’s okay. But if they trash talk your predecessor and are unable to identify any shortcomings on their part, walk away. History is likely to repeat itself if lessons aren’t learned from the past.
- They don’t know what they want. Ask the prospect what their top priorities are for the business overall, and for your relationship. If a prospect can’t clearly identify a pain point, or can’t explain how your efforts will support business-wide objectives, then you’re pitching an unqualified client and need to take a step back to see if the time is right to work with them.
- Their needs are outside of your wheelhouse. If they were able to answer question 2 above, ask yourselves whether you are a good fit for the needs they described. Be honest with yourselves: is this a stretch for your capabilities? Are you just being desperate? What’s more important: a little cash now or a ding on your reputation down the road when the engagement fails because it was a stretch? This is a very good reason to say no!
- They tweak a lot of terms. Once you fire off your proposal and contract, how much nit-picking is there? How a company responds to your proposal and your contract will tell you a lot about how the ongoing relationship will work. If they return your contract with more red than black, walk away. Assuming you’re engaging in industry-standard practices, most of the contract is boilerplate in nature — certainly valuable enough to go through and mark up a bit, and probably valuable enough to accept a few changes, but not worth multiple rounds of approvals and completely non-standard terms. Even, and perhaps especially, if they’re going to be one of your biggest clients.
- They balk at your pricing. You don’t have to talk about dollars during the pitch, but how they handle your pricing and any upfront payments will also tell you a lot about how things are going to go. Listen to how they respond to your proposed pricing. Some firms tease their prices out before or during the pitch as an opportunity for prospects to disqualify themselves early and save everyone time. Trying to nudge the number down a bit is fine. Trying to knock it in half, or attach strings, is a real red flag. Also, insist on an upfront payment of some kind — whether you call it a “deposit”, “last month first,” “prepayment” doesn’t matter. It’s not as much a matter of trust as it is a chance to see how their accounts payable systems work.
How good are you at saying no? Let us know in the comments below.