Have you ever had a customer or client that makes you cringe when they call (or you see an email come in from them)?
"Oh no, not that a$$hole again!"
Our natural instinct in business is to try to treat every customer like they are a good customer. Even the ones we dislike working with.
Given the hard work required to get a new customer, the thought of losing a customer can be scary.
But just like you have to pull weeds in your yard or your garden, you also have to "weed out" bad customers.
The Pumpkin Plan
Mike Michalowicz, the author of The Pumpkin Plan: A Simple Strategy to Grow a Remarkable Business in Any Field, includes a beautiful approach to identifying the customers that need to go.
First, list your customers and rank them by revenue. Then, before identifying the ones that make you cringe, answer these questions for each one:
Do they pay on time when they feel like it or not at all?
Do they refer others to you, or do they keep you all to themselves?
Would they tell you if you made a horrible (or horribly stupid) mistake, let you fix it and let it go, or would they rub your nose in it every chance they got?
Is a super-sweet deal on the horizon, or are they maxed out with you?
Do they tell you what they need and want, or do they expect you to read their minds?
Do they respect your expertise, or do they consistently undermine or question you?
Are they coming back for more, more, more, or are they one-hit wonders?
Bad Customers Crowd Out Good Customers
One of the best reason to let bad customers go is to make room for good customers.
It is an important part of learning how to be more profitable in business.
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