Whether your business is online or âreal worldâ you need customers. Â Bless them.
However, not all customers are made equal. Â Some will place greater demands on your time and financial resources than others. Â In other words, some take more value from you than they give in return. Â This isn’t an Internet problem this is an âI have customersâ problem.
How you manage the good and the bad will have a huge impact on your business. Â However, I have noticed that few businesses (especially in the small-medium sector) are able to differentiate âgoodâ from âbadâ. Â If anything I have seen more effort being put into maintaining bad customers than retaining good customers. Â This, of course, is perfectly normal because most of us will put more effort into resolving unpleasant situations simply to take the pain away. Â Unfortunately, this often unbalances our effort:reward ratio â with us throwing all our energies into relationships that will never be productive. Â In other words we end up spending too much time trying to satisfy those who least deserve it whilst side-lining the really good customers.
Not that business life is always like that but when a customer âgoes badâ it can become an exhausting and unhappy time for everyone. Â The trick is to put in place a system which reverses the whole process â helping you minimise the effort you put into the troublesome customers whilst simultaneously increasing the number of, and rewards from, your best customers.
How We Let the Bad InâŚ
Frankly some customers are the spawn of Beelzebub himself. Â They are the ones you can never please, who never pay on time, complain about your product/service and moan about the price.
Why would you ever want these people on your books?
It could be any or all of these reasons:
You donât know that they will behave like that until itâs too late (i.e. until theyâve become a customer).
You feel compelled to supply them because a customer is money in the bank.
Youâve already invested substantially in acquiring their business.
It (quite literally) pays to identify what mindset it was that led you to taking them on in the first place:
If you didnât know they were going to be a nightmare upfront then you need to learn how to spot the danger signs.
If you felt that you needed the money then your marketing needs more attention.
If youâd already invested in them then look at the previous two points.
The cost of these customers is time, money and eventually your sanity. Â But the spin off cost is that they take your focus away from acquiring and maintaining the good customers who deserve your time and energy far more.
I recently heard one company that was forced into servicing contract at a loss because if they didn’t fulfil it they would never be able to work with the customer again and would lose the rights to bid for more lucrative projects in the future. Â What was worse is that they had built their business around supplying this one customer which, as a result, limited control over their own business. Hardly a sensible business strategy, Iâm sure you would agree.
Now take a quick look at your customer list â who would you like to âfireâ if you could? Â I bet it would make for interesting reading so pass it on to your colleagues and get their input too.
Next week Iâll show you some neat techniques for painlessly removing yourself from the bad leaving you with more great customers!