Rule #5: Strategic Rejection Creates Attraction
There is one word that business leaders are always frightened to say to a potential customer:
The word no can become the most strategic word in your lexicon. The more people you reject, the more attractive you become to the discrete market you have identified.
As right as it feels sometimes, when you continue on the mission to add more business at any cost, regardless of how these new prospects match your target profile, you risk devaluing your market position and reducing your competitive worth.
I have seen many occasions where management, in pursuit of meeting ever-increasing costs, will do whatever it takes to land a new customer, any new customer. Fast forward into the future; if this behavior continues, that company will end up with a large number of new customers and a support nightmare. Too many different versions of a product mean support, development, and customer services are impossible to maintain. As precious resources are sucked away, the next release of a product or service is constantly delayed. Furthermore, the company may develop a number of features that the market does not want, and the company ceases to be exclusively important to anyone. A “jack-of-all-trades” is important to no one.
Finally, the profitability for each customer goes down significantly as new features are added only to close deals. In the end, businesses die from one of two reasons: (1) having too few customers or (2) having too many of the wrong kind. The more experienced and disciplined strategy is to identify the gap in the marketplace and then develop a solution that fits this need so perfectly that a customer would feel ridiculous to consider any other inferior solution.
Check out the video below for more details.