It’s no secret that the primary goal of an agency is to contract new business and convert leads into clients.

However, is there ever an instance in which it is more beneficial to turn down a potential client?

It is okay, and sometimes necessary to the welfare of the business, for agencies to be selective with whom they decide to work.

Sometimes, an agency may feel pressured to accept new work as a result of a current position or necessity. But the reality is that every partnership may not be a good fit. A wrong partnership can actually create more difficulties in maintaining productive and profitable client relationships.

While confrontation or saying “no” can be challenging, it is possible to decline these unsuitable partnerships. Let’s take a closer look at when it may be appropriate and strategic to say no to a potential new client.

1. The Client Lacks Long-Term Needs

It is important to obtain new leads, but leads are not truly valuable if they’re not converted and then retained over time.

The ideal client is one who requires consistent, recurring work. If a potential client starts out with a short-term business need, there will be no room for the partnership to grow, and thus will not generate more future business. This can trap your agency into a constant cycle of seeking new leads, and converting them again, creating more work and requiring more investment.

Remember: retention is more profitable than acquisition.

2. The Client Lacks Sufficient Funding

While all new business may seem attractive at first, some potential clients may be looking for an affordable service that doesn’t meet your agency’s financial expectations or requirements.

Clients who aren’t able to meet the quoted price may also present issues further down the line, such as not being able to pay for services rendered or delayed payments. Perhaps they are new businesses with limited resources, or don’t have the leeway in their budget. In this case, “any business is better than no business” may not apply.

To be profitable and build a positive client relationship, the partnership needs to be sustainable and valuable for both parties.

3. Your Agency Lacks the Necessary Time Commitment

When business is booming, there may be various new clients who are interested in partnering with your agency. A great position to be in, right? Nevertheless, if this puts your agency in a position of being over-extended, it may be better to turn down offers, at least for the time being.

Not being able to offer a client the time and level of service that is normally provided can come back to haunt your agency in the form of negative referrals due to unfulfilled promises or incomplete work.

It is better in these instances to say, “Yes, but not at this time.” While it is still an immediate “no,” it could still convert to a “yes” in the future, at a time when your agency can truly offer full and high-quality services without becoming stressed and over-extended.

Another possibility for this occasion would be to confirm and solidify a future start date. This way, the client is already committed to the partnership, and your agency can tie up any loose ends before starting a new project.

Best Practices for Turning Away a Potential Client

So, is your agency ready to say no, but wondering how best to do so? Here are three tips to say “no” eloquently, without feeling guilty, offensive, or remorseful.

  • Maintain a tone of respect and focus on the facts. Don’t let your emotions or opinions take over. Instead, say “thank you,” and respect the client needs while supporting those of your agency. Keep your responses short and sweet, and offer explanations if the client asks for them.
  • Be decisive and follow your instincts. If the prospect simply doesn’t feel like a good fit, can’t afford the quoted price, or doesn’t align with the values and skills of your agency, then it is a good idea to decline respectfully.
  • Offer alternatives. If your agency has other partners that might be a better fit for this particular client, and you feel comfortable doing so, it is good to offer the client that viable alternative. This option will make them feel that their needs are being considered and reflects positively on your agency.

Remember, choosing retainable clients that promote profitable relationships is key. It’s okay to be selective and decisive when it comes to accepting or declining potential clients because the welfare of your business should always be top priority.