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To Grow Your Business, Just Say NO

Even in today’s economy, you must say NO to customers, employees, proposals, and much more that aren’t right for you.

A new book by consultant Kim DeMotte tells you how, when and why to say that tough little two-letter word.

 St. 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? 

Actually . . . 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.  

No 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.”

The 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.     

Of 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:

 

Understand 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.

 

Implement 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:

1.      Are 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 your limits.

2.      Are 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.

3.      Can 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).

4.      When 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.

5.      Can 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.

6.      Any 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.

 

Don’t 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?

 

Failing 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.”

 

Disqualify 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.)

 

It’s 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.

 

Always 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 less-than-total commitment.”

 

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About the Author:

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.

 

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