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Getting rid of customers is a foreign concept to most people, particularly those seeking rapid growth.
Not getting rid of problem customers is likely costing you vast amounts of time, money and aggravation. You’ve likely heard that old business cliché “the customer is always right.” We’re here to tell you the customer isn’t always right. Rather, the right customer is always right.
Taking this cliché in its original form seriously will mean you live your business life as a doormat, spending your time trying to please or retain problem customers like vampires and churners. Unlike red wine, problem customers don’t get better with time.
First, a clarification. We’re not talking about customers who have a legitimate cause for complaint. Customers who have a genuine complaint are valuable intelligence assets. This sort of customer often will help to uncover weaknesses in your company.
Let’s define problem customers. For whatever reason, a percentage of the population is never happy. They’re always moaning about something, dissatisfied and feeling like everyone’s out to take advantage of them. You could shower them with gold and do more than demonstrate that you have the ability to solve their problems once and for all – and for free – and they’ll still find something to complain about. These people are sucking the life out of you. We suggest you cut them loose as quickly as possible.
We have, without exception, found that it’s the low-value, price-sensitive customers who complain the most, waste vast amounts of time and always need to be chased for payment.
The high-value customers who are the most profitable tend to pay on time, treat you with respect and value your services.
We suggest you get rid of the low-value, problem customers as part of your regular housekeeping activities.
When your mind is centred around sales growth, you may sometimes get skewed in your thinking that, as long as you keep the sales numbers high, there’s bound to be enough leftover to make it all worthwhile.
However, run an accurate profit and loss statement on these problem customers – one which takes into account all the time you spend chasing and appeasing them. You’d often find that you make very little if any, real profit on them. Most of them would likely result in a net loss when considering the low value they bring, coupled with the time and energy needed to deal with them.
Another important reason you should get rid of low-value customers is that, apart from sucking up your financial resources, they are also causing you to lose out on opportunities.
Firing problem customers will free up valuable time and resources that can be used to focus on (and build value) with existing advocates of what you do and acquire new ones.
Take time out periodically to review which customers are causing you the most pain, then give them the news they deserve. You’ll feel like a huge weight has been lifted off your shoulders and you’ll have renewed energy to focus on high-value advocates.
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