326 When To Say "No" To The Buyer In Japan

The Cutting Edge Japan Business Show

Normally, as the seller, we are getting told “no” in sales, rather than the other way around. When salespeople become desperate to hit their numbers, they start to do crazy things. They start telling lies to the buyer, they exaggerate the scope of the solution, they savagely discount the price, they overpromise on the follow-up, they agree to horrendous delivery dates, they become visibly agitated during the sales call. All bad.

When we meet the client, our brain has to get into a specific gear. That means we are focused on how can we contribute to build the client’s business? What can we do that will grow the buyer’s revenues, cut costs or expand market share? That mental gear is entirely different to questions such as “how will I make my monthly sales quota?”, “how will I stop being fired?”, etc. The latter are solely focused on you and not the buyer and this impacts what comes out of your mouth.

If we are doing a proper job of prospecting we will always have alternatives. When the pipeline is too thin, desperation sets in. The existing clients get worked over, to try and squeeze blood from a stone, because there are no other options. It is easy to talk to an existing client than go and find a new one, which is so why salespeople hate prospecting – it is hard and tough work. Nevertheless, prospecting and building pipeline are the keys to positioning ourselves as sellers.

When we have a strong pipeline, we are not dependent on any one sale. When we are doing the questioning phase of the sale’s call we start to understand what the client needs. We may realise that what we have isn’t really a fit. When we don’t have pipeline, we start to think how we can make it fit anyway. This is desperate thinking and ultimately very damaging to our trust, brand and reorder possibilities. We are thinking single order, rather than the start of many orders.

We may know that to take on this project is going to put a lot of pressure on the back office or the supply chain within our organisation. We have to keep in mind the opportunity cost that this deal represents, not just the income it will generate. We are impinging on other better quality work to do this deal. If the pricing for doing it was at a premium, it might be justifiable but that is usually quite rare. Or if the scale of the work is considerable and sustained over a long period of time, it might be viable. In fact, usually, a bad deal more often than not comes with other ugly lumpy bits attached to it that are not very attractive.

We are better to say “no”. When deals come that are outside of our usual scope and therefore require a lot of work, the price needs to be high, to warrant doing it. If it is not, then get back to being busy building pipeline and let that deal flow to a competitor, who is either better suited to handle it or more stupid than we are. It hurts to give business away to a competitor, but that is the better choice than damaging your own operation.

A deal came to me though LinkedIn and the buyer was a substantial company in Singapore, with a strong brand name. The details of what they wanted to do in Japan though, had potential grief written all over it for me. It was somewhat related to what we do, but just that bit off to the side, where we would have to do a lot of work to make the project work. The money mentioned was so, so and really didn’t cover the extra work that would be needed. I introduced the deal to a “frenemy” rival company and asked if they were interested. They said yes and so I connected them with the seller.

I heard later, that they got hammered on the pricing, when they came to deal with the lower level operations people inside the company. A typical Singaporean business play where they are very tough on pricing, often known as the “squeeze all the juice out of the deal for the buyer” play. The “frenemy” took the pricing offered, rather than saying no or demanding more money and got smashed. It turned out to be a huge amount of work, sucked up a lot of their time and burned some of their contacts. This is exactly what I thought it would do to me too. I was glad I missed that bullet. Saying “no” was a very, very good choice on my part. It was also a one off deal, so there was no hope of repeat business. This made it less attractive, because I couldn’t see any return on the investment of time and effort.

I didn't take it because I had pipeline, alternatives, other potential business. Say “no” to a bad or marginal deal and keep working on building pipeline to find better deals. You will spend the same amount of time, but the rewards are vastly different.