Master the art of saying no to customers without losing them

Updated on 3 February 2016

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In an effort to satisfy every customer that walks through their doors as well as not to lose out on any opportunities, many business owners are hesitant to ever say no to a customer – even if their request falls outside their product or service offerings.

This can, however, be detrimental to a business, especially if it means the business risks losing valuable time or resources to fulfill a request that doesn’t make financial sense or would otherwise compromise the level of service they would be able to offer to their existing loyal customers.

Aki Kalliatakis, a customer service expert from the Leadership LaunchPad, says as much as the goal is to please all customers the reality is that it is not always possible.

Turning down a customer’s request is never easy, Kalliatakis says, however, being honest and upfront will help gain the customer’s loyalty in the longer term.

Drawing the line

It’s not difficult to see why business owners may find it difficult to draw the line, especially since customers should be the focus of every business, more so in today’s competitive world, says Kalliatakis.

“Customer-driven companies are far more successful than those that neglect their customers. In fact, I’d go so far as to say that the return on investment of customer management is that your business will still be around in five years to talk about it,” he says.

However, a balance needs to be struck between being a customer-driven business and not losing the focus of your business, says Kalliatakis.

Business owners should not allow themselves to be distracted from doing what they do best by customers, says Kalliatakis. This is a game that you will not win, he adds, not even by big retailers.

“Many higher-end retailers have now responded to customers’ demand for lower prices by getting into a price war. I’m not sure if this is a great strategy because nobody ever wins a price war – it’s all about who survives the longest,” Kalliatakis says.

The art of saying no

Diplomacy is key to you keeping a customer even if you have to say no to their request, says Kalliatakis. Here are his 3 ways to achieve this.

1. Be honest and clear with the customer from the start

Business owners have to be upfront about what their offerings are and their terms and conditions, says Kalliatakis. 

“If the request is something that you don’t really know how to do, you need to be very clear that this is not your area of expertise and that the result, if you met their request would be to give them a half-baked product or service,” he says.

2. Offer an alternative solution

Diplomacy and empathy are key to saying no. Kalliatakis advises business owners to train their teams to look for and to offer innovative alternatives that may meet the customer’s immediate needs.

“My regular banks all refused to lend me some money to buy my neighbour’s house since in their view I was a risk. However, the (smaller) bank that got my lifelong loyalty said that they would introduce me to some investors who would be willing to risk a bit, and they also helped by sharing confidential information about the true value of my neighbour’s property. Problem solved,” says Kalliatakis.

3. Offer referrals 

For requests that the business cannot meet, Kalliatakis says, business owners can direct the customer to another establishment who may be able to help.

“This could include introducing them to one of your competitors or an alternative that can help them,” he says.

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