The Value of Saying No to Potential Clients

The Value of Saying No to Potential Clients

Saying No: KeyboardSure, most agencies claim to be super selective, but when push comes to shove, most truly aren’t. The economics of the traditional agency setup prohibit selectivity – when times get tough, most agencies have to take whatever they can get to cover overhead and expenses.  

Agencies and consultancies are naturally built to take on projects and retainers, and given that there is so much competition out there, it can drive the price of your work down, which means you try to take on more work with the same size team.  This is a losing battle and puts you in a hole in every way.  The question then becomes, how do you change the battlefield and put yourself in position to take on fewer, yet higher paying clients?

We have built our studio the opposite way – by selecting clients to work with first, and then building our team around the needs of those clients. This allows us to have a small and powerful core team on board full time, and trusted, local designers and developers on an as needed basis to fill in the gaps on a per project basis.

Our selective approach to new business has allowed us to keep our employees motivated and drive success for our agency. However, this model will only work if you and your team is comfortable with saying no to potential business.

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Why and when to say no

While the possible financial consequences of being selective can be extremely vital, it’s equally important to note the consequences of taking on a client or project that isn’t the right fit for your team. Challenging your team is essential to keep creativity and motivation high, but when the project scope or timeline doesn’t work, you need to know how to pass on a project. You need to manage expectations, and set your team up for success.

As the leader of your team, you also need to be consistently aware of their existing workload. Will this new project overwhelm your team, causing the quality of work (on all projects) to decline? Keeping track of a project’s hours using a time-tracking app will help you to keep track of workload, and refine your new business process. Following every project, analyze whether it was successful or not based upon your estimate, both from a time and cost perspective. By understanding how much time your team needs for a given project, you’re in a better position to assess whether or not you even have the capacity to take on a new client.

Your team’s bandwidth shouldn’t be your only deciding factor for saying no to a prospective client. Here are some of my rules for knowing when to say no to new work:

  • Your gut tells you to say no. This is number one to say no. Projects that start out with a funny feeling rarely, if ever, go to a happy place for either side.
  • The budgets don’t align with the expectations. Don’t put yourself in a position where a client is demanding the world and not willing to pay much to get it. It hurts both sides.
  • The client is in an industry that you morally don’t believe in. We’ve had all kinds of requests in the past and turned down some pretty big opportunities, because they were for things that we as a company fundamentally didn’t believe in.  If your heart isn’t in it, it’s probably not going to end up being profitable or healthy to work together.
  • The client isn’t someone you get along with, and/or they don’t have a growth mindset. Clients stuck in the “this is how our current website does it” mindset will stunt your growth and creativity as an agency. Look for characteristics in clients that show that they are driven to be the best based upon their past decision making – for instance, how do you feel about their brand and what process did they go through to hire their branding firm, if they did hire one at all?

At this point, you’re probably realizing that it’s important to say no to projects in a balanced, thoughtful manner. When you do say no, though, you should do so with respect and in a helpful manner.

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How to say no

The act of saying no is almost as important as the decision to say no. You obviously want to do so respectfully and in a helpful manner as to not alienate prospects or earn a negative reputation for your agency’s brand.

To combat this, we’ve partnered with agencies that target potential clients that we don’t typically service and we’re happy to refer those client types to these teams. Most of these relationships were forged through active research. We found and spoke with local agencies that are smaller in size and budget, but have a similar aesthetic and work ethic.  This allows for a smooth referral process from our agency to our partner agencies.  If you’re going to work with partner agencies, make sure you really know them well so you can make the appropriate introduction(s) for the leads you’re saying no to.

Side note: In addition, this can work in the opposite format as well – try to find agencies that are larger to refer work to you. It can be a great passive source of leads for your business.

Here’s an example of an email template we use to say no to prospective clients:

NAME,

Thank you so much for taking the time to speak with me yesterday. After reviewing the project scope, budget, and timeline internally, we unfortunately have to bow out of the running for your new website.

If you’re open to it, I would be happy to refer you to 1-2 agencies that will be able to better fit your needs. Please let me know if you’d like me to, and I’ll send the introductions.

It was a pleasure getting to know you, and I’ve connected with you on LinkedIn. Please keep me posted on your progress, I’d love to see the new website when it goes live and I’m happy to provide any feedback or assistance in the process.

Good luck and thank you so much for your interest!

YOUR NAME

Once you’ve referred a client to 1-3 potential agencies for them, your work is done.  You’ve been gracious and helpful in saying no, and that’s the most you can do.  In rare instances, clients grow enough that they’ll come back to you to work together and/or refer other work to you.  They know that you were honest with them and made sure to help them out in every way possible. They gain a level of respect for you that you wouldn’t have had otherwise, and that can be a truly valuable long-term relationship for you both.

At the core of this issue, there’s one notion that stands out from the rest: to be successful, you must be self-aware, and know your team well enough to know when a project won’t be the right fit. Say no when it’s obvious to do so, be helpful every step of the way, and take calculated risks to build your portfolio and camaraderie on the team. Your team, your clients, and you yourself will be thankful in the long run, and your yeses will come with double the enthusiasm and excitement as they did in the past.

The balancing act of saying no

While “saying no” when appropriate seems like it’s a great choice, it can have its downsides as well. For instance, saying no too often can also put you in a tough place financially. This is the most obvious downside, however others exist as well. If you say no too often, you also won’t have much new work to show. Sometimes, taking on projects that have the potential to help your business grow can be valuable too.  This can allow you to build momentum with a consistently updated web design portfolio and have more clients singing your praises. Lastly, if you’re saying no too much, your team can get bored and/or become uninterested. This is obviously a no-no and can lead to attrition.

It’s a balancing act to always be selective and smart.  You build your agency one project at a time, and taking on the wrong projects can hinder your growth considerably.  Be smart, thorough, and helpful every step of the way and you’ll see your agency flourish.

Have you ever declined a potentially lucrative project because it wasn’t the right fit? Tell your story in the comments below.

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About the Author

Anshey Bhatia is the Founder at Verbal+Visual, a digital agency that creates beautiful ecommerce experiences for lifestyle brands they love. He believes that digital experiences have the power to transform the world.

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