Good Clients and Bad Clients: How to Identify the Bad

There’s a pretty accurate idea that 20% of your clients are responsible for 80% of your problems. I’ve also heard that 20% of your clients are responsible for 80% of your profits. We’ve found both—plus or minus 10%–to be true. Some days it feels like 1% of our clients are responsible for 99% of our problems.

As a rational business owner, it makes sense to identify the top performers regarding problems and the bottom performers regarding profits. Interestingly, we find a handful of companies that tend to be on both lists: a pain to deal with not very profitable.

Here are the ways to end up on both lists: troublesome and unprofitableWatch Full Movie Online Streaming Online and Download

Ask for prices on projects that don’t allow us to make a profit

The old “I can get this on the internet for $25” is a sure-fire way to make us say, “go ahead viagra france acheter.” We know, and the customer knows that buying something online requires shipping costs, costs to set up an account, shipping time and uncertainty about the quality of the product. So, when a customer tries this ill-advised bargaining strategy, he is really just trying to get a low price, a price much lower than we can reasonably offer. Simply put: if we can’t make a fair profit on projects, we don’t want them.

Most of the time we are very accommodating to clients who have a few no margin or very low margin projects, but when we have a client who only does very small projects (like $10 print jobs), we know that the costs of administering the account exceed what we make from the client.

In very blunt terms: if we can’t make any money from you, you are, by necessity, a low priority for us.

Excessive account maintenance cost / Billing issues

There is nothing more exasperating than dealing with clients who view paying invoices as “when we get around to it” instead of “the work is done; here is your money”. In the end, everyone pays, but how much hassle we have to go through to send multiple notices and the stress we have to maintain adequately cash flow certainly influences how much we want to work with a client in the future.

When we have two projects to work on, we always give priority to the client with a good payment history. This makes sense, of course, because we’d rather finish projects with a certainty of quick payment than a project where we have uncertainty.

If you own a business that buys from local suppliers, the best thing you can do is settle invoices quickly. Your suppliers, believe me, keep track of these things. If it comes time to ask for a favor or a project done quickly, the goodwill you establish through paying your suppliers promptly will ensure some reciprocity.

A good rule is never to ask for a project or product for which you are unable to make immediate payment when completed. If you need financing, go to a bank.

everything has a cost

Excessive Price Quotes

Our time is part of what we sell. It’s also always in very short supply. Every email or call you make takes some of our time. Of course, we don’t mind answering questions about projects and discussing options. That said, “estimate fishing,” where a business sends a low-level employee through the Internet to find the lowest price on a small project, can be great time waste for businesses.

A good rule of thumb is that if your project is under $100, get one, possibly two, price quotes and pick one. If you are asking for more than three price quotes for small projects, you are fishing and being disrespectful of the time of the people you are asking. If you are trying to save a few dollars, consider the time you are wasting calling around: to spend $50 in employee time to save $10 doesn’t make much sense.

Always try to look at what you are asking of a business from the businesses’ point of view. Are you spending more than you could be saving, considering your time and the time of the people that need to respond to your inquiries?

In the end, our goal as a business is to stay in business and to be here to serve our clients in the future. We also have a goal of having resources available to support good in the community. To do this, we have to make a fair profit on what we do.

 Kona Impact | 329-6077