Any customer is a good customer for your small business, right? After all, if someone wants to buy from you, what more can you want? Actually, lots. It turns out some customers are not worth having. And you have to learn how to get rid of them.
Anyone whose been in business very long can tell you there’s a huge difference between good customers, not-so-good customers, and downright bad ones. Some customers cause you headaches, are more work than they’re worth, and some even cost you money.
So what makes for a good customer or client?
- They keep coming back. The best customers look for a relationship, not a single product or one-time service. It takes a lot of time, energy, and money to acquire new customers, so court those most likely to keep coming back time after time.
- They shop on more than price. Good customers value more than just a low price – they look for quality, service, convenience, reliability. They’re the customers who will recognize (and pay for) the extra value they receive.
- They buy a lot. It’s expensive and time consuming to make lots and lots of small sales to lots and lots of customers. Customers who bring in big dollars are the backbone of your business.
- Their purchases are profitable. Even if you’ve priced a product or service correctly, if a customer is too demanding or takes up too much time, your profit evaporates. Of course, occasionally you may have to make some unprofitable sales to retain good customers, but clients who are always over-demanding can ruin your bottom line.
- They know what they want. By being clear about their wants and needs, and communicating them effectively to you, good customers help you do a good job of serving them. There’s nothing worse than trying to please people who don’t understand what they want.
- They pay on time. For any business that sells products on credit or any service in which payment is collected after the service is delivered, prompt payment is critical to keep cash flowing and your company in business. Help insure this by accepting credit cards or offering discounts for upfront payments.
- They are ethical. Everyone wants to do business with people they like and respect. The last thing you want is to be constantly watching your back to see if someone is trying to cheat you.
- They are financially stable. You don’t want to have to worry about whether your customers can pay their bills.
In most cases, bad customers represent the opposite of good customers: they’re fickle, just looking for the lowest price. They take up lots of time, then they fail to pay or pay very late. Even if a customer is profitable, they can be so problematic that they’re simply not worth it. If you dread dealing with certain customers, it might be time to let them go.
But how do you do that?
Here are four ways to dump that terrible small business client or customer:
- Be busy. If yours is a service business, you might choose to make the bad customer the last one in your appointment book. (“I’m completely booked until next month.”) Customers who are frustrated may choose to go elsewhere.
- Be expensive. Figure in the extra cost of serving a high maintenance client. This will either make it worth your while to keep bad clients, or prompt them to seek similar products or services elsewhere.
- Be unresponsive. If the client is someone who requires a proposal or bid, take a long time to respond or don’t respond at all.
- Be direct. Simply tell the client that you’re no longer able to service their business.
But be careful not to:
- Be rude. With review sites, the above ways of dealing with difficult customers may come back to bite you in the form of scathing negative reviews. Handle bad, unprofitable customers delicately and diplomatically.
- Be discriminatory. Make sure you fairly evaluate purchasing patterns and behavior of clients and that you’re not pre-judging someone based on race, gender, age, nationality, and the like.
Whether your bad customer is a financial or emotional drain, take action sooner rather than later and get rid of those customers who make you dread going to work.
Copyright, Rhonda Abrams, 2017
This article originally ran in USA Today on June 14, 2017