Let’s talk about why you don’t need every customer.
You just need the right ones.
One of the great things about being a B2B company is I’ve had the honor of working with thousands of business owners. You get to talk to them and develop deep relationships.
With all these interactions, you learn how to work together and grow your mutual businesses. And it’s in this part of the relationship that I see one of the biggest business mistakes, that’s made time and time again.
That mistake is taking every customer.
In conversations, I learn about colleagues and business owners that are desperate for sales and revenue and will agree to work with anyone.
They’ll agree to do things outside their expertise, just to land a deal. They’re fearful of losing customers and would rather struggle through trying to perform a task outside their core competency, rather than be honest with themselves by admitting they’re not a good fit to work together.
Because you’re desperate to make money and grow, you say ‘yes’ to projects you can’t deliver on.
I’ve been there. I understand what you’re going through. I empathize with you.
You don’t need every customer, you just need the right ones.
There’s a saying that 90% of your problems as a business come from 10% of your customers.
I don’t know where that saying came from, but most of your problems will come from a small number of your customers.
A lot of entrepreneurs, when they first start out, will do anything for a buck. They’ll take anyone to survive. Sometimes that’s necessary in the beginning.
The problem comes from when you let people down because you promised something you couldn’t deliver on.
Here’s an example. I was flying back from a technology conference last week, and ended up talking with a tech company. They were frustrated and they said they signed a new client who is outside their normal range of expertise. Long story short, the tech company didn’t charge what they normally do, and undervalued the scope of the project they were creating for the customer.
They ended up spending about three times more than they should have with the new client, and now they’re in a situation where they’re losing money because of this. Not to mention, the customer is not all that happy.
It’s a bad situation for everyone. You’ve signed the wrong customer that you’re not fit to take care of, and now no one is happy.
Now none of this is the customer’s fault. They were simply the wrong fit for your business.
A lot of businesses, especially new companies, just focus on getting anyone, they don’t ask if this is the type of client they can make happy.
In contrast, the alternative is finding the right customers, who are looking for services you’re actually equipped to provide.
What about customers that are awful to work with?
Now sometimes, you will have a customer who wants your product or service but is just plain difficult.
Sometimes, it’s not going to be your fault for failing to provide a service. There are cases where some customers are simply not the right fit to work with, despite all the signs telling you otherwise.
I’m an extrovert, and I like people. I have a positive mindset, and I want to positively impact those people through my interactions with them.
Obviously, not everyone’s an extrovert, and that’s fine. However, because I am an extrovert, I tend to get along with different personality types. It also means I desperately want to help those I work with.
There have been times when I realize I shouldn’t work with a person, and that’s okay. It’s not their fault. It’s not my fault. It is what it is. Through the years there’s only been a handful of times where there’s been a few customers I wouldn’t want to work with.
Sometimes it’s not their fault, and we just want different things and have opposite expectations.
It’s rare, but there are a few instances, where it’s only been that individual’s fault.
Beware of abusive relationships with your customers.
Now, I will say that our ability to work with some difficult customers have built some of our best relationships.
If you can work with lots of different types of people, you can build some great partnerships and trust. If you make someone feel valued and work with them, they’ll appreciate you and your relationship will be great.
The key to this is finding the right balance of patience and tolerance.
However, I have come across people I refuse to work with because for whatever reason, they have bad attitudes. They’re people that you’re never going to be able to make happy. They abuse their relationships, as well as mistreat vendors, employees, and business partners.
There’s only a handful of people that I’ve come across like that, but we won’t take their business. Sometimes these people really want to work with us, and we’ll just refuse.
If they’re dragging people down, I will not do business with them. The same can be said for my internal employee’s. I’ve even had to fire a few people based upon how they treated some of our employees. These cases were very rare, of course, but were ultimately out of line with one of our staffers.
One time, I even ended up eating an outstanding invoice for a thousand dollars, because I fired a customer. I politely told the customer not to worry about paying it, and that he didn’t owe us a thing. I apologized for the situation, even though I’m pretty sure the overall fault wasn’t on us. In the end, I don’t think we’re the right fit to help him.
We’ve had other people that no matter what we did for them on pricing or service they’re always calling and complaining. They’re trying to beat you up.
I wasn’t going to let our people be used and abused and, no matter the cost.
It’s better to let them go, than hold on and be miserable.
I’ve waived invoices and thousands of dollars of fees to difficult customers because it was better to give up the revenue.
Let them be someone else’s problem, or let them find someone who’s a better match and they’re going to be happier with.
Take that stress off of your business, because if you’ve got a bad customer that’s making it tough for your team members, they’re going to hate their job. They’re going to be worried every time that customer calls and get anxiety. If that’s happening, you need to get rid of that customer.
Don’t worry about losing that one stream of revenue. Be worried about taking care of your employees by creating a good work environment.
Clean up those few difficult customers. The reality is you’re doing yourself, and the customer, a favor by letting them go.
In the long run, money isn’t everything.
One of the biggest reasons new businesses put up with abusive customers is they’re worried about replacing that missing revenue.
When you run into a situation with a difficult customer, you have two options.
- Talk with that customer about both your expectations, and try and fix whatever’s wrong.
- Don’t be afraid to say “I don’t think we’re a good fit for your needs” and let them find someone else to serve them.
Either you do that or get rid of them, but don’t just keep dealing with the status quo.
If you can remove that 10% of the people who are wasting 90% of your time, you can go focus on finding good customers who are the right fit for your business.
I talked before about having successful relationships with vendors, and people who misuse you and your staff are not people you want to work with.
It’s just going to make you happier, and it’s going to make you more efficient.
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