Increase Profitability By Firing Customers
When did you last analyze your customer base? Never? Small-business owners need to periodically weed out unprofitable clients so they can focus on those who contribute positively to the health of the business. You might think that this analysis sounds complex or time-consuming, but it isn’t. It shouldn’t take more than an hour or so for a business to identify which customers should be dropped. The key phase is this:
“Focus on those who contribute positively to the health of the business.”
In my experience working with hundreds of small businesses, the health of a business has as much (or more) to do with qualitative measures as it does quantitative. In other words, some customers are so unreasonably demanding that the amount of money that they spend with you does not offset the negative emotional impact of their abusive behavior.
What this means is that it’s easy to identify which customers should be weeded out. In fact, you already know who they are. You cringe when their messages pop into your inbox. They have driven someone on your staff to tears (or even to quit). They want something for nothing, and they want it now.
At least annually, you should take a hard look at your customer list and put a check next to each one that drives you or your staff crazy. Drop every checked customer that you can afford to. This will drastically increase morale and will leave you with the capacity and resources to better serve your good customers, and to acquire new customers that will treat you with respect.