Want to hear a secret? It’s a little taboo in the business world, but the truth is… not all customers are good ones. I know, I know, it sounds harsh. But have you only ever had top customers who were easy to work with and paid you well (and on time)? Pretty much no one can claim that all their customers have been like this. In fact, for the majority of businesses, there have been more than a few difficult customers and bad experiences sprinkled in along the way.
There used to be a perception that companies should accept any customer willing to write them a check because it’s revenue, darn it! But, over time, the reality has become clear. Customers who are a bad fit will actually cost you money and cause you headaches in the long run. So, is it ok to not want those kinds of customers? We say yes! Here’s how to first identify them, gracefully let them down (without guilt), and then be on your way to serving your top customers more fully.
Do A History Project
The first step in figuring out which customers aren’t ideal for you is to review your data. Look back over the past three to five years, and find any projects in which you lost money or were especially difficult for some reason. Also comb your financial system for customers who paid late (or never paid at all). Next, look at your online reviews. Which customers have left negative reviews about your business, particularly ones you feel are unfounded?
Then, survey your team and find out which customers they anecdotally remember as being less than awesome. They’ll likely have no problem putting together a shortlist of the customers who complained often, asked for way too many revisions, wasted time or were a bad fit overall… you get the idea.
Once you have these customers identified, you can start to spot trends. Were the majority of the difficult customers in the same industry, of a specific size or engaging in the same types of services? Try to find as many commonalities among them as possible. You may find that some of the issues were simply personality clashes, while others might have not worked because they weren’t the best fit for your company and what you offer. This is really valuable to determine, so spend some time here.
If you already have buyer personas in place, make sure to update them to reflect what you’ve learned. We’re big fans of negative buyer personas, too, which is where you spell out the exact kind of customer that won’t be good for your company in the long run. This can help you find them faster and be ready to turn them down before it’s too late.
Figure Out Your Verbiage
No one wants to be the one to initiate a breakup, and it can be even harder in business before the relationship has really begun. But if you’ve had initial conversations with a customer and have realized they fit squarely in your negative persona category, you must end things now in order to save both of you costs, time and aggravation down the road.
One of the best ways to let someone down gently is to have a referral partner you can recommend to them. Of course, if the customer is mean or aggressive, you don’t want to pass that negative energy onto a colleague’s company. But, if they’re a decent person and just a bad fit for you, they might be a great fit for someone else. Find some businesses that offer similar services to your own, but whose target personas look like your negative ones. If you can work out a referral agreement with them, this is a very easy way to ensure each of you ends up with your ideal customers and not the opposite.
If you don’t have such a partner, be direct and kind. Say something like, “We’ve enjoyed speaking with you and hoped to work together, but have come to realize we’re not the right company for you.” Be prepared for a customer to ask why, and have a few honest, tactful responses ready to go. For example, if you’re worried the customer would end up taking up too much time and costing you too much money, phrase it as: “We’ve scoped out your project and discovered we don’t have the resources to serve you at the level you’ll need.” This is truthful but spares the customer’s feelings.
Focus On The Good
Once you start to let go of the customers who look like a bad fit, release any guilt you may have. Yes, you said goodbye to revenue – but you also said goodbye to a drain on your profits, employee dissatisfaction and other unpleasantness. Now you have the availability to provide the highest level of service possible to your ideal customers, who will bring in more revenue and make your day-to-day work easier and more enjoyable. You’ll start to see a snowball effect, too, of more and more top customers coming through your door as you set boundaries and avoid engaging with difficult customers or those who are a poor fit for you.
Need help figuring out your target buyer personas and negative ones? That’s our specialty; give us a call.