Imagine for a moment that you are very, very hungry. Then imagine someone offering you a meal. Let’s say that this meal is one of your favorite dishes, as are all of the side dishes. It looks wonderful. It smells wonderful. It is going to be wonderful.
But right before you take a bite, with your mouth watering in anticipation, the person offering you the meal says: “Oh, by the way, I poisoned this whole meal. I really hope you like it. Enjoy!”
Would you eat the meal? Of course you wouldn’t.
Turning Down Never Turning Down
Sometimes salespeople, sales managers, and their companies believe it is wrong to turn down a deal. They worked hard to open the opportunity, they spent the time to build the relationships, they spent even more time building a vision, and they presented their solution and are easily the preferred choice.
They say: “You know, I hate to turn down a deal.”
But when a deal isn’t right for you and your company, it isn’t right. And swallowing hard and taking the deal doesn’t make it right.
Sometimes, the very best decision you can take is to turn down a deal.
If You Can Take It At This Price
Most of the time, when the deals you should turn down come to you they sound like this: “You are our first choice. If you can do what you presented at this price, you can have the business.” That’s as good as it gets for a verbal commitment. But the price is, of course, far lower than you quoted and far less than anything to which you can reasonably agree.
More often than not, it’s a mistake to take the business.
First, if operational excellence (or being the price leader) isn’t your company’s strategic choice for competing and winning in your marketplace, taking this business undermines your company’s strategy. If your company’s strategic choice dictates that you generate the profit necessary to serve your clients in a certain way, taking business at margins that don’t allow you to operate the way you need to to deliver is simply a poor decision.
One of the reasons that it is a bad idea to take the business at a price you should reject is that it often means not having the profit necessary to deliver the results that you promised. By not executing and delivering on your promises, you fail your client, and you suffer for having done so. You suffer through constant problems, constant complaints, and the reputation damage that comes from your client talking to other people about you and your company (when discussing you and your failures, they will never mention the fact that you priced your offering at a higher rate so that you could actually execute).
Finally, problems tend to cause even some mature businesses—and mature businesspeople—to find themselves at the short end of the maturity continuum. When there is pressure to perform, and when targets are being missed, people lose their patience, they lose their tolerance, and they say and do things that they ordinarily wouldn’t say or under better circumstances wouldn’t do.
Ultimately, they are mad at you for failing them. And they have a right to be: you agreed to perform and you agreed to the price. You took the poison.
Just as you wouldn’t eat a meal that was poisoned (regardless of how hungry you might be), you also shouldn’t take a deal that is detrimental to your immediate or long-term health.
Instead, make sure you never are never hungry enough to be tempted. Prospect well enough so that you never need any single deal, and qualify well enough that you know when winning will require a price lower than you can afford to give.