Saying no seems like the opposite of what you want in a sales conversation. We’d like to eagerly both give and receive yesses with our prospects. While it sounds good in theory, the power of saying no to unqualified leads is just as crucial for your business as bringing in qualified clients.
Many productivity experts and wellness coaches talk about the importance of saying no for time management and mental health. And it is 100% true!
Unfortunately, nobody talks about how important it is in sales.
Why Don’t We Turn Down Unqualified Leads?
There are plenty of salespeople out there who will tell a prospect, “We are not a good fit for everyone.” But then they still try to get the sale whether or not they should.
So, in essence, they’re just using that statement as a tactic to get the prospect closer to saying yes. It’s the whole reverse psychology thing.
Most have never told a prospect that they should talk with someone else because they are not a good fit for them.
Telling potential clients that they should take their business elsewhere for their own good is a vulnerable thing to do.
On top of that, most businesses measure their salespeople’s performance on their quota instead of other essential metrics. So purposefully removing leads from the pipeline feels scary because it could make hitting your numbers harder.
But unqualified leads can be just as damaging to your performance as turning them down.
How Unqualified Leads Hurt Your Business
There are many little ways a bad client causes tension or unpleasantness for a company. But two significant issues occur because of unqualified leads. And they are rarely if ever, the client’s fault.
Because most salespeople are encouraged to close as many deals as possible, they tend to oversell their products or services.
In those moments, it doesn’t even feel like lying. They’re just trying to close the deal. And we’ve all done it to some extent.
So, they promise the world, and the company can’t deliver. An unhappy client is left in the wake.
Whether or not they leave bad reviews or tell their friends to never buy from you, they lose some trust. For an enormous company, this isn’t a big deal. But for a small business, reviews and word of mouth can make or break them.
It’s not the client’s fault that the results didn’t meet their expectations or needs. It’s the salesperson’s.
That’s why having a documented process to qualify clients is so important. As much as you want to sell and help people, you should want them to have the best solution possible.
If it’s not you, be honest and send them in another direction.
Changing Your Standards
Similarly, salespeople tend to allow exceptions to their policies, procedures, or standards. This can hurt you just as much as a bad review can.
Maybe you lowered the price, but now you’re barely breaking even with this client. Or worse, when you factor in spending time with them, you’re losing money on the deal.
Perhaps you promised more attention than you typically offer. Now, you’ve thrown your other clients on the back burner because so much focus is dedicated to this one.
Or, you claimed you could do something your company doesn’t usually do. Now, the backend is scrambling to figure out how to make it work for this one client.
All of these scenarios pull focus from your business and your other customers.
If it’s a short-term situation, everything might turn out okay. But if it continues, everybody will suffer in the long run.
Your Process Makes Saying No Easier
Most people in sales are not running a repeatable process with their pipeline. Because of that, every interaction has so much pressure to end in a yes.
If you are unsure where the next lead will come from, you have to make the most of every single one.
There is no qualification process because you need every prospect to say yes and pay the invoice, no matter how that needs to happen. You develop a limited mindset instead of an abundant one.
The problems with this are numerous:
- Discounts that hurt your company
- Being taken advantage of by clients who don’t even realize they’re doing it
- Doing more work for less money
- Missing better opportunities because you’re bogged down by clients you shouldn’t have
- Not being able to make good on promises and hurting the reputation of your business
- Your client is unhappy or still struggling with their issues
Instead, ask as many questions as you need to determine if you’re talking to an unqualified lead.
Are their expectations feasible for your company? Do they have a sufficient budget? Are their values similar to yours?
Most importantly, do they have a problem you are best suited to solve?
The Pain-in-the-A** Tax Isn’t Worth It
Many salespeople and entrepreneurs will pad their pricing for clients they know will be difficult or require more work.
This practice is colloquially called the PITA Tax.
In some cases, it’s not a bad idea. Some accounts are too big or important to turn down, so charging them a little extra for your extra attention makes sense.
But usually, businesses end up regretting their PITA clients.
Either they end up needing more work or focus than the extra charge covers, or they cause mountains of stress and tension within the company.
Generally, it’s best to avoid charging the PITA tax altogether by simply saying no to unqualified leads.
Your Target Market Defines Your Qualified and Unqualified Leads
Wanting to appeal to everyone sounds good on paper, but it’s just not reality.
If you have one, your marketing department puts tons of effort and energy toward finding leads that fit your customer avatar. This alone makes your job much easier.
But unqualified leads still slip through. And that’s where your process comes in.
If you haven’t already built a customer avatar or developed company standards, now is the time.
One tactic is to think about your absolute best client, the one who can’t stop singing your praises, and document the values, traits, and expectations they have.
Another is to analyze all of the data you put into your CRM. Over time, you’ll learn where you lose leads in the sales cycle and what procedures and solutions you use with the most clients.
When you’ve defined who your best client is, it’ll be easier to say no to those who don’t fit the bill. It’s in their best interest as much as yours.
Unqualified Leads Are Bad For Business
Look, we all oversell ourselves, make promises we might not be able to keep or make exceptions that we probably shouldn’t.
Sometimes, we get lucky, and it all works out.
But don’t make it a habit!
As your business scales, your target market will evolve and expand. So yes, you do need to be open to accepting clients that might not have worked the year before.
But make sure you have the bandwidth and resources before you do that. And update your processes to reflect that growth.
Instead of wanting to help as many people as possible, shift your mindset just a bit. Think about helping a few people better than anybody else in your industry possibly could. And then use your qualifying process to help you find them.
That’s how you develop the best relationships and the highest reputation. It’ll also help you keep your sanity in the crazy world of sales.
Sure, you might have to settle occasionally. But when you have the right systems and processes, a great team, and a helpful mindset, you shouldn’t have to settle much.
Header image by Jen Theodore on Unsplash