When to Say No to a Customer
For many years, “the customer is always right” has been a mantra of doing business. After all, when you want a customer to say yes to buying your product or service, it helps to say yes to them. And creating a positive and enjoyable customer experience leads to sales. Which means that telling a customer no is the last thing you want to do. So it may surprise you that there are times when saying no to a customer is actually a good thing. Not just for you, but for your staff and your bottom line. Here are 4 times when to say no to a customer
#1 Say No to Protect Staff
A business doesn’t exist without revenue. And clearly, revenue doesn’t happen without customers saying yes to purchases. So why say no to a customer? One good reason is to protect your staff.
Why? Because a business also needs staff. Especially a service business. You must have qualified trained staff available to do the work to fulfill client requests and bookings. And these days, labour shortages are making this very difficult. Small business owners are facing huge challenges in hiring people and growing their team. The US Chamber of Commerce reports that there are simply fewer people looking for work since the end of the pandemic.
Which means that staff retention is more important than ever.
Also, if staff is offended by the way a customer behaves, they can simply quit. And finding a great new hire may be more difficult than finding a new customer.
So say no if a customer says or does things outside the code of conduct for your business, and causes your staff to be uncomfortable. Whether it is a racist or homophobic comment, or anything sexually inappropriate, this is when to say no to a customer. And be sure to let your team know that you have these policies in place. Knowing that you are committed to providing them with a safe working environment will help you attract and retain great staff.
#2 Say No to Reduce Risk
Another time when to say no to a customer is when their request creates a risk for your business. How to define risk? That depends. It’s different for every business. So consider what matters in your business.
Here is an example. Say a customer requests that your team do an additional task or service that falls outside the scope of what they are trained to do. Sure, the customer would be thrilled if your staff went ahead and did it. And they may tell all their friends and neighbours about how your staff went above and beyond, which would bring in referrals. They may even tip your staff, which would make your employees very happy.
But.
What if your staff gets injured doing that thing they were not trained to do? Like they are there for a landscaping project and then climb up a ladder to get the frisbee off the roof? Not only do you have an injured employee and a gap in your booking schedule, but you have a world of hassle and expense dealing with insurance.
And by the way, your business insurance and workers compensation is not going to want to pay out on a claim arising from staff doing what is NOT in the scope of services for your business.
Which is exactly why it’s better for your business and your staff to say no to those extra requests that fall outside of your normal business operations.
#3 Say No to Protect Profits
Now, you may be wondering – how is saying no to a customer going to protect profits? In fact, there are situations when refusing a customer request is the best thing for the revenue and profits of your business. For example, when customers ask for extras that are over and above what was in the contract or service agreement. Sure, there are times when wowwing your customer is the way to go. However, it is also possible that saying yes to requests for extras just eats into profits.
As explained in the example above, customers may ask for additional tasks and expect them to be done for free. Though going up that ladder to get the frisbee off the roof may not seem like a big deal, if the whole thing took 30 minutes, that adds to the cost of labour for the job. Especially if the customer then asks for some other little tasks to be done. Because they may be thinking “since you are here anyway, could you please….” But time is money in a service business, and you have to contain the work to what was agreed upon.
Of course, if the customer is asking for extras that you normally do and are willing to pay for them, then say yes! Because that is not eating into your profits. For example, your customer comes in for a haircut and then asks to get their hair coloured. If you have the time to do this extra work and they are paying for it, this is a great thing for your business.
To be clear, when to say no to a customer is when they ask for extras to be included in a project with a fixed price. Agreeing to do freebie extras sets a dangerous precedent with your customer. Now your customer will expect yes to all their requests for little extras. And all the people they refer to your business will ALSO expect yes to all their requests for unpaid little extras. This snowballs pretty fast and will end up costing your business money.
#4 Say No to Protect your Brand
Branding is an important way to differentiate in a crowded marketplace. A brand is how to stand out, get noticed, and land customers. So protect your brand and say no to anything that will dilute or damage it.
This can be tough for new businesses or during quiet seasons. After all, when a customer wants to hire your company, you want to take the business. However, there are times when it’s important to say no because it will just cause confusion and unhappy customers later on.
For example, you are building a house painting business. Your brand values are quality, professionalism, and reliability. This shows up in your tagline, website copy, and marketing. Then a customer who hired you for a small job painting one room in their house asks if you can do some handyman type tasks. Since you have the tools, the time, and want the extra income, it’s tempting to say yes. But this is when to say no to a customer. Because you are building a house painting business. So stay focused on house painting.
Just think about what happens when customers think you do home repairs and handyman jobs. These are the referrals you’ll get. And these are what your online reviews will be about. Imagine a potential customer checking you out on Yelp or HomeStars and reading “they did a great job installing our ceiling fan.” This is going to cause confusion when your business name and brand message is all about providing quality house painting. And creating any uncertainty in the decision making process of your audience is when you’ll lose out on a lead.
Remember, KFC built their brand to be about chicken. They didn’t dilute this association by adding pizza to their menu!
Conclusion
Growing a business takes time and consistency. And also, focus. So there are times when saying no to a customer is the right thing to do. To protect the safety of your staff, to reduce risk, and to protect your profit margin. Most of all, to ensure that the actions of your business is aligned with your brand and reputation.
Now that you understand 4 times when to say no to a customer, read this post to learn strategies for HOW to say no.
When to Say No to a Customer Read More »
