New business development is a core function of any successful organization. Because so much emphasis is placed on acquiring new customers, often the process of knowing when to keep and when to let go of certain customers is overlooked.
Focusing on ways to increase customer retention rates is a key to real growth, but you also need to decide whether certain customers are the right fit for your business.
By all means, keep looking for ways to increase the size of the pool of qualified sales prospects to sell to, and keep looking for ways to retain your customers; but, if you have customers who take more time than they're worth, or they're otherwise unsatisfying, you need to know when to reassess the business relationship.
Before deciding to let go of a business relationship, however, ask the following four questions to help you determine whether the customer is worth keeping.
1. Can you afford to lose them?
The 80-20 rule applies to sales performance, but it often applies to customer relationships as well: that is, 20% of your customers cause 80% of your stress. And that is perfectly fine—a perfectly normal part of doing business, because not every project is going to go smoothly.
The issue becomes whether or not the client is holding you back. Try to avoid getting bogged down with lots of additional customer requests and additional customer relationship management for a customer who's not one of your most profitable or strategic customers.
Your time might be better spent deepening a relationship with one of your best customers, rather than running yourself ragged trying to keep that challenging customer happy.
Take the first step (it's free).
You may also like:
- CX Will Be Essential for Rebuilding After COVID-19: Four Steps You Need to Take Now
- Planning Your COVID-Related Communications: A Flowchart [Infographic]
- Three Tips to Turn Initial Conversations Into Marketing and Sales Relationships
- Five Things to Do Now With Your Customer Advisory Board During the Pandemic
- Five Tips for Strategic and Compassionate Upselling in Times of Uncertainty