When you start the business, you're thrilled to add a customer. Any customer.
It's amazing. The fulfillment of your dreams of building a real business.
Then as time goes by, you learn that not all customers are built the same.
Small Business Owners of the world – vow to work with customers who love and appreciate the value you bring and watch you profits go up!
That's the message of Ivana Taylor's post titled Increase Your Profits by Getting Rid of Difficult Customers
It seems counter-intuitive. How can getting rid of customers increase profits?
1, Difficult customers want what your business system isn’t designed to deliver. For example; I worked for a manufacturer who called some of the biggest medical device, appliance and automotive companies their customers. But these companies had specialized systems that required literally hundreds of man-hours of maintenance on our part so that we can fulfill THEIR quality systems’ requirements – in addition to our own. So we had two kinds of customers; high-maintenance (the big guys) and low-maintenance (the little guys). We literally made twice the margin on our smaller customers than we did on the big ones. They loved us, we loved them and doing what they hired us to do was fast and easy; hence profitable.
2. Difficult customers have no idea why they should work with you instead of a competitor. Do you have customers that charge their customers a lot, but expect you to do more work for less or customers that are constantly complaining about your prices? This should tell you that your customer understands why customers choose them – but they know that you don’t understand what value you provide – and so they take advantage. Chances are that your best customers KNOW why they choose to work with you, but you don’t. If you like these people and want to keep working with them, be clear about what sets you apart and the value you offer and charge accordingly. If they are disrespectful and mean, get rid of them. It’s bad enough that you’re losing money; you shouldn’t have to be abused in the process.