Some customers are less profitable than others.
Know who they are.
To improve your bottom line, concentrate on
selling to your more profitable customers, and
de-emphasize the less profitable ones.
Here are some less-profitable customers you may
recognize, and whom you may wish to subtly weed
out:
-
Complainers.
How much time and money do
you spend responding to complainers? While you
must hear and address legitimate complaints,
chronic complainers will never be satisfied.
They are a continual drain on time and
resources, and damage your image by bad-mouthing
you to potential customers.
-
Cheapskates.
Service providers recognize
cheapskates as people who want 120 percent of
what you sell for 80 percent of your price.
Obviously, if your profit margin is predicated
on delivering 100 percent of what you sell for
100 percent of your price, these folks shrink
your bottom line.
-
Bargain shoppers.
These buyers are loyal
only as long as your price is lowest. Almost
always, targeting bargain shoppers is a losing
proposition. Every sale must be won anew. Since
you only won them in the first place because you
were cheapest, don’t expect them to come back
when someone else become cheaper. Also, realize
that price-cutting wars only reduce your bottom
line.
One caveat: Sometimes more profitable customers
begin their relationship with you as less
profitable customers. If you have a good
understanding of your target market, you should
be able to identify those less profitable
customers with potential to graduate to
more-profitable status.
Don’t chase them away.
Help them mature by doing what’s necessary to
make them more profitable. Usually, that means
giving them what they want, at a price and in a
manner they find to be fair.