Grow Your Business, Just Say NO
in today’s economy, you must say NO to
customers, employees, proposals, and much more that aren’t right for you.
new book by consultant Kim DeMotte tells you how, when and why to say that tough
little two-letter word.
Louis, MO (September
2003)—Wouldn’t you like to make every sales call really count? Every new business proposal? Every contract you sign
with a customer? Of course you would. Time is money. Resources, especially in
our claustrophobically-tight economy, are limited. You know these realities. But
still, you keep telling your team to get their collective foot in every door
that will open for them, to pursue any prospect who shows a glimmer of interest,
to get those contracts—however anemic—signed, sealed and delivered. After
all, when dollars are scarce, every dollar counts, yes?
. . . no. Too much yes is your
problem, says Kim DeMotte, author of the counterintuitive new book The
Positive Power of NO: how that little word you love to hate can make or break
your business (2003, Facts on Demand Press, ISBN: 1-889150-40-1, $17.95).
Like the people-pleaser who agrees to every request until she eventually
collapses in a heap of exhaustion and resentment, the yes-addicted company
spreads itself so thin that it ultimately loses its identity . . . and is of
little use to anyone.
is a powerful word indeed, and it’s surprisingly hard to say,” asserts
DeMotte. “Fear drives many companies to accept any new business, even if it
doesn’t make strategic sense for them. And sometimes the problem is that the
company has no strategy, unless
desperation counts as a strategy. But filling your net with minnows leaves
little room for the big, healthy, profitable fish that will swim with your
company instead of against it. Saying yes to the big fish requires that you say no
to the minnows. No defines yes. If you
don’t learn this vital truth, you’re not going to survive.”
Positive Power of NO
is filled with practical strategies and tactics on living by this mighty little
word. Besides DeMotte’s friendly yet no-nonsense voice, it offers advice from
a select group of his business experts and colleagues—each of whom contributes
a chapter—on how the Power of NO™
applies to issues like change, ethics, hiring, and communications. The
result is a collection of individual essays that are intricately connected to
each other by their commitment to the necessity of no.
course, the customers you serve are the most visible manifestation of who you
are—and those you don’t serve
define who you are not. That’s why
DeMotte urges you to put plenty of thought into this vital decision. Here are a
few of his tips:
the value of a clearly defined “red ring.” Throughout his book, DeMotte and his team use the image of an
archery target to illustrate how a company should set its limits. The yellow
bull’s-eye in the center represents those customers to whom you say yes.
What’s more critical, however, is the red ring encircling your bull’s-eye.
It represents no. In an Ideal Target, the red ring is clearly defined and sharply
delineated. It should not be paper-thin and ringing a huge bull’s-eye (DeMotte
calls this an “Anything Goes Target”), bleeding into the bull’s-eye
(“Big Fuzzy Target”), or on the other end of the spectrum, overly thick and
surrounding a pinpoint of yellow (“Anal Target”). The Positive Power of NO
details how to set the limits that make up your Ideal Target—but understanding
the necessity for doing so is the first and most important step.
the six checkpoints of financial decision-making. So . . . how do you
sharpen that critical line between red and yellow? How do you decide which
customers benefit you and which ones do not? Maybe you don’t want customers
with orders under $100,000 . . . or those who pay over 60 days . . . or those
who demand lower quality specs. The Positive Power of No says there are six
“checkpoints” to examine in the decision-making process:
all areas of the business represented in the characteristics? Identify all departments that are the roots of the issues. They
should have the information, reports or numbers that you’ll need to define
limits consistent with corporate goals? If they’re not, your employees will not know what to do when a
conflict arises and they will bring all such problems for you to resolve. Or
inconsistent limits will be followed and your company will end up
straying from its strategic path. Or
you’ll go broke.
limits be quantified in relationship to corporate goals? Make sure your reporting system is telling you that sales volume
actually does equal better profitability, and that a customer with
$100,000 in annual sales will provide the desired level of profitability
(because they have in the past and do now).
applied to the customer base, do limits produce strong dividing lines?
If not, then review three areas for their accuracy—the relationship between
the stated limit and the desired limit, the reporting system for current
business and the weighting of the limits to make sure the most important limit
has the most effect on your list.
all limits be routinely reported and quantified? Your system must be efficient and easy to use. It will become part
of your everyday procedures. And the limits will be ingrained in your culture
with regular use and reporting.
major issues in feedback?
Always look for clues that you need to adjust your limits. You can’t change
them on a whim or bend under the pressure to include a particular prospect.
Changing your limits requires careful consideration.
qualify prospects; DISqualify them. Prospecting is sifting, it is the process of sorting out what is
useful or valuable. It’s ironic that we often hear the term “qualify”
associated with prospecting. A person prospecting cannot qualify anyone or any
company, any more than you can force useless silt to become gold dust. Sales
managers do their sales process a gross injustice when they implore their
charges to qualify prospects. In its zeal to do so, the sales force may ask such
questions as “Do you think you will ever, ever, ever need our widgets?” Then
the prospect decides there is just no cost in saying maybe, or even yes. And the
salesperson’s heart grows lighter as he drives back to the office. “YES!”
he tells himself. “I've got one!” You can avoid this scenario by having a
filtering process based on a sharply defined target. A prospect is either a
bull’s- eye or he’s not a bull’s-eye. The salesperson hasn’t qualified
a prospect—the prospect has failed to
disqualify herself! See the difference?
to disqualify can be very costly.
DeMotte offers the following example: “A publishing company I worked with had
a direct mail database of about 14,000 organizations,” he says. “Every year,
the company would send about $27 worth of direct mail to each of these names.
Add that up. It's $378,000 in direct mail costs to ‘prospects.’ Yet, in one
30-day telephone sampling of this database, the company discovered that 42% of
these prospects were either out of business, had moved, no longer had a working
phone number, or didn't have any use for my client's products or services. They
were spending $158,760 sending mail to people who weren't even there or would
never need their product or service.”
prospects using logical and emotional criteria. Logical qualification is a measurement of how much you or your
company will have to bend (expand your bull’s-eye) in order to do business
with this prospect. It involves questions like “Do you ever buy widgets?”
“Any plans to ever buy widgets?” Emotional
qualification is a measurement of how far your prospect has to bend (expand
his bull’s-eye) in order to do business with you. Perhaps he’s satisfied
with his current source or he buys from his brother-in-law or he just doesn’t
like you. If prospects don’t have LQ and EQ ratings within your present
numbers, they are disqualified. Forget them and move on. When you find prospects
who fail to disqualify themselves on both scales, voila!
These are the ones you are looking for! (For visual thinkers, DeMotte
illustrates this principle through the use of numeric grids.)
okay to move your limits—as long as you do it ON PURPOSE. Suppose you’re getting a lot of
requests for bids on green widgets. So far, you’ve allowed green widget buyers
to disqualify themselves because you don’t make green widgets. You can make
the decision to go into the green widget business, but do it on purpose. If you relax the limits, it should not be for one or two
prospects, but because you think there’s an untapped niche and you can budget
for a green paint line and make it work from a strategic point of view.
Likewise, you may find that a limit of annual business of $50,000 is so tight
that you find one every two years. So you might decide to lower that limit and
design methods to handle $30,000 customers more profitably—on purpose.
live by your brilliance. A
big part of determining who your customers should be is knowing what you do better than anyone else and
communicating it. This is termed Brilliance Marketing. It encompasses and affects virtually everything your company
does, from product development to advertising to hiring to, yes, sales. Most of
all, it’s a holistic way of doing what comes naturally—which, in itself,
draws the right customers to you. Brilliance Marketing steps back and takes a
good hard look at what your firm’s individual gifts are . . . and are not . .
. and then finds natural, even easy, ways to build relationships and reap sales
based on those gifts. It is never frantic, because the Brilliance Marketer knows
his or her offer is sound and appealing and can afford to wait for customers to
be ready to buy.
“Just saying no” has often been derided as an overly simplistic
approach to a very complex world. But as DeMotte is quick to point out, just
because no is a simple word, saying it—and meaning it—is not always easy.
“It takes real courage to establish a limit and
give your sales team marching orders NOT to take any business with gross margins
under 7%,” he writes. “It takes real guts to look at an applicant for a
critical position that has been vacant for fourteen months and pass because the
applicant doesn’t have required experience. The big test will come when you
want so badly for someone to commit to your proposal, but you can see they’re
struggling to agree. Helping them say NO moves everyone toward the most
successful conclusion. Your counterpart is relieved by not committing to
something that was outside his limit (although he may not have realized it). And
you don’t end up with the inefficiencies and the ineffectiveness of
# # #
Kim DeMotte is the founder and managing partner of Power of NO™, a St. Louis-based firm specializing in improving corporate sales and management effectiveness. He works with companies developing strategies for saying "NO" when and where it is appropriate. He has successfully owned and operated two distribution companies, a manufacturing company, two service companies, a software company and a consulting firm. He can be reached at kim@powerofNO.com or at (877) 245-8250. For more information on The Positive Power of NO, visit his website at www.powerofNO.com.