There are many good reasons to turn down business that you could win. But the most important reason to turn down business is when taking it would mean unintentionally changing your business strategy.
Some sales organizations end up changing their strategy to lowest price without meaning to. They start selling to prospective clients who sell lowest price to their own clients and customers, and just like that, these unsuspecting sales organizations are part of the lowest price value chain. They rationalize the decision to take the low price (and low margin) by extolling the great virtues of volume and revenue, underestimating the impact it has on their business, the additional time it takes to serve their large, low margin client over their smaller, higher margin clients, the challenges of executing without the necessary profit to do so. I once heard someone jokingly refer to this strategy by saying, “We’re losing money on every transaction but we’re going to make it up on volume.” The additional volume isn’t a benefit when it crowds out new, high margin clients.
You are better off selling to your dream clients, the clients for whom you create breath taking, jaw dropping, earth shattering value. By creating the value you are meant to create for clients who benefit from it, you will be allowed to capture an appropriate portion of that value. If lowest price isn’t your strategy, winning clients on price will change you . . . for the worse.
Agreeing to provide the lowest price isn’t selling. It’s the opposite of selling.
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