Marcia Yudkin gets it right – again!
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According to Reed Holden and Mark Burton, authors of Pricing With Confidence, 79% of business-to-business companies serve any customer they can get.
What's wrong with that? Typically, they explain, 20 percent of the customers account for 225 percent of the profit, with 80 percent causing the firm to lose money. And that statistic doesn't take into account the extent to which the unprofitable customers increase your worry wrinkles and gray hairs.
Being choosy about customers benefits both the bottom line and your sanity. Consider sending away those who:
* Always press you for discounts
* Need or demand an exorbitant amount of handholding
* Previously requested refunds
* Are unpleasant to deal with, nitpicky, abusive, frenzied, uncooperative or irrational
* Threaten to go to the competition
* Never pay on time
* Represent where your company used to be rather than where it is going
"It's simply better for you that unprofitable customers are served by your competition," say Holden and Burton.
After shedding the undesirables, develop a clear picture of who you want as clients and pursue those. You'll then have the positive energy needed to land them!
From The Marketing Minute, 18 February 2009, by Marcia Yudkin. Reprinted with permission.