Saturday, 31 May 2008

Would you sack a customer?

I found this on Ecademy:

Would you SACK a customer?
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.

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

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