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To succeed, you’ll have to reject customers that aren’t the right fit for your business

I want to talk to you about why it’s sometimes far more important to reject a potential customer or client than to say ‘yes’.  In fact, if you are building a business, get used to saying ‘no’ – a lot.

Having started my second cybersecurity company, after the successful sale and globalisation of my first one, I was reminded of the importance of saying no. It was while were in the exploratory stages of a relationship with a potential client. Although we didn’t reject them outright, we made it clear they weren’t a fit for our service yet.  If they changed things, upgraded their network security, they might be, but definitely not now.  Saying no might seem obvious, but it is never obvious or easy, because your instinct, especially in the early days of a business is to do whatever it takes to land and keep a client.  I learned this lesson the hard way a long time ago, and I want to share it with you now because the wrong clients or customers can literally ruin your business.

At my last company, earthwave, we sometimes got stuck with clients that seemed to have been put on earth to make our live miserable. We had signed long-term contracts that we couldn’t easily get out of. My team despised these types of clients. They were rude, unreasonable and drove the relationship based on service level agreements (SLAs) and penalties instead of trust and mutual respect. It seemed that they existed to go to work every day and find faults in our service. I used to indirectly terminate these clients by doubling their contract renewal price. The relief from my team when we lost these clients was priceless.

Other times when I practiced this method of terminating contracts, it was against unprofitable clients who were costing us more to deliver than what we had originally signed up for. This was generally because they were going through a massive IT transformation or growth and they didn’t want to pay more for the extra work from us.  And that’s an important point: this wasn’t about ending the relationship just because of money, this was about ending the relationship because it was a bad relationship.

Most of us spend more time at work than with our families, so shouldn’t it be our priority to make sure that the time we spend at work is at least pleasant?

I found one way to achieve this was to make sure we chose the clients and partners with whom we wanted to do business. Just like clients assess us through exhaustive tender processes, we too have the right to assess them and decide if they are right for us.

In my case, for example, when clients call and request a pitch, a quote, or that we respond to their tender, I generally say, “Would it make sense to first figure out what two or three problems you’re trying to solve so I know what to send you?” or I would say “Well the interesting thing is that in our company we have a similar process to you. We have a ‘Phase One’ where we first collect information to really see if we are a good fit or not. Would you be open to having a conversation about that?”

If you put something like this in place, you’ll soon notice a difference.  Not too many companies are that selective about the clients they choose, and being so will put you apart.  You find people will wonder what is it these guys have that gives them this confidence.  The right client or customer will appreciate your discernment and the care you are putting into the relationship right up front.  In my case I found it to be key to both my happiness and to that of my team.

About the author

To succeed, you’ll have to reject customers that aren’t the right fit for your businessCarlo Minassian is the founder of Gartner-leading managed security service provider (MSSP), earthwave, which was acquired by Dimension Data in 2013 for a reported tens of millions of dollars and then globalized. He recently returned with cybersecurity platform LMNTRIXMinassian’s earthwave gained visibility for defending high-value government and private-sector targets, including 90% of NSW’s water supply, because of its commitment to a high-intensity, highly technical approach to network defense.  His model was later studied and adopted in Asia, the United States and Europe.  

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Carlo Minassian

Carlo Minassian

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