It is important to find your ideal target group, the people you should be selling to. A way to do this is to find your dream customer, those you absolutely love to work with and for. But have you ever thought about this?: It is equally important to know who you don’t want to work with. As much as you should work on your marketing to attract the customers you want, you may also need to fire some of your existing customers!
Bear with me. Some people may think I’m crazy, but the thing is, a customer is not the same as a customer. Not all business is good business.
As a rule of thumb, you should fire about 20% of your customer base. Hear me out on this one. The Pareto Principle, which you may also know as the 80/20 rule, basically tells us that 80% of our business most likely comes from 20% of our customers. We need to make sure that we identify these customers and attend to them as well as we possibly can. They are the good ones and tending to them will generate much more return than from any other customers. Then we want to go out and find more just like them.
If this applies, it’s also logical that 80% of the hassle and the trouble and the negative times we have in our business are due to another 20% of our customers. When it comes to these difficult ones, it’s quite alright to say: “No thank you. I’d rather not have those 20 percent of customers. I’d rather just skip them and focus on the good ones. :)”
So who are those difficult customers? Those will be the ones that haggle on price, don’t pay on time and make unreasonable requests. Some of them can be simply rude and all of them are a general pain in the behind. I’m sure you know who I am talking about ;)
This makes everyone unhappy. They are unhappy – not because of you, but they are probably just generally unhappy – and there’s nothing you can do about it. However, they don’t see that, so they are probably going to blame you for their unhappiness (because that will be easier than realising that their happiness is up to them) and they will talk about it, believe you me. They will talk about it with their friends, with their family, with their co-workers, generally with anyone who will listen (and probably also with those that don’t want to listen :) So they are not only a pain in the ass, not only will they not be creating more business for you by recommending you, but they are full on sabotaging your business by badmouthing you to the world through no fault of your own.
These people are poison. Not only by slagging you off to the world, but also because they are bound to affect you, no matter how hard you try not to let them. You will be unhappy because of dealing with them and the constant hassle they bring, and you would have to be a saint for that not to affect you in other things that you do. This means that when you are dealing with the good customers, the ones you love to do business with, you are more tired, more cranky and generally not on good form – so you are starting to risk those relationships as well! Not to mention the time and energy you waste on the difficult customers which would be much better spent on the good ones.
It is tough enough to run a business anyway, but if you also have to deal with difficult customers, it can really wear you down. So it is quite alright to just say: “Thank you very much for considering us. I think actually you might find that this other company would much better fit for you than we are. “
Be polite about it. Nobody needs to get hurt or anything. Just find a civilized way of moving them on. You will find that you will be much happier. It will also give you a lot more time and energy to spend on your good customers which in turn means better business.
Start examining your customers and figuring out which 20% are the great ones – spend more time and effort on them. Then figure out who the difficult ones are and fire them. Then there are bound to be some customers that don’t fit into either category (60%, by my calculations lol :) Serve them, but don’t go overboard – remember where the real rewards lie ;)
Have you found your bad customers and fired them?
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