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.
2. Is there something different you can do to improve the situation?
If you're dealing with a dissatisfied customer, find out what the customer wants to see from your company to remain your customer: More frequent updates and interactions with your sales team? A higher level of technical support? A re-thinking of the way your solution works to help the customer's company adapt to changing business needs?
Whatever the customer needs, find out if it's worth it to your company to deliver it. If the requests are unreasonable or too time-intensive or too costly, the better choice might be to say goodbye to that customer and move on.
3. Is the customer preventing you from pursuing better opportunities?
Do you have a customer who is so high-maintenance and emotionally draining that you're being held back from reaching out to better customers or expanding into new markets? Could the time you spend trying to appease an unhappy customer be better spent on finding new customers?
In sales, we often think that finding a new customer is harder than keeping an existing customer happy, but some unhappy customers require more time and effort than they're worth. If a customer is so challenging that he is preventing your business from taking on other important tasks, then it's time to reassess the business relationship.
4. How do you feel when the customer calls?
If you're a small business owner, a lot of your business decisions come down to your own intuition and personal preferences for how you want to work. You can't run your business purely on emotion, but you also can't let numbers dictate everything you do.
You shouldn't have to put up with a high-maintenance customer who is making you want to get out of the business. Instead of getting dragged down by customers who aren't worth your time, don't be afraid to decline their business or refer them to a competitor.
Spend your time and energy on the customers who are most energizing to work with. Often, customers who are good to work with will, in the long run, be more profitable for your business.
* * *
Not every customer relationship can be salvaged. Sometimes you need to know when to quit and say "no" to a customer who is not the right fit for you and your business. If, however, such a customer is vital to your bottom line, that might be an indication that you need to refocus on your sales pipeline. A strong and stable business should not be dependent on a handful of clients.
As a business professional, your goal is to keep our customers happy; but, if a customer is overly challenging and draining to your business, it just might make sense to let go. How nice would it be to redirect you focus back on the customers who are enthusiastic about your business?
Your best relationships deserve your attention most of all, because they are the ones who will keep buying from you and keep referring you to others.
Al Davidson is the founder of Strategic Sales & Marketing, https://www.manageyourleads.com/ a "leading light" among appointment setting companies, https://www.manageyourleads.com/services/appointment-setting/ providing lead generation services for global clients.
Know someone who would enjoy it too? Share with your friends, free of charge, no sign up required! Simply share this link, and they will get instant access…
You may like these other MarketingProfs articles related to Customer Relationships:
- Boost Your Sales With Strategic Gifting [Infographic]
- How to Use Empathy in Your B2B Brand Storytelling
- The Role of Customer Empathy in the Future of Marketing
- How to Offer More Value to Your Crisis-Stricken Customers [Infographic]
- CX Will Be Essential for Rebuilding After COVID-19: Four Steps You Need to Take Now
- Planning Your COVID-Related Communications: A Flowchart [Infographic]