IMG_6363Sometimes companies just need to say “no.” Organizations can’t honor every customer request not to mention that companies do not have  unlimited resources even making it possible to never have to say “no.” Sometimes we don’t know how people are going to react, but we don’t want to lose someone’s loyalty – much less their business.

Saying “no” is inevitable in all businesses, but to be rational and give a customer or client a clear explanation why you can not negotiate on a specific circumstance or business decision can make a profound difference. As an example, let us briefly discuss real estate commissions. A person wants to sell their home and calls a real estate agent in to list and market their house. The listing agreement commonly calls for a 6 or 7 percent commission to be paid when the property is sold. If for instance, a home sells for $300,000, a 7 percent commission is $21,000. Admittedly, that does seem like a lot of money, and once in a while a home seller will want to bargain the commission down either at the beginning or at the end of the sale. So how do real estate brokers handle these situations?

Real estate brokers, like everyone else in business need to use rational persuasion through logic. All the information has to be readily available and show a client just how the commission system in real estate really works. That $21,000 commission is listed in a multiple listing service as a percentage; 50 percent to both the listing broker and selling broker. Suppose you are the listing agent;  now your side of the real estate deal is entitled to $10,500. Well, that sounds like a lot of money too, but you as the agent must share your side with the broker who holds your license, pays the rent on the real estate office, pays for the phones, and copy machines. Many offices begin with an even split, so now you are down to $5,250. You, as the agent are responsible for placing ads, doing open houses, showing the home to buyers, spending time marketing the home, and most likely negotiating the sale of the home and working on it until closing. That’s a lot of work, and if the entire process takes months to finally get to the closing table, there are a lot of hours spent working. That’s not quite as much money as the home seller thought his agent might be getting by the time the transaction closes.

In essence, the real estate agent isn’t rejecting the idea that $21,000 isn’t a lot of money. It is, but the agent is just rejecting the idea that commissions are extravagant. When a customer or client has all the information on hand, it helps them to rationalize.

“No” isn’t such a terrible word when you’re not really saying “no” to the person. You’re still delivering what you promised; sometimes it just takes an understanding.

photo credit: Chad Jones