Sacking Customers…to Grow Your Profit and Your Enjoyment

Have you ever had a frustrating customer? Did they always haggle and buy your cheapest product or service? Did they pay late? Did they complain?

Of course, you have. We’ve all had them….and they’re not much fun. As true as it is that 20% of your customers will drive 80% of your revenue and profit, so too will 20% of your customers cause 80% of your grief and use up most of your team’s time!

Among the easiest ways to improve your business is to simply get rid of your worst clients. Now it really is quite easy to do, but I recommend working through 3 steps to ensure that you do it successfully and with the highest chance of it actually improving your business. No point in getting rid of half your customers to then realize you don’t have enough revenue left to pay the bills!

Here is how to sack customers

1. Sort your customers into the following categories, with the implied actions:

Awesome – the best customers, who are a joy to work with, who deliver you good margin and profit and refer others to you. Exceed their expectations and be sure to ‘WOW’ them!

Basically OK – pretty good customers who purchase well, won’t cause headaches and often deliver a good, solid and profitable base to your business. Look after them well and proactively work with them to grow them into A-grade Customers.

Can’t deal with them ON THIS BASIS. These customers have the potential to be B’s or even A’s but need to adjust something. Perhaps they pay a little slowly sometimes or don’t buy your optimal packages. Communicate with them to clarify how they need to change and ensure that they do. Perhaps just put their prices up to make them worth the effort. Or change their terms of engagement with you. Give them a chance to become B’s or A’s.

Dead to you! These are your worst customers and need to move on. Have a clear plan to move them on.

2. Act on your plans for all four groups. When it comes to your D’s, the sooner you do it, the better. This simply involves communicating with them that you’ll no longer be in a positive to serve them and you can recommend alternatives. Typically, this means referring them to your competitors and letting those competitors deal with them.

3. The final step is key to ensuring the success of this strategy. By sacking your D’s, you will have freed up a good chunk of time for your team and yourself. Use it well. In particular, use that time to target more A’s. Be incredibly clear on what they look like and what you need to offer them. Then activate a strong plan to go out and get as many as you can.

Early in my coaching career, I had a client (a bookkeeping firm) who, to this day, sacked more of their customers than any business I’ve worked with, read about, studied or even been aware of. That year, they were my second fastest-growing customer. They were quick to fire problem customers and they were very disciplined in going out and targeting more great customers.

This is a process that can be implemented quickly and can have a very rapid positive impact on your business. It creates the opportunity to really grow your business, will always make it more profitable as you grow with a high quality of customer and, perhaps best of all, will make the business a more positive and enjoyable place to work, as you work with the right type of customers instead of the nightmare type of customers.