Is it ever a good idea to turn down business?
When you start your company, most of the time you're willing to take almost anyone as a buyer. You're tired of being in debt and you want to start bringing in revenue. At this stage, one of the hardest decisions to make is when to walk away from a customer. Is a bad client worth the money you'll receive? Will this customer help move your company forward? Many times, the answer to both questions is no.
There are certain clients we must avoid: those who drain our time, abuse our service, and are not excited to work with us. Not all business is good business, and at an early stage, bad buyers can destroy your startup.
Here are the three signs you should look for when thinking about dropping clients:
1. They Have a Bad Attitude
This may sound a bit elementary, but your customer's attitude toward you is crucial. When the customer calls, are you excited to pick up the phone?
If customers seem mean or rude when you speak to them, that is a huge red flag. Unfortunately, some clients that you'll sell to will look down on you because you are a vendor. If you start to experience this, you need to walk away. Don't take abuse from customers just because they are going to pay you. We became entrepreneurs so we can have freedom, create solutions to help others, and love what we do. If a customer doesn't help fulfill that, he or she has to go.
2. They're Taking All Your Resources
There's always the customer who makes ridiculous demands on your company. Early on, you'll be more likely to let clients bully you because you want their business. When this happens, remember the sacrifices you make when you tailor your product to please one buyer. First, you start pouring resources into a specialized solution that may not lead to positive returns. Second, you set unrealistic expectations for future business. Once you bend over backward for one client, others will start expecting similar treatment.
When we started Alumnify, some of our schools would ask us to over-customize their applications just for them. At first, I supported the idea because I thought making customers happy was always the right decision. Over time, I noticed that as we continued to do this, more and more of our clients expected this kind of service. This not only took up resources and time, but also reduced the amount of new business we could bring in. Finally we put our foot down and limited customization. Did we lose some business? Sure. But in the grand scheme of things, we were able to build our company knowing what we could do for our customers to stay in business.
When clients ask you to spend more on them than you can afford, take a stand and say no. If they have a problem with that, it's time to walk away.
3. They Have Unrealistic Expectations
The worst kinds of customers are the ones who expect your solution to solve all their problems. If this customer purchases your shirt, he expects to become one of the most attractive people in the world. When certain customers buy your software, they freak out when they discover a single bug. These clients will cause you to rip your hair out.
Great buyers are the ones who work with you, not against you. If something is wrong with your product or service, apologize and fix it immediately. Don't take the blame if your customer expects you to do more than your company promises. In most cases, you need your clients to put in effort to make your product a success for themselves. If they're expecting you to solve all their problems, they're not going to be happy customers no matter what you do.