How to – Say No to the Proposal AND Not Reject the Vendor Just about every difficult conversation that people have in business is enhanced tremendously when they can separate issues from personalities and do it convincingly. Conversations that are unpleasant or sensitive are made easier and more effective if you can separate the two – and that holds especially true when you have to say no to a vendor.

You might think to yourself: “Hey, this is business. If feelings are hurt by rejection, that is not my problem; maybe that vendor shouldn’t be IN business,” and you are not wrong. Business is all about the deal that gets made as well as the deal that doesn’t get made. Anyone who takes business personally definitely has a problem. But hurt feelings could present a problem for you as well:

• You might want a proposal from that vendor again in the future. You want them to have positive feelings about you and your organization.

• A teaching opportunity exists in your rejection by communicating what the vendor needs to do in order to get your business. That message will only be received if the relationship between you and the vendor is maintained.

There is no law that says you have to explain why you are not accepting a proposal, but there is a benefit to doing exactly that. Not only is giving a concise reason for selecting one proposal over another the decent thing to do, it is critical if you want to preserve a positive relationship with a potential future supplier. It also helps to educate the vendor about how he or she might serve you better in the future, which could be beneficial to both of you.

Try to communicate your quantifiable, objective target compared to what is in the proposal. Avoid making judgmental statements about personalities, talent or capabilities.

Remember:

1. Say no to the proposal, not the vendor.
“Your proposal for the work was very impressive, Lucy, and it created a lot of discussion. But the approach outlined is too costly and we are going with a scaled-back version. I want to thank you for a great effort and I’d like to call on you in the future. I’m glad we had the chance to meet and got the opportunity to see what your firm can do.”

2. If possible, be optimistic but don’t mislead.
“We've reviewed your proposal but what you propose is not up to our specifications. We’re looking at other vendors, but there is still a month before the deadline. Perhaps you would be interested in reviewing the spec sheet and submitting a revised proposal by the deadline.”

3. If the vendor is way off course, do NOT respond. You could get caught with an unexpected follow up call. While you don’t anticipate wanting to do business with them now or in the future, in business, what goes around comes around. Be firm and decent: “Your proposal came in 50% over our budget limit. That’s a gap that I can’t see myself asking you to close. I went with a proposal that is much closer to our constraints.”  10:37 AM •