How Firing Some Customers Can Lead to Greater Revenue

If you are a business owner you are going to want to build your customer base where you can get as many people to purchase your products or services. To you, it would be counterproductive if you had to let go of one of your customers for one reason or another. However, there are times where it is more beneficial to fire some customers to gain greater revenue.

Let's assume that you own a landscaping business. A customer wants you to mow his lawn and you send out one of your employees to do this. This job takes him an hour to do the job. The customer calls and complains about the quality of the work that he does. You check out the work yourself and see no problem. However, you either send the employee back out to fix the "problems" or you just reimburse the customer the money that he paid to have the job done. This customer does this routine several more times before you get fed up. You are paying the employee money to complete the lawn mowing service, which is quality work the first time. In addition to this you have expenses such as transportation costs back and forth to the job, gas to operate the lawn mower and general maintenance on the equipment. With this customer, you are losing a profit rather than creating revenue. It is better not to accept any more jobs from him.

Another example is that you are a store owner that allows customers to purchase your merchandise on credit. You have a set amount of money an individual needs to pay each month for products he purchases. Like all stores that allow customers to purchase on credit, you will have ones who are not willing to pay the amount that they agreed to. While this will hurt their credit, the customers who do this will not care; they got something that they wanted for free. When you deal with customers like this, refuse to allow them to purchase something on credit; strictly make them pay with cash on future payments.

You may have to get rid of a customer to prevent losing future ones. The most common examples are the disrespectful and rude ones. For example, you may own a bar. For a while this one customer comes in and becomes intoxicated. It gets to a point that he is constantly trying to pick fights with the other patrons. Eventually you notice that some of the other customers are going to other bars because of this individual. You decide that you do not want to lose any more patrons. Therefore, you kick the disrespectful customer from the bar and ban him from returning.

You may be involved in direct sales. Take Kirby Vacuums, for example where you need to conduct a demonstration of the vacuum cleaner in individual homes. The demonstration usually takes two hours to complete with the hope that you will get a sale and maybe some referrals. One of your potential customers always makes an appointment for the demonstration because he gets his carpet cleaned. However, he always refuses to purchase the cleaner. When he is asked to give referrals he states that he is uncomfortable giving his friends names and addresses. Since this type of customer most likely will never purchase the Kirby, it is best to not do the demonstration in his house. Two hours of the demonstration tome could be spent on another potential customer.

While it is important to have as many customers as possible, you may need to get rid of one once in a while. Some are never pleased no matter how hard you try. Some are just there to get a product or service without having to pay one cent. Others are so rude and disrespectful where you are in danger of losing more valuable customers. Finally, some just do not want to purchase your product or service. In these cases, it is more profitable just to get rid of them.