I didn't realize that one of the points in my latest book, Collapse of Distinction: Stand Out and Move Up While Your Competition Fails—the suggestion that you fire some of your customers—would raise so much controversy.
I'm hearing from some professionals who are acting as though I'm asking them to commit corporate suicide!
Here's what most are saying: "Are you kidding me? Do you begin to realize how tough it is to get a customer in this economy? Now, you are asking me to fire some of my customers? What planet are you on?"
Here are four of the many reasons why I passionately believe you need to review your customer list and tell some of them that you have to let them go.
- You don't have the time or resources to create Ultimate Customer Experiences for everybody. If you sharpen your focus by "thinning the herd," you can devote your attention to those who bring you the most business.
- Ever notice that bad customers complain more and take up more time than great ones? Why give your time and emotion to customers who make up a small part of your business? Center your efforts on those who are already fans . . . and help them grow to another level.
- Do you have customers who create bad impressions about you and your organization simply because you are doing business with them? Once I was booked by a speakers bureau to address a well-known and respected company. When the company found out the bureau had shady practices, it canceled the speech and then refused to work with me, assuming that "birds of a feather...."
- Are you doing business with someone who casts a negative light on your organization? Bad customers cause stress that you don't need and at levels that are difficult to manage. I had a customer who made my blood pressure spike as soon as I heard she was on the phone. We would jump through hoops to try to keep her happy, and she stressed all of us beyond description.
I fired her. I told her that we did more for her little bit of business than we did for our best four clients combined and that wasn't going to continue. We chose to devote our efforts to our best customers. Guess what? Our team's productivity was enhanced, our best customers got even better service and increased their business, and the bad customer came back and asked what she needed to change so we could continue to work together.
Of course, the main reason to fire a customer is the one I discuss at length in my book: The customer doesn't fit the clarity of you or your organization. In other words, the customer is outside the "sweet spot" of what you do.
So, which customers do you fire? Here are three suggestions to help you decide:
- Eliminate the bottom. Cut loose those who take time from your efforts but aren't delivering in terms of sales.
- Eliminate the unprofitable. Some "good customers" are unprofitable to serve if they take too much staff time, ask for unreasonable concessions, demand expensive expedited delivery, and more. Remember, the goal for your business isn't volume, it's profit.
- Eliminate the obsolete. If you have only limited resources, don't spend inordinate time and money on customers from declining industries.
Which customers do you keep and continue to support? Here are three suggestions:
- Support the advancing. Customers in growth industries may not be delivering high returns now, but you will enhance your business as they expand.
- Support the elite. Find a way to spend more time and resources with your most-profitable customers. In many cases, they could expand their current level of business with you if you give them a great reason, such as more attention!
- Support the "cool." Sometimes your gut tells you that you need to be attached to a customer because that customer has great potential. Don't ignore that feeling!
Many times, in an economic climate such as the current one, we expand our offerings, or accept projects that we shouldn't, in an attempt to add more customers and get more business.
The problem is that in the real world, that seldom works the way we want it to. We spend more time than we really have to give pleasing a customer we never should have solicited in the first place, we alienate our good customers because we don't pay enough attention to them, or we move away from what attracted them to us in the first place.
Don't misunderstand: I'm not saying that you indiscriminately get rid of people paying you for your goods and services. I'm saying that you can identify that 20% from the old 80/20 rule (Pareto's Principle) and get rid of some of those who meet the four points described in the beginning of this article.
Your goal should not be to "please" customers. Studies show only 6% of "satisfied" customers become loyal to your organization.
As I wrote in All Business Is Show Business: Strategies for Earning Standing Ovations From Your Customers, "The purpose of any business is to profitably create experiences so compelling to customers their loyalty becomes assured."
You don't have the time or money to create those kinds of compelling experiences to an array of wildly different customers.
Only "highly" or "extremely" satisfied customers become advocates for you. By reducing the number of current customers and focusing on creating compelling experiences for the ones who remain, you can create an army of evangelists bringing you more terrific clients like themselves.
Find those customers who fit your clarity—and fire some of those who do not! The result is addition by subtraction—it's the achievement of desired growth through intelligent pruning.
And, by the way, isn't kind of cool to think of all the trouble they'll now cause your competition?
Looking for more guidance in analyzing your customer base? Check out Are Your Marketing Dollars Buying Customers or Just Renting Them? another Pro-only article from MarketingProfs.
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