Would you sack a customer?

I found this on Ecademy:


Would you SACK a customer?
by Laurence Lowne on 7-Mar-08

Yes, I would, and here's why, which I believe is the real question.


Robert Craven introduced this idea to me and many others a few years ago, and now each year, I do sack customers, or choose not to work with them. Robert suggested putting up your prices by 10% as one method. You will lose a few, but overall, your profit will increase. It is not a method I adopt, since I am in the market of reducing costs.


He also suggested looking at those, who take up too much of your time, for little intrinsic wealth generation applying the 80/20 rule and finding out which of your 80% add no value to your core business. This also applies to suppliers too - and I sacked one last year, even though I was in their top 5% of resellers. I have taken it one step further, and if I perceive hassle arising from a potential customer, I just won't take them on in the first place.



... I find the best policy is clear, honest and precise explanation - most decent business people will accept your decision, and most likely change their ways, if they really wish to stay a client.



This happened to me last year.


I had one client, who had simply become too demanding, and gave him the option of finding a better supplier to replace me. He spent a month (my notice period) researching the market-place, and came back to me and made an apology, and continued as a customer. He has now become valuable, since he provides regular referrals.

RELEVANT LINKS
Ecademy - the original Ecademy item
Sacking Customers - blog entry
Mail On Sunday article - "Awkward Customers? Well Sack Them"
Get Rid of The Scum - entry on this blog
Let's Talk seminars - webpage for the seminars

'Grow Your Business - Now' - Bright Marketing session

'Grow Your Business - Now' is the title of the three-parter we've just been running on the outskirts of Bath.

Some seventy-odd businesses squeezed into the Leigh Park Hotel for the second workshop, 'Bright Marketing', and were hit between the eyes with the tough questions:

"What did you say you'd do when we last met and what have you actually done? Why?"
"Why should people bother to buy from you?"

"What makes you different from the rest?"
"Where do you want to be in three years?"
"What's holding you back and what are you going to do about it?"

While the morning was all very light and bright and chatty, the delegates were taking the questions to heart and the feedback confirmed that to us.

This unsolicited testimonial came in just this morning (company name/product disguised to 'protect the innocent' - permission given to share the quote):

"Having applied the 'Bright Marketing' philosophy, raised our prices, selling on USPs and going back to old clients and getting referrals, the orders are coming in!!

We've started to price every unit properly adding 25% for overheads, we have also decided to make sure that each job gets us at least 35% profit margin.
Our part-time secretary is sorting out our office and creating systems and formulas - Bleedin Hell, you should be proud!"

RELEVANT LINKS
Bright Marketing - the book

Bright Marketing - the workshop

Grow Your Business - Now - the workshop (sponsored by Mowbray Woodwards, Jelf, RBS & Juice) - more photos will be put on this page next week!

The Truth Is... No-One Seems To Care About Business Link

Doug Richards totally lambasted the Business Link last week Doug Richards Rips into Business Link (on this blog) and Small Business Support Is Rubbish Says Richards in Management Today.

I felt that this was a brilliant opportunity for the BL to fight back, defending its corner and demonstrating how well is has been doing.

Instead there has been radio silence.

And the extraordinary thing about the radio silence is that it has been radio silence from all concerned... no letters of support from Mr Angry, MD of Widgets Inc..., no hate-mail or poison-pen comments from Bertie Bankrupt... no endless grumbling from Grumpy Old Management Consultants... no letters of complaint from the venomous BL-haters of old... just pure silence.

It is as if no-one cares.

RELEVANT LINKS
Doug Richards Rips into Business Link - on this blog
Small Business Support Is Rubbish Says Richards - Management Today

Sunday Times Green List - show me the money

The Sunday Times Green List was announced on Sunday.

I discovered that I/we have worked with no less than four of the Top Ten which is amazing. I will leave you to guess which four. (Answers on a postcard! - actually it is four out of the Top Nine!)

For whatever reason, I hadn't been aware that these companies were going for the award (or maybe I worked with them a while ago) so the Top Ten status was a total surprise to me.

Being shortlisted to the Top 10 in the country, or winning the award for an industry or a region is a clear marker in the sand in terms of your green credentials...

Brilliant as a way to separate your brand from 'the rest', great for staff morale, good for sales and profits. And great for the environment. This is the exact message that our Barclays seminar Let's Talk... Green Business communicates to its audiences.

RELEVANT LINKS

Sunday Times Green List

Let's Talk... Green Business with Barclays

“Let’s Talk… Green” in Liverpool – it’s about the money!
Let's Talk... Green/Profit/Marketing/Exit events with Barclays and The Directors' Centre
Is Green The New Black? - Robert Craven explains why going green will not just benefit the environment (Start Your Business, November 2007)

What's so terrible about making money?"

Our correspondent 'very succesful brit entrepreneur' has pointed us to a rather good article by Luke Johnson in today's FT What’s so terrible about making money?.

And I quote Luke Johnson, "I remain convinced that many intelligent, ambitious individuals would adopt a self-employed way of life if they could strip away all the cultural bias and realise that building a venture can be a creative, even an heroic, endeavour. In truth, becoming an entrepreneur is a vocation, like fine art or quantum physics or teaching. But intellectual snobbery, prejudice and the comfort blanket of big organisations means business frequently fails to win the moral arguments."

Yes, a healthy antidote to what is seen as a pessimistic undercurrent in David Storey's article - Professor David Storey in The FT.

Meanwhile, I am surprised that the Storey debate has caused such a stir while the Doug Richards Report (Doug Richards Rips into Business Link) seems to have passed without comment.


RELEVANT LINKS
Lessons that are wasted on entrepreneurs - the blog entry on Storey's article and subsequent comments
What’s so terrible about making money? - Johnson's article
Doug Richards Rips into Business Link - blog entry
Claire West’s article Dragons’ Den Entrepreneur Doug Richard Wants To Replace Business Link

M&S profits rise - how?

M&S sees profits increase to £1bn at bbc.co.uk
"Overall sales were 5.1% higher at £9bn… For the year as a whole, UK like-for-like sales fell 0.5%… New stores and expansions helped M&S increased its shop floor space in the UK by 4.8% during the year … international sales were up by 16.8% to £712.9m, while [international] operating profits grew 33% to £116.4m. "

Maybe they attended the Let’s Talk More Profit seminar in Southampton!! It looks like they must have done.

So, how did M&S do it? Some permutation of:
- Increase prices
- Decrease direct costs
- Work the 80:20 – sack under-performing suppliers/staff(!?)/customers
Then
- Increase volumes – get more customers
- Get customers to buy more
- Get customers to buy more often

- Stop 'em leaving.

If its good enough for M&S then it must be good enough for us.


RELEVANT LINKS
M&S sees profits increase to £1bn – BBC article
Let’s Talk... More Profit seminar - more about the Barclays seminars
Let's Talk... More Profit in Cardigan and Swansea – blog entry
Sacking Customers – blog entry

Recession Blues for Recession Bores

3 seminars, 300 small businesses at recent Barclays events – all asked what’s on their mind…: only one mentions the recession…

1 conference, 300 growing businesses (5mill+ turnover) asked how they see the future of the economy over the coming 12 months…: only 4% were pessimistic…

1 private dinner, 12 businesses asked about the recession…: three said “bring it on”, two recognised that the recession would impact their business.

Maybe entrepreneurs don’t see things through the same recession-tinted spectacles that the media do.



Thought Bubble
In the last recession, the recession bores said “when you’ve been through as many recessions as me... blah, blah…”

Now I am ‘that age’ and yet recession bores still say “when you’ve been through as many recessions as me... blah, blah…”

My Point
Entrepreneurs see the upside... the opportunities... and see a different landscape. The future will be tough for some and there will be casualties over the next year... Let's not be too glib about it all.


RELEVANT LINKS
Recession Blues Article