Solution Sales in B2B: When to Say No To Your Startup’s Client

In the high-stakes world of B2B solution sales, it’s tempting for startups to onboard as many clients as possible to fuel growth.

However, it’s crucial to balance immediate revenue and long-term strategic goals. Alina Golava, Product Expertise and Partnerships Manager at Mercaux, a leading B2B SaaS startup named among 50 Global Tech start-ups powering the New Retail world, shares her insights on discerning when to say no to potential clients, ensuring alignment with the company’s vision and capabilities.

What Are The Crucial Steps In Understanding A Client’s Requirements To Ensure Proper Alignment With Your Startup’s Capabilities?

Since we are talking about B2B sales, we should start with why understanding the requirements is a critical step. Startups are normally relatively short on resources, so potential customers must be qualified to ensure you are not wasting time and money.

And the sooner you do so, the better. The longer the customer stays in your sales pipeline the better job you’re hopefully doing on requirements exploration. However, understanding a client’s requirements is a deceptively straightforward process for several reasons:

• You cannot fully rely on what has been shared initially
• Client requirements are dynamic and can change over time due to market conditions, internal shifts, or unforeseen challenges
• You are constantly balancing between the need to close a deal as soon as possible, and giving the team enough time for exploration

The reality is, that even when we are in the same room, engaging with the same content, any one of us may walk away with different conclusions, remembering and emphasising different points.

This is because we are human, and perception plays a crucial role. Now, consider a situation where you have multiple stakeholders from different functions, and your goal is to obtain a unified view of the requirements. Add to that the complexity of hidden political agendas and a reluctance to disclose certain issues to external parties.

Unspoken needs lie under explicit pain points.

Plus, clients may not always accurately convey their challenges.

This results in a complex situation and the larger the client, the more challenging it becomes. This is why enterprise sales can take years to finalise. While there’s no magic pill to address all these challenges at once, there are indeed strategies that can make things easier for a startup.

To understand the requirements, you need to understand the problem. This requires getting as close to your client’s business as possible — immersing yourself in their operations to form a clear picture of their context, including participants, environment, processes, key touchpoints, pain points, areas for added value, and their current approach.

Ask open-ended questions and try to explore multiple perspectives. Do not focus solely on key decision-makers; speak to future users to get their perspective and understand requirements on a deeper level. I find the methods and techniques structured within Design Thinking to be particularly effective.

Build relationships and trust with as many stakeholders as you can to gain more insights into the hidden points, unspoken needs, and success criteria. Shared markers can reveal what the client aims to achieve and help you determine whether your solution aligns with their goals. Ideally, find internal advocates who can help you navigate the environment and requirements.

Whenever possible, leverage insights from partners. Sometimes, a brief, informal conversation can reveal critical information that might otherwise surface too late, such as the client’s preference for crediting services and end-of-year payments. In this case, you can assess if your startup’s funding suffices for this type of arrangement.

Or you might learn that this customer requires extra support efforts that you cannot afford due to the size of your business.

Ironically, even when you’re doing your best to thoroughly understand the requirements and ask in-depth questions, you may find yourself in a situation where customers change their minds and no longer need your services. As bittersweet as this outcome may be, it’s a sign that you’ve done your job well.

How Should A Startup Prioritise Potential Clients When Resources Are Limited?

This question is key as it aligns with the process of determining when to disqualify or deprioritise certain clients. Ideally, you need to identify who would be the most beneficial for a startup at its current development stage by assessing several factors:

Impact on the product: Consider how many features can be implemented, how closely the requirements align with your near-term roadmap, whether the client is open to co-creation and frequent interactions, and if the solutions you develop can be reused for other clients.

Impact on business scaling: You need to know how big is the potential to amplify your solution’s reach and influence in the market (e.g. lighthouse clients).

Load on resources and support: Assess how demanding the client is, including the actual revenue versus the resource investment required.

Risks: There might be challenges, such as unfavourable payment terms, unsustainable project management practices, and limited resources or attention from stakeholders.

It can be extremely tempting to hunt for a noble logo or high-volume customer, but it is important to be strategic. A high turnover does not necessarily translate to high revenue — some clients may be extremely demanding on support, straining your resources. A prestigious brand does not mean the client will be open to you to promote the project, reference them, share outcomes, or act as a point of reference for future business.

How Could A Startup Balance An Immediate Need For Contracts And Not Get Distracted In Terms Of Long-Term Product Development Goals?

Start by defining the fundamental components that will differentiate your product in the long run, those are non-negotiable. If a client’s requirements significantly deviate from these fundamentals, it is better to deprioritise that client.

Ideally, you want to look for clients who are aligned with your conceptual vision of the product or service and want to be early adopters. They tend to have the time and the patience to let you develop your service. Plus, they are frequently open for co-creation.

So, negotiate contracts strategically:

Break down deliverables into batches or modules if possible to distribute the workload more evenly across your team.

Clearly state the prerequisites for each deliverable, specifying what the client must provide to enable you to meet your commitments. Also, include a clause that allows you to postpone delivery if the client fails to meet the agreed-upon schedule.

What Are The Indicators That A Client Might Not Be The Right Fit For Your Solution, And When Should You Say No?

There are plenty of valid reasons to “fire” a client.

This includes clients who divert resources away from your core competencies or whose technological infrastructure makes it extremely difficult, if not impossible, to deliver your solution.

If a client consistently has unrealistic expectations or their needs are misaligned with your capabilities, it is a clear sign of a poor fit. Additionally, clients with questionable work ethics that conflict with your business values should be let go.

It would also make sense to part ways with clients who drain resources, especially if they generate low revenue, which becomes evident when you calculate the hours spent on support, management, and nurturing.

Finally, sometimes persistence and a bit of luck may land you a client who is not willing to invest any effort into nurturing the project. In these cases, you might find yourself doing their work just to keep the project afloat.

Months or even years later, you may still be handling responsibilities that should fall to the client, with the project stagnating due to a lack of support or interest from their side. Eventually, this type of client may drop you themselves, as the project becomes orphaned; no key stakeholders, no defence of your role as a vendor and value not being recognised.

Some businesses can get into scary arrangements when a significant portion of their revenue comes from a single customer who, in turn, seeks to dictate terms without considering other perspectives.

Such relationships can become draining due to the power imbalance and lack of true partnership. I’ve shared only what I’ve personally observed throughout my career: turning down a contract with a large, tempting company because their requirements diverged too much from our product vision, rejecting a client who, even after numerous discovery sessions, still couldn’t articulate their requirements and passing on otherwise great accounts due to an incompatible technical stack.

However, there are certainly more reasons not to pursue certain customers.

What Are The Most Common Pitfalls In Solution Sales?

• First and foremost, it is the lack of understanding of the customer processes, pain points, needs, and decision-making processes. This can lead to mismatched solutions and unmet expectations
• Missing important stakeholders or resources required for implementing the solution
• Off-chart expectations regarding time to value and costs can lead to dissatisfaction and project issues, impacting overall success.
• Focusing solely on closing deals while neglecting relationship-building can lead to short-term wins but long-term losses. Building genuine relationships is key to sustainable growth

Can You Share A Real Case Where Saying No To A Client Proved Beneficial In The Long Run?

There have been numerous cases like this. Of course, while I cannot share specific names, I can describe one instance from when our startup was new and every client had the potential to shape our trajectory.

We began the discovery process with one of the largest sports retailers in the market, a major company with an extensive IT team and numerous in-house developments and pilots.

In theory, there could have been a great fit with our solution. However, there were several issues: the company was too large, with a complex political process that made signing a deal challenging, and it required an excessive amount of resources just for basic alignment.

Ultimately, our conversation with the CIO revealed a set of requirements that were fundamentally misaligned with our product approach. For example, they requested an on-premise version of our solution, while we are a pure SaaS provider and insisted on maintaining current support pricing.

Plus, they wanted us to deliver a version for a different operating system and develop a new web interface in the short term, even though such an interface was not part of our mid-term roadmap.

As a cherry on top, it became clear that they did not perceive value in engaging a SaaS vendor for something they believed they could quickly develop in-house. As a result, not only did the backend and interface requirements clash with our offering, but the perceived value was also lacking, which made us conclude that moving forward with this client would not be possible.