An old business adage states that you should fire your worst customers: The ones that aren't profitable, the ones that take up too much time for too little return, the ones that treat your employees poorly.
Sometimes that's smart advice... but wouldn't it be better to know how to avoid doing business with them in the first place?
The following is from Jeff Jahn, a serial entrepreneur, speaker, and the CEO & (self-described) Chief Nerd of DynamiX, a website development company that has won over 800 awards in the last three years alone.
Is money the key to happiness, in business and in life. Having money is much better than not having it, but the pursuit needs to be carefully weighted against other goals.
For example, what's the point of making $500,000 a year if your family leaves you? Isn't the money meant to support you and your family so you have a better life? As soon as we lose sight of the reasons behind the goals we create, we lose ourselves... and eventually become empty machines, mindlessly pushing against a wall to accomplish a meaningless goal.
At DynamiX, money is certainly on the list. Profitability is one of the top five of priorities for our business. If it wasn't, we wouldn't have lasted twelve years in an incredibly competitive industry where last month's best technology may not pass muster today.
But we start by looking at what will enhance our team's quality of life, using money as the final qualifier.
That approach definitely applies to how we decide whether a client is a good fit for our business. Here's how we make that decision.
1. Do we like the client or team on a personal level?
This may seem like an odd question, but it's the most important one to start with. Why work with someone you don't like, especially if it may turn out to be for years?
If they don't respect us, or we can't find ourselves aligned personally with the person or team that we will work with, it's best to let them find a place that is more closely aligned.
2. Do we (and other people) like the company and its products or services?
Then we look carefully at what the company offers.
Do they get great reviews, or are they floundering? How do they respond to customer feedback? Does what they offer truly help others?
If we don't believe in their company, we can't put our heart and soul towards helping them succeed.
3. Can we help them move forward in a significant way?
The phrasing I used is intentional. A project where we can have a moderate impact is not likely to be one that we will take on, unless there is an opportunity to have more impact down the road.
Life is short... and it's way too short to spend time working on something where you can't make a significant impact.
4. Does the budget allow for success?
Last, but not least, we come to budget. If everything else aligns, but the client does not have the budget necessary to ensure a successful outcome, we we need to consider what makes the most sense for their business.
It could be that a crawl, walk, run strategy would fit if cashflow is the issue. Or it may be that the timing just isn't right -- at least not today.
When all else aligns but the budget does not allow us to work together, we regularly migrate to becoming a gratis advisor. Some of our best customers today spent months or years being coached by our team before they were able to work with us.
That was definitely time well spent.
The four points above are how we qualify business. Yours may differ. But chances are you haven't yet taken the time to put your criteria down on paper -- doing so will help tremendously in clarifying when you are heading towards a great relationship... or towards pain and suffering.
Once you have your criteria defined, the next step is to review all of your current customers through these filters. How many of your best clients check off all the boxes? How many of the ones that keep you up at night fail one or all of your points?
Knowing this will make it much easier to adjust your client base, helping the "less than great" fits to find a new home... while providing better attention and care to your best customers.