Saying "no" to your customer is your right and responsibility. But, every time you say no, there is a hidden cost and that hidden cost is either diminished loyalty or outright abandonment, warns Bob Negen.

Saying "no" to your customer is your right and responsibility. It is not mine. It is yours. It's your responsibility as a business owner to make those hard decisions. It's also your right to disagree with me. Having said that, let's talk about the hidden cost of saying "no" to a customer.

When you say no to your customers, when you don't let them do what they want to do, you are driving them away. You may not realise it, which is why I call it the "Hidden Cost of No".

Here's an example: Steve Frazee, our chief strategist, has a policy. If a store doesn't take American Express, that's fine. He will pull out his Visa to pay, but he'll never go back to that business again because he prefers to pay with American Express. He doesn't say anything to the merchant; he just won't go back to that store. It ends up being a hidden cost to that merchant because they just lost a customer. The cost of saying no can be fairly high if you consider all the potential future sales that will be lost forever.

I get it. Accepting American Express costs more. But when you make it inconvenient for your customers to pay with what they prefer, you send them away from your store and lose business. Because when you say no, for any reason, the people who walk away are probably never coming back. If you think you are not losing sales when you say no, you are very wrong. The message you are sending is that you clearly don't care for their business enough, so people will go elsewhere.

Think of the long term value beyond each single transaction.

Customer loyalty is so important. Every time you say no, there is a hidden cost and that hidden cost is either diminished loyalty or outright abandonment. I suggest that you can't afford either.

On the other hand, there is the long view of yes.

Imagine that during a huge sale one of your customers comes in and asks for that sale price retroactively for a past purchase. It can cause some frustration right? You might not know what to do or say. You feel cornered. Your first reaction is to say no because we're a small business and only the big box can do that. We can't.

I would recommend that if your customer asks for the sale price on a past purchase you cheerfully say yes and issue a refund for the price difference. Your customers will respond positively!


That positive reaction from your customer creates increased loyalty, which means increased number of transactions per customer and a higher lifetime value. It also leads to better, more enthusiastic word of mouth, which leads to new customers. This, of course, leads to greater lifetime value of more customers.

You don't want to just satisfy customers. You want to make them happy! When you say no to a customer, you get diminished loyalty or abandonment, but when you say yes, you get increased loyalty and increased lifetime value. Remember, customer loyalty and customer enthusiasm is priceless!

I'm encouraging you to recognise that there's a hidden cost to "no" and there's a long-term benefit to "yes." So even though you may have to summon up that smile, and you may not like it, I'm going to suggest that the money that you make from saying yes compared to the money that you lose from saying no will be a positive return of multiples upon multiples upon multiples of dollars for your store.

Today's marketplace is highly competitive for independent retailers. If you want to compete I suggest you make the commitment to rarely, if ever, say "no". In the long run, you'll make more money by learning to say "yes".

About the author:

Bob Negen, co-founder of WhizBang! Training is a professional retail speaker, consultant, business coach, and author. Negen motivates and trains independent retailers to improve and grow their businesses with practical, actionable tactics and strategies. He speaks to local independent business owners in their own language using real world retail experience and humour.