Less is More! What to do with loss-making customers.


I was talking with a business owner last week. We discussed the journey we had been on over the past 8 months. His profitability had increased, and his life was much simpler. During our discussions we reflected back on one change we had made to the business...

We had worked on what the ideal customer looks like. After the discussions it became apparent there were a number less than ideal customers and some loss-making

customers. What were we to do?


We investigated why they were making a loss and how we could improve the customers financial performance. We quickly came to the conclusion that increasing prices or providing alternative products was not an option. Incidentally, these were also the customers that were slow payers, had multiple of alleged faulty products and constantly complained. You are probably thinking of those customers right now!!


We discussed the importance of each customer, their future revenue potential and referral source, regardless of their poor financial performance.

We composed an email that simply said we were not able to provide the current pricing and credit terms. In essence, their prices were going up and they were no longer offered trading terms. They needed to pay upfront.


As expected, there were a few customer complaints. However, the staff loved the changes. They no longer had to deal with challenging customers that did not add to the businesses bottom line.


I would call that a win!!


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