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When It’s OK To Say No To A Customer

When given the opportunity to contribute an article on this subject matter, I immediately thought that this topic could be summed up in six words: “When they really **** you off!” But that’s too easy and obvious, so let’s delve a bit deeper. Let’s begin at the very early stages of customer development and progress from there.

Not a Product Match
How many times have you experienced this situation? After making sales calls all day without much success, you’re finally invited into a customer’s office. He tells you he’s in the market for some equipment, and he’s upset with his current supplier because of some real or perceived transgression. It doesn’t get much better than that, right? Then, he says that he’s currently using a man-up turret truck and a couple of reach trucks, and it’s time to replace them all. There are some occasions when a customer is using a specific type of equipment “because that’s what we’ve always used,” so you should always ask questions and tour his facility to make sure that what he says he needs is the best solution. If he indeed needs narrow aisle equipment, and if your strong suit is Class IV and Class V product with a supplier that doesn’t even offer Class II, then in fairness to both you and the customer, it’s time to say no. You can’t be all things to all companies all the time.

Credit Problems
Let’s keep the scenario the same, only this time the customer wants to replace his three 5,000-pound pneumatics. You’ve got 20 percent of your ITA in Class V, so it’s a great opportunity. You prepare the quote, negotiate a bit and he signs your order. Life is good! You take the purchase order back to the office, and then you find out from your credit manager that the customer’s credit is so lousy he needs a co-signer to pay cash! After all credit avenues have been exhausted, it’s time to say no to this customer. The only thing worse than not having any business is having business and not getting paid for it. Long ago, I made a deal with my banker. He doesn’t sell forklifts, and I don’t lend money.

Other Potential “No” Scenarios
Some might think it’s acceptable to make the “no” decision based strictly on the profitability of a transaction; for instance, if an error was made in calculating the cost, your customer has signed the order and the error isn’t discovered until it’s time to deliver. You can’t say no because your error results in a loss. Your honor and reputation are at stake—complete the transaction. The customer is obviously going to get a very good deal, so it’s good business to make him aware of it. It doesn’t do any good to give something away if your customer doesn’t know it. You’ll be in his good graces afterward, and hopefully he’ll extend the opportunity to make it back in the future.

Occasions will arise when a customer is being totally unreasonable, particularly demanding and using a tone of voice that is more condescending than you think you can bear. Is this an opportunity to tell him no? Perhaps, but not until you step back from the situation, investigate the details that caused it to arise and consider it from his point of view. Even then, “no” may not be appropriate. If he’s a good customer having a bad day, don’t act hastily and let him ruin yours. Negotiate a reasonable solution if you can. On the other hand, if he’s a customer that makes a habit of being unreasonable, of questioning every transaction, who is rude to your employees or co-workers and is always on your slow-pay list, it’s a great opportunity to say “no” and to encourage him to do business with your competition. While they’re busy trying to placate him in the future, you can work to convert some of their good accounts who are now upset that service is slow because your competitor is spending too much time with this customer!

This year marks the completion of 33 years of employment in this industry for me, and I can still count on both hands the number of times I’ve said “no” for this last reason. But each time it was a firm “no” with a full explanation, and each time it was cathartic.

Material Handling Equipment Distributors Association
Warren Cornil Meet the Author
Warren Cornil is president of Narrow Aisle Inc. and CEO of Sunbelt Industrial Trucks, located in Dallas, Texas, and on the Web at www.narrowaisleinc.com and www.sunbelt-industrial.com.

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