10 September 2007

Some customers just aren’t worth having

Some people are just too hard to have as customers and I think that there are times when the old saying, the customer is always right, is really wrong. One of the biggest reasons that I have for being in my own business is so that I can decide whom I do business with and whom I don’t.

When meeting clients for the first time I look at it as an interview – for them and for me. I listen to my gut instinct to get a feel for the client. Are we on the same wavelength, are they clear on what they want, do I think we can work together? If I can’t say yes to the above, then I prefer to be upfront and honest rather than trying to make it work. So I suggest that they go elsewhere.

Over the years that I have been consulting I have really learned to be a good judge of character. I am pretty good at identifying whom I can work with and whom I can’t. It saves me a lot of time, energy and heartache to work this out in the beginning, rather than try and make the relationship work, only to have it end in tears somewhere down the line, as it inevitably seems when I go against my gut instinct.

Likewise there are times when a relationship with a client changes and no longer works. If they keep haggling over price, or become unreasonably demanding or don’t communicate effectively, it is time to move on. I have done “sacked” clients on a number of occasions. It was very satisfying and it really gave me a sense of self-respect.

My marketing company used to have the advertising account for a large shopping centre. It was the account that everyone in town wanted. It was lots of work and the right amount of prestige to make me feel good about it. But the client was extremely demanding, needing everything in very short and generally unrealistic time frames. They constantly bartered with us to get the work done cheaper and often they were very slow to pay.

So I did a review of the account and came up with some interesting realisations:

1. We didn’t actually make any profit out of the account.
2. It stressed everyone out in the office.
3. We couldn’t take on more profitable work because all of our resources were tied up with this one account.
4. We had no long-term security, as the client would not sign a contract.

Having done that review, I made the decision to resign the account. It was one of the smartest business moves I have ever made. I replaced this account with four new clients, generating four times the revenue for the same energy input. Don’t get me wrong – to resign this account I was saying goodbye to over seventy percent of the businesses monthly income. But it was profitless volume, that had little or no satisfaction and ultimately I would lose my best staff out of frustration with managing the account.

My point here is clear. Some customers aren’t worth having. If they cost you more in energy, time and satisfaction than they bring in, say goodbye in the nicest possible way.

One thought on “Some customers just aren’t worth having”

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