When to walk away

The show calls this something a lot of sales leaders never cover: when to say no to a deal, and how to get rid of a customer who is costing you more than they pay.

The first signal arrives early, in discovery, and it is scope. The scope of the engagement starts to creep because of the prospect: extra demands, extra features, revisions, something custom, and no willingness to pay for any of it. This is before the deal is even closed, which is what makes it diagnostic. Behaviour during discovery is the cheapest preview of behaviour during delivery you will ever get.

The reason this is hard is structural rather than personal. Salespeople are wired to close the deal: that is why you are in sales. So the incentive to ignore the signal sits inside the job itself.

What the signal costs is paid by people who are not in the room. The delivery team absorbs the scope creep.

Finance absorbs the lower margins, or the negative ones. A deal can be a win on your number and a loss for the company, and in an industry this small, it can also be the account everybody remembers you for.

Behaviour in discovery is the cheapest preview of behaviour in delivery you will get.

Source: When to Say No to a Deal and Toxic Customers, episode 102 of the Oil & Gas Sales & Marketing Podcast.

The same episode puts a number on what walking away actually buys back. The claim: get rid of just the bottom 5 or 10 percent of your toxic clients and it frees up enough time to close your next 25 to 50 percent of good ones. The trade is not revenue for nothing, it is bad revenue for the capacity to go get better revenue.

Source: When to Say No to a Deal and Toxic Customers, episode 102 of the Oil & Gas Sales & Marketing Podcast.