Everybody (except perhaps sales people) know that some customers are just bad. They're difficult; they want special treatment; they expect a level of support far in excess of what they paid. They're like my father-in-law who wants Nordstrom support at a Wal-Mart price. Jim Anderson explores this situation in his article Tough Times Call For You To Fire Your Customers. He writes:
Dr. Larry Selden of Columbia University has written the book on good customers and bad customers (Angel Customers and Demon Customers: Discover Which is Which and Turbo-Charge Your Stock). What his research has found is that the bottom 20% of customers can drain your product’s profits by 80% while the top 20% can generate 150% of your product’s profit.
Wow! 150%!! Yeesh, that's some real difference. A PC maker told me that their profit margin only covers a few phone calls. My dentist "fires" bad customers periodically: those who frequently miss appointments without canceling and those don't pay their bills.
Can you afford bad customers! Read the article Tough Times Call For You To Fire Your Customers to help find and destroy bad customers.
