Why saying “No” to your customers can be good for your business

When learning about customer service, most of us discuss and debate the famous quote by Mahatma Gandhi:

“A customer is the most important visitor on our premises. He is not dependent on us. We are dependent on him. He is not an interruption in our work. He is the purpose of it.

He is not an outsider in our business. He is part of it. We are not doing him a favour by serving him. He is doing us a favour by giving us an opportunity to do so.”

If this is the case then why am I writing about improving your business by saying saying “No” to your customers?

Over the last thirty years or so in business I have learned one thing: Customers want what they have been promised when they were promised it. Read that line again: Customers want what they have been promised when they were promised it.

Is this ringing any bells? Ask yourself this question: If they are happy when they get what they are expecting when are they likely to be unhappy? Could it be when they don’t get what you promised them.

If things go wrong can’t I just fix them.?

In any business things can go wrong from time to time and sometimes the problem is nothing to do with you.

It may be that you’ve ordered your stock in good time and your supplier has not delivered, or perhaps your flight to a project meeting has been cancelled.

When this happens I think  of the quote by Donald Porter, VP of British Airways, a company famed for it’s customer service:

Customers don’t expect you to be perfect. They do expect you to fix things when they go wrong.

If you are dealing with something beyond your control you have to own the problem and deal with it as best you can.

This is not just my opinion. Miss Manners, a.k.a. Judith Martin, dubbed The High Priestess of Protocol by Frequent Flyer magazine, provides a case in point.

She described two recent airline flights, both delayed due to bad weather:

On the first, the crew did little to inform the passengers of the flight’s status, glumly responding to requests for pillows, blankets, drinks, etc.

The second crew apologized for the delay, offered advice on passengers’ scheduling problems, kept everyone informed, and generally tried to make things as pleasant as possible.

As the article asked “who do you think she will fly with next time?”.

The “yes” trap

When faced with a valuable customer there is a temptation to agree to their every demand in order to keep the business, and It’s only when the customer has signed up that you are faced with the reality meeting impossible deadlines in return for a minimal profit margin.

The temptation at this point is to start trying to recover your profits by skimping on the specification. This is a bad place to be in.

You are about to turn one problem, the really bad contract, into two problems: a really bad contract and a seriously disappointed customer.

I refer to this situation as the “yes” trap and it is trap which doesn’t let go. Having made the bad contract and made it worse by trying to cheat on the specification the next temptation is to lie to the customer about why deadlines have been missed. Do not do this.

If you give into temptation and lie to a customer about missed deadlines the only certainty is that you will end up with a very unhappy customer, one who is unlikely to offer you repeat business (which is where your real profit is found).

The likelihood is that you will end up on their “Unreliable Supplier” list. Even worse they are likely to share their experience with their colleagues and professional associates.

Is this what you were thinking of when you were so busy saying “yes” to their every demand?

What’s the option

OK, so you don’t want to disappoint your customers. Neither do I. When thinking about this I always come back to my starting point: Customers want what they have been promised when they were promised it.

The trick, if it is even a trick, is simply to be straight with your customer from the start and don’t grab at illusory short term gains at the expense of building a longer term relationship.

To do this successfully and consistently you need to have a minimum standards for profitability and delivery that you will not go below. It’s easy to see that work for no profit is no work at all but it is not always clear that over-promising can actually cost you money in the longer term.

If you are tempted to make unrealistic offers to a customer just remember the phrase “Unreliable Supplier”  from the example above.

If you do not believe in “unreliable supplier lists” just think about your own experiences. Are there organisations that have let you down that you no longer do business with?

As an example I no longer do business with two well known laptop suppliers because of broken promises and many people I know have similar, if unwritten, “do not use” lists.

Toby Bloomberg of Bloomberg Marketing uses the phrase “Under promise, over deliver” when talking about customer service while other talk about “managing the customer’s expectations”.

What ever the words used the sense is the same: make sure that customer understands what they can realistically expect before they sign up.

My example

I believe that my 1920s house still has its original roof and, not unexpectedly, it is rather tired and in need of some TLC. Sorting out an old roof is not cheap but has to be done right, so I asked four local firms to give me a quote.

Of the four one stood out head and shoulders above the others. It wasn’t because they were the cheapest (only second cheapest) or could do it quickest (they actually had the longest lead time). What stood out for me were two things:

The first was they didn’t try and upsell. By this I mean that when I mentioned that our guttering, which is very much younger than the roof itself, perhaps also needed some TLC the person doing the quote spent a good 15 minutes inspecting. Only then did they suggest that it could be simply be fixed up with some new hangers and a bit of tweaking.

The second point was that he spent a similar amount of time telling my wife and I very clearly that the work would create a level of noise and dust no matter how carefully they did it, and that there was a risk that the vibration from the work could cause some cracking in the wall plaster.

None of the other firms mentioned these things and one even claimed that I wouldn’t know they were there. For me, that claim alone was enough for me to decide that I would not be using the services of that company.

Coming back to the theme of my post, how do you think I will feel if there is some noise and dust, and some plaster cracking when they carry out the work (and they will be carrying out the work). I can tell you: I will be fine because I was told about it before I agreed to the contract.

Saying “no” is not the soft option

Some people argue against saying no, feeling that this is in some way a soft option. I have some sympathy with the idea, but only up to a point.

People who are serious about making their business successful will always go the extra mile for a customer but, and this is a big but, they recognise when the extra mile becomes the impossible mile.

At this point they call on an important skill called “saying no nicely”

How to “say no nicely”

In my experience they key to saying no nicely is another “N” word: negotiation. No-one like a blunt “No” to a request but most people respond favourably to a discussion about alternatives.

Take the example of a customer who wants a price that leaves you with no profit, something that in most situations you want to avoid.

In this situation consider offering an extended warranty instead, or perhaps coming up up with a longer term contract or bigger order that makes the price worthwhile.

However it may be that the customer simply doesn’t have the money to meet your asking price in which case you need a different strategy.

In this case the best approach may be to spend time talking with the customer, which is always a good thing to do anyway, and see what alternatives you may be able to offer.

Who knows, you may be able to find a different way of approaching the problem which can actually save your customer money.

If it seems a big odd to be trying to talk a customer out of buying something from you just remember the example of my roofing contractor.

He was honest with me and didn’t push me to accept paying £1,000 for the unnecessary additional work.

His reward? He is now my roofing contractor of choice and over the last week I have recommended him to two other people. Not a bad return for him giving up about £200 additional profit.

Making your choice

Next time you are tempted to say “yes” to an unrealistic customer demand just remember the choice you are making: the short term gain that gets you on the  “Unreliable Supplier” list or the taking the longer term view that get you “Preferred Contractor” status.

I hope that you have enjoyed reading this post. If you have thoughts on what I have written so far please leave a comment. Also if you have an idea for another business topic let me know and  I’ll be delighted to find a space for it.

Thanks again

Bob windmill

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