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You’re not a public utility

by | Dec 15, 2019 | Improving Competitiveness, Profit Improvement, Sales & Marketing

This may sound heretical, but it’s well worth examining whether you really want to do business with certain customers. (Really, it is!)

Is there really a bad customer?

Most companies believe that if a customer pays their bills, then it’s okay to do business with them. It certainly is okay, but it might pay for you to take a closer look at whether you want to do business with them — whether you can afford to do business with them.

Because even though a customer wants to do business with you, it doesn’t mean you have to do business with them. You’re not a public utility.

It’s a question of fit.

Who would want to turn away a paying customer? Well, some customers might not fit you very well. And quite often, those customers might have a negative impact that could far outweigh the value of the sales dollars they represent.

Customers who don’t fit

The cost of customers who don’t fit your company is far greater than you’ve imagined. It’s worth taking a closer look.

Of course you want customers who have a lot of business. But does their business fit you? Is it what you do well? Are they willing to pay a fair price?

There’s lots more for you to consider: Does their way of doing business fit with yours, or is it disruptive? Do their projects or orders fit with your normal ways of doing business?

It’s not a simple yes or no decision, and there’s no scoring index for this. Some elements are much larger than others, but they all make a difference: How do they make buying decisions? How they order? What are their transaction sizes?

It may not be simple, but you’ll know it when you see it. So take a closer look. You may be surprised at what you learn.

Some examples

A marketing services company found itself doing once-a-year fundraising campaigns for some small not-for-profit organizations. The prices of the projects were okay, but the projects were small — less than a third of their average project size — and there was no additional business to be had.

Their salespeople were diverting lots of time and energy to the small projects. Though the company wanted to be helpful, they declined the projects for all but a few organizations they had a special interest in.

The decision freed up some resources late in the year, when they were busy with work that fit them better — from clients that were far more important.

In another case, a company found itself handling a large number of small orders from a customer who wouldn’t use their automated ordering system. Every order — no matter how small — required phone calls and follow-ups from a customer service person.

They had a useful conversation with the customer, helped them to understand the usefulness of the automated system in making it faster, easier and less costly to do their work.

When the customer understood, they began to comply — and made things faster and easier for everyone — becoming a much more desirable client in the process.

Easier for them. Easier for you. What a concept!

You’re not a public utility

Why not examine your customer list and evaluate whether there are any customers you just shouldn’t be doing business with — unless there’s a change.

Maybe you can increase their desirability by changing the ways in which you do things, or change some crucial element of the way in which they do things.

But barring such changes, remember: you’re not a public utility. You get to pick your customers. And you should — for better or for worse.

The cost of customers who don’t fit your company is far greater than you’ve imagined. It’s worth taking a closer look. (And if nothing else, the process will help you clarify your sense of what a good customer looks like.)


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