Category Archives: Sales and Marketing

Fire Your Customers – And Increase Your Profits

You’ve heard it over and over again: the customer is king. Just bend backwards and ensure that every single customer is 100% satisfied and serves as a reference, helping you grow your business. However, blindly following this rule can be a very wrong business strategy.

Instead, try to differentiate between customers, and only treat those customers exceptionally well that you want to keep. No, I am not advocating sending all your customers to the competition. But if you really look closely into your customer base, you will surely find some customers that are a pain in the back. You know, those customers that squeeze you for every possible discount, always want more than what you are prepared to give, and are extremely slow with payments. Those are what I consider the bottom 10 – 20% of your customer base.

In most of the cases the effort required to close a deal, to satisfy those customers and to subsequently collect the payment is significantly higher than with your average customer. And yes, the industry in which you are in obviously plays a role in determining whether a customer is worth keeping or not. What constitutes slow payment and difficult customer for one type of business could very well be an average customer for a different type of business or industry. Even within the same industry there are vast differences in the clients that you attract and keep.

The problem is that if you have too many of those slow paying and difficult customers who take most of your time, you don’t have enough time left to dedicate to you’re A-List of customers – those that do pay on time and are grateful for your business. You spend too much time dealing with customers who are not that profitable, and not enough time with those customers that really create value to your business.

Instead of treating all of your customers equally, you may want to consider to separate your customer base into 3 categories: A / B/ and C Customers.

How you distinguish between them may be arbitrary. You may want to categorize a customer as an A customer because he pays very promptly and you never have issues with payment. Or because the profit margin for specific customers is extremely high – compared to your other clients. Or because they are just very influential and very happy about your service, but you don’t make much money with them. Or all three – how you separate them is up to you.

What matters is that you try to convert those A-customers into raving fans. They should not be satisfied with your product, service and company, but rather extremely delighted and enthusiastic about your business. Having enthusiastic customers is indispensible if you want to continuously grow your business. Those customers act as brand ambassadors and will help you get a significant amount of new business through references.

On the other extreme you have C-Clients. Those are customers that for a variety of reasons you just don’t want to deal with. Those are the customers you may want to consider sending to the competition. This move will not only free up your time (so that you can spend more time with you’re A-Customers), but also allow you to take on more (i.e. other) customers which hopefully will turn out to be B or A-Customers, and thus increase the profitability of your business. In addition, by sending those customers to your competition you create additional work for your competitors with a client you know is not worth pursuing.  This keeps your competitors busy with non-value added work. I actually don’t mind if my competitor spends a lot of time dealing with a particular difficult client that takes up their time – I’d rather have them busy fighting for C-Clients than trying to convert my A-Customers.

In the middle of the scale you have B-Customers, which usually form the majority of your business clients. Those are the customers for which you might just want to continue what you are (hopefully) doing now. Treat them well, follow up, ensure you meet their expectations. You might even want to see if you can convert the one or other B-Customers into a raving fan A-Customer.

It is not a bad thing to tell C-Customers that you may not be able to help them moving forward. Ask yourself: if you would loose this specific customer, would it really be so bad for your business? If the answer is no, don’t be afraid to let them go.

3 steps for sustainable business growth

Every business worth its salt is very concerned about growth. Unfortunately specifically SME’s cant pay the big bucks required to afford world-class sales staff. Good news: you don’t have to, if you already have existing customers. You just have to follow up with them, and grow your business through referrals.

When people think about sales, they think about new prospects, referrals, new leads, marketing etc. Too often one of the most likely potential leads is forgotten: your existing customers. Existing customers have already bought from you. They are already familiar with your sales process, your products and services. And they had been convinced enough to sign on the dotted line and give you the order. Hence your barrier to sell additional products to them is significantly lower than selling to new prospects. Why not just go back to you existing customer base and sell to them?

Unless you have a very unique one-time use only product (like an undertaker) you will most likely be able to continuously sell products to an existing customer. For example, if you sell dog food, you can be assured that every single customer who bought dog food from you before will have to buy dog food again. Why not make a real effort to stay in touch with those customers, update them about promotions, give them the equivalent of frequent flier miles, special deals, etc.? You already know that they need dog food, all you have to do is to make sure they buy it from you instead of the competition.

If you sell websites or any other IT solutions, try to find a way to provide ongoing maintenance. This way you not only have continuous revenue, but you are also always up-to-date on potential changing requirements of your existing customers, and you can provide additional solutions as and when required. And because you have a better knowledge of the customer as a new entrant, you should be able to continuously sell into your existing customer base.

The same is true for almost any other business. Customers will continue to buy TV’s, phones, DVD’s. Even if you have a hardware shop, you will have repeat customers.

No matter what your business is, it pays huge dividends to simply stay in touch with your existing customers. Follow up with them: are they happy? Do they need anything else that you might be able to provide? Do they know of anyone else that could use your product / service?

The solution to building a sustainable, growing business is simple:

  1. Have a great product / service.
  2. Ensure you have a satisfied customer.
  3. Follow up with that customer to get additional business and referrals for new customers.

Most businesses stop at point 2. Sadly, many businesses even stop at point 1: they have a great product or service, but they fail to follow through with the customer until the customer is 100% satisfied. Really happy customers are your best sales people, and make the easiest prospects for follow-up sales. All you need to do is to continuously follow up with your existing customers, and don’t just ignore them once the initial sale is over.