April 20, 2015
This is the third in a series of five blog posts about how to grow your agency. Jeff Allen and I are hosting Agency Growth workshops in Portland and London. Learn all about how we’ve grown Hanapin from a $2000 investment to an Inc 5000 company and an Indiana Best Places to Work honoree. For more info, read the About page and our FAQ.
Make sure to check out the previous posts in the series.
Hat tip to Aaron Levy for the idea for this blog post.
The concept of when to draw the line with a prospect and tell them no is a tough one. If you made the decision that you really want to grow, it’s always a tough decision finding the right balance between when and how to tell a prospect no to a request and getting them to sign on board as a client. Essentially, do you tell them no and risk losing them or not? This post will go into my thought process about how to figure out the right balance for you.
In the inaugural post of this series, I talked about when to hire the first employee and how the decision on whether to hire them actually comes months before the actual need. This is because you need to figure out whether you want to have a lifestyle business or a growth business. If you’re in a lifestyle business, the decision to tell a prospect no is relatively easy. Since you’re more concerned about whether you’re currently paying the bills versus whether you can grow your company, there are fewer options to consider. Of course, if you’re a lifestyle business but not able to currently pay the bills you’re still in the same position as if you’re in a growth company. If you’re in a growth company, the decision you have to make is this: is the revenue that you’ll generate and the headache you’ll likely get worth the time and effort of servicing this prospect?
At Hanapin, we don’t specialize in a particular vertical or industry. Because we specialize in PPC, that’s a small enough niche that we don’t feel we need to segment further. But, if you do specialize in a particular type of vertical or industry, you need to be very clear about the types of prospects you’re willing to consider that are outside of your target market. While your marketing and your expertise may lie inside that target market, there will be some prospects that approach you who make sense to service regardless. It’s a much easier decision to make if you’ve created guidelines beforehand versus trying to make the decision on a case-by-case basis. Your emotions will likely get the best of you because you’re too (literally) close to potential revenue.
For us, we tell prospective prospects no for a handful of reasons. We determine these reasons based upon:
- Types of prospects that historically don’t pay bills
- Signs they may not pay bills
- Difficulty of customer satisfaction
- Account issues that are more-Google focused (i.e. policy issues) that we may not be able to solve
- Whether we can get to the decision-maker
For us, attorneys haven’t made the best prospects. They are trained to parse words and to find errors, and generally because of those traits, they are difficult to please. There will always be something “wrong” with an account. It won’t ever be perfectly optimized. Our folks will always make mistakes. They’re human, and that’s what humans do. While our sample size is small, most of our engagements with attorneys are short and they leave dissatisfied. We’ve done a lot of analysis to figure out things we can do differently for these types of prospects, but ultimately there are enough other prospects out there that we don’t need to figure out how to make attorneys work, even though they work perfectly well as clients for some companies.
For other prospects, some red flags that we see before taking them on are that their spend is different than what they actually tell us on the phone. This indicates a lack of awareness about what’s happening in their account, and in some instances could indicate they’re trying to paint an overly rosy picture to get you to take them on as a prospect because nobody else will. The former is more likely and not a good client to take on (see my comment below about “bolt-on” services, as these types of prospects likely think that), while the latter has only happened a couple of times to us.
Generally speaking, we always try to make engagements work. It’s part of our “yes, if” approach. What that means is we very rarely say no. We reframe our response as “yes, we can do that if, you or we do this.” This approach works well for satisfying prospects and also for making sure our team stays in the right mindset and doesn’t believe there are too many obstacles to success (which happens when you say no too often – “yes, if” provides a path to success).
Where this doesn’t work is Google policy violations. If you’re violating a policy of Google’s, they’re simply not going to allow it. We’ve had prospects that read the Google guidelines very closely and interpret them like the law and then adjust their product or website according to those. Depending upon the rep you get at Google, even if it’s a dedicated rep, they can interpret the policy one way or the other. Sometimes you’ll get different interpretations from the same rep on different days. In most cases, they’re going to err on the side of caution and not allow you to get around the guidelines, even if you’re close. This happens quite a bit with supplements, which seems to be a shrinking source of revenue for Google because their guidelines keep getting tighter and tighter.
Other situations where you may want to say no to a prospect are if their goals or timelines are too unreasonable. This is a particularly tough one to manage because you want to do a good job for the prospect, and with a few tweaks, the goals and timelines probably aren’t that unreasonable. You think you probably can convince the prospect otherwise after they sign. And to top all this all off, they’re probably talking to other agencies who are telling them “yes, of course we can hit those goals and timelines.” So whether they actually can or not is indifferent, you may lose the business otherwise.
In situations like this, you 100%, absolutely, positively have to practice an abundance mentality. You have to be firm in your belief that if you’re telling a prospect no, that it truly is the right answer. And you have really good, defensible decisions to back up that opinion. Because saying something is unreasonable is just your opinion. Without facts, you’re just getting into a he said, she said argument. Know that there are plenty of other prospects that will come along who won’t have unreasonable goals or timelines.
If you don’t operate from an abundance mentality, you’re likely going to think you have to do everything you can to bring on this prospect. And that you’ll just work hard after they sign to hit those goals. In some cases, this is actually true! You can stretch yourself further and be more successful than what you initially thought you would be. And in those cases you’ve actually helped the agency grow to take on tougher accounts (who eventually become easy to you, because that’s the new normal).
If you go into the engagement with eyes wide, that this account will truly help your agency get to another level, then I think you should bring on the prospect. But if they’re not going to help your agency go to another level, you’re likely just bringing on a ton of headaches, for very little revenue, and what will likely end up being for a very short period of time. Ultimately it’s a question of “do I want to say no to revenue now or do I want to take a chance that they may or may not say no later?”
Another area where it doesn’t make sense to bring on a prospect is if they think your services are “bolt on.” What I mean by this concept is they believe PPC is a service where you can push a button or pull a lever and you generate results. With this notion is the thought from the prospects’ end that they don’t really need to do any work with you to make that happen. You can get a sense from the client if they don’t know basic answers like how much money they’re spending. Other signs may be if they’ve gone through 3-4 agencies already. These engagements are nearly always a disaster and nearly always a disaster from day one. The very best engagements for us are ones where there is a dedicated marketing coordinator whose job is to work with all of their marketing vendors and to run “interference” for them. To tackle projects that may have hit a snag for us that can only be figured out internally. These are things that could not normally be done via email or over the phone, otherwise they would’ve been completed already.
One area where we simply don’t have any tolerance for is when clients scream or yell (if prospects do that, they’re done instantly). Everyone loses their cool once in a while, that’s not what I’m talking about here. Humans will be humans and you need to give those folks a second chance. It’s the folks who always assume the worst, who make life harder for you regardless of what you tell them, or who yell for no reason (truly yell not just raise their voice). If a client makes an account manager cry, regardless of whether they were yelled at or not, it’s a similar situation. In each of these cases, we talk with the client and explain that their behavior is not acceptable, and simply asked them to change. We also let them know the consequences if they don’t, that we will fire them.
In most cases, the prospect straightens up quickly, because nobody really wants to be perceived that way. People do get emotional, and as I mentioned before humans are humans. You don’t want to lose revenue over a small indiscretion. But if they don’t straighten up, and they have another “infraction,” then we simply relieve them of their contract. We’ve done this in less than a handful of cases in our 11 years, as we screen well before they become clients. Note that in most cases when you fire a client, the prospect will not want to pay for services even though you’ve done nothing to breach the agreement. So either be prepared to lose that revenue you’ve billed or be prepared to take them to collections and potentially get an attorney involved.