In this difficult economic climate, we all want more customers, because more customers means more turnover and more profit, right? Well the answer to that is that it actually depends and some customers might actually be sapping your hard won profits.
In actual fact, not every customer is a perfect fit for your business. That is why it is so important to identify who your ‘ideal’ or niche customer is. If you find your ideal customer, they will benefit from what you offer, they will be delighted with you and your businesses, they will return again and again and hopefully they will turn into an ambassador for your brand. That is because you are a good fit.
The problems of a bad fit
Now, consider the customer who is not a good fit. First of all, they might ask you to make adaptations to what you do. Immediately you are in the reals of the uncertain, the new and the potentially costly. Will you have to spend money to meet their expectations? Will your inexperience mean that your service delivery suffers, or the product is below par? How much time will you spend trying to work all this out? And how many ‘ideal’ customers will pass you by because you are focussing on this toxic customer and you miss them? This type of customer is not generically bad, but they could be bad for you.
Whilst many customers are wrongly labelled as difficult, let’s face it, some have personalities that are just plain awkward, or just don’t quite work with your company culture. I went on some training recently and one delegate turned up late, moaned that lunch wasn’t ready yet, interrupted when other people asked questions and left before the end. As I had the pleasure (!) of sitting next to him, he discovered that I did sales training and expressed an interest in my upcoming course. I had to put him off – the thought of his toxic behaviour in a room full of people who had paid good money to learn from me was just unimaginable.
The Pareto Rule
Vilfredo Pareto is well known for developing what we now call ‘The Pareto Rule’ or 80/20 rule. What this means in simple terms is that 20% of your customer base generates about 80% of your business and 80% of your customer base generates about 20% of your business. This has been shown over the years to be statistically pretty accurate in many walks of life, but is particularly important in sales. So, if you turn it around, then 20% of your customers probably give you 80% of your problems, difficulties, negativity, additional cost, time, effort and, in summary, toxicity. Imagine if you could get rid of that!
Do a Toxicity Audit
Yes, it can be frightening getting rid of customers, but if you still have doubts, imagine how quickly an unhappy customer can spoil your reputation. With the advances in social media, it is easy for years of work to be trashed. Do yourself a favour – let your competitors have the toxic customers (give them the worry!) and allow yourself to sleep easy, focus on your good customers and prosper. You will never look back!