Want To Grow your Sales? Fire Those Customers!

It is often believed in business that more is always good…more customers leads to more sales, more revenue and obviously more profits!

Jeff believed this too. Jeff is a freelance graphics designer married to his wife Mary with two kids. He designed stunning logos for aspiring entrepreneurs and already existing entrepreneurs too. He started off as a freelance graphics designer with a big dream of growing his business and finally owning one of the city’s biggest branding services. To achieve this Jeff prospected and cold called customers, he said “yes” to any graphics work that came his way, from business cards to flyers and occasionally designing logos for some big corporations.

He always answered his phone no matter the time of the day, he would answer calls on Sundays in the middle of the night…he said he wanted to provide “exceptional customer service” for his customers.

No matter how hard he worked he couldn’t break even. He had lots of customers but hardly made enough money to cover his bills. He worked so hard to meet deadlines that his family suffered because he never had time for his wife and two kids.

Jeff had over 50 customers; he tried to please them all! He is an intelligent, hardworking smart guy, but he was not succeeding in spite of his competence and large customer base. What could be Jeff’s problem and why was he not breaking even with such a huge customer base?

Most entrepreneurs are exactly in Jeff’s shoes and situation. I know it’s usually a good thing to have lots of customers especially as a new business owner, but more customers isn’t always more sales.Better customers means better sales!

If you’re trying to serve or provide services or goods to a wide customer base and are still stock with poor sales and meagre profits you need to reconsider your business approach. Here’s how.

Fire Your Customer

One way to start repositioning your business is to prune down your customer list. To do this you need to let go of certain types of your customers…yes, fire some of your customers if you want to change the status quo. Most businesses that thrive today are not serving everyone in their niche. Remember the Pareto Principle [the 80/20 rule],this applies to  nearly everything in business and you should deploy it in your business now. Here’s how to begin in firing your customers.

Assess Your Customers List

While you are required to prune down your existing customers to be able to grow your sales, this does not mean you fire everyone on your customer list. Here’s how to proceed:

  • List all your customers in a descending order of revenue
  • Fish out those customers who seem to rattle you a lot yet pay next to nothing to access your services or goods.
  • List out those customers whose calls makes you cringe

Qualify Your Customers

All animals are not equal, so you need to separate your customers based on the following yardsticks:

  • Those that pay fast
  • Repeat purchase or revenue customers
  • Has revenue potential in the future
  • Those  you communicate very well with them
  • Gives you valuable feedback
  • Are patient with your short comings

Once you are done with these analysis, the next thing is to grade your customers into :

A-perfect

B-near perfect but occasionally works you up

C-average [makes irregular purchase]

D-poor

F-disgusting

You need to get your emotions out of the way when you make this analysis. It is expected that you would want to make excuses for some customers and be tempted to give them “another chance” with your business. But I must warn you…if you need to grow your business, you really need to be honest and intentional with your assessment. Consider it as a weeding exercise on your farm.

If you want your seeds to grow, then you need to weed away the grasses that competes with the seeds you have planted in your farm so that you would be able to nurture your plants to eventually grow.

Create A New Customer List

Now that you have seen a clear picture of where each of your customers stand in terms of revenue generation for your business. You need to make a new list of customers.This list will receive all the attention in the world from you because they were the ones who are responsible for the good sales so far and most importantly-they were the ones who gave you their monies and business without much hassle.

This new list would include those customers who

  • present fresh opportunities for your business
  • provide referrals for your business
  • whose values resonate with your core business values.

How To Fire A Customer

  • weed out their services

Entrepreneurs are naturally good guys-it would be rude to get on the phone and literally fire your customer. One smart way of letting the bad ones go is to inform them that you no longer provide the kind of services that they engaged you on. That way you keep your good relationships in tact while subtly letting them outta ya hair!

  • Raise Prices

Yes raise your prices…this is one benefit of caring out a customer’s audit.A customer assessment or audit would give you a clear picture of those customer groups that has paid you more and the frequency of their purchase. You can benchmark the price paid by these customers and use it as a “weed criteria” to prune down those sneaky customers that distract you with their poor prices and prevent you from providing an excellent service to your “top-dollar” customers…stopping you from earning more!

Benefits of Firing Your Customers

Jeff’s major problem was having a diluted attention…and a diluted attention and focus ultimately leads to a diluted bank account!

To put a stop to this leak, what Jeff should do is to follow the exact steps outlined in this post. The benefit of pruning down your customers is simply to be able to choose a CLASS OF CUSTOMERS to serve and serve quite effectively.

Once you are able to identify those high value customers that appreciate your work and pay you well for the services or goods that your business provides. They will stick with you in the long run and you wouldn’t have to work your ass off in trying to serve a lot of customers to make the exact same amount that your new customers are helping you make.

Also these new class of customers would refer you to their friends or networks that share the same values with them…people  who you can work with because you’ve  prequalified the kind of customers you would be working with and these friends of theirs fit your ideal customer avatar!

Warning

Once you fire your bad customers, it’s going to take a little while before you build up your ideal customer base. DO NOT GO BACK to your old customers no matter the pressure you find yourself.

While this business growth strategy is a sure-fire way of growing your business, its application is targeted to help you select a class of customers to serve. Once you’ve identified your new customer avatar…it is advisable that you prospect for new customers based on your new customer avatar checklist and NOT TO fire all of your customers.

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