Turning Away New Business Isn't Always A Bad Idea

BY Jessica Helinski
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Turning away business may seem like a ridiculous, and costly, thing to do. But, salespeople should consider doing this if they’re faced with a prospect who may actually cause more disruption than what their business is worth. “Some folks think it’s never good business to turn away business,” writes Frank Sonnenberg in an article for his blog. “I beg to differ. In fact, there are times when new business will cost you money, tarnish your reputation, and possibly even damage the long-​term prospects of your organization.”

He urges reps to never say never when it comes to turning away business, encouraging them to look out for certain signs. Not sure what those signs are? He goes on to define red flags that signal you may be working with a problematic prospect or client. If you find yourself involved in any of the following situations, there’s a good chance you should reconsider the deal.

Turning away business: when to say 'No'

If you find yourself slashing and burning prices, you may not be doing yourself any favors. If a prospect demands a major cut in costs, there’s a chance that you won't come out of this deal a winner. Skimpy profits just aren’t worth the time and effort that you will likely put into this relationship. Plus, you’re minimizing the value of your product or service by slashing prices. Finally, you are showing the prospect that you’re willing to lower prices, which sets you up for future price-​cut requests. 

Another sign that you should be turning a prospect away is if, deep down, you know that you won’t be able to fully satisfy the prospect’s needs. Even if you think it will be a quick and easy, yet short-​lived, deal, it likely won’t be worth it. You risk not satisfying the prospect, which can actually harm your reputation. “If you think good news travels fast, know that bad news travels faster,” Sonnenberg warns. “The fact is, a one-​time sale should never trump a long-​term customer relationship.” Turning away will be your best course of action.

In a similar vein, accepting unrealistic demands also sets you up for failure. Again, you aren’t being honest about how well you will be able to deliver what is best for the prospect. Also, you could be getting yourself involved with someone who will be a pain to work with down the road. “Some customers are high maintenance,” he writes. “They’re demanding, unreasonable, and expect special treatment. The truth is, you’ll never make those customers happy.” 

Not only will you be enabling this behavior, but these high-​maintenance customers are often quick to voice their displeasure to others. Turning away these types of prospects will save you a lot of drama (and prevent a tarnished reputation). 

Losing focus is another warning sign that the relationship might not be in your best interest. If you feel a prospect is going to require a lot of time and energy, you need to consider how you will balance these demands with your other customers. Will you still be able to serve your other customers well? Or, will you have to cut some corners in order to satisfy the new client? Sonnenberg warns, “…if you let ‘high-​maintenance’ customers distract you from your top ones, your best customers may feel neglected and leave for greener pastures.” Turning away this prospect could actually save your deals with others. 

While no one wants to turn away new business, there are certainly times when doing so is the best choice. Don’t sacrifice your reputation, time and energy, money, or your customers for a deal.

As Sonneberg points out, “The saying goes, ‘Knowing when to walk away is Wisdom. Being able to is Courage. Walking away with grace, and your held head high, is Dignity,’ ”