Since it’s the holiday season and we’re in a giving mood, we want to suggest you give a present to your competitors. Give your biggest competitor a strategic account. As author Jeffrey Fox states, “not all customers are good customers. A customer that costs more to acquire, more to support, to maintain, to service than the revenues generated is not a good customer.” Give your competition a bad customer!

Signs of a Non-Profitable Customer

Fox defines a strategic customer as a company that reduces profits rather than adds to profits. Strategic customers may be big name companies that have mass market appeal and brand awareness. Building product manufacturers often create products from multiple components from multiple suppliers. Sometimes these suppliers are great customers and other times not so much. We will review signs of a non-profitable customer that can relate to suppliers, contractors, and other design professionals/trades.

• The customer always demands bargain-basement prices
• The architect, contractor, or owner doesn’t appreciate your value proposition
• The customer treats your building product as a commodity
• The customer requires an inordinate amount of time for customer support
• The customer constantly argues over billing and is often late paying invoices
• The client causes your team major headaches and consumes too many resources
• The customer expects first-class service while paying penny-pinching prices
• The client asks a million questions but refuses to use resources such as your free AIA continuing education course, guide specifications, or technical manual.

Firing a Non-Profitable Customer

Building product manufacturers should never leave a customer on bad terms. You may have increased prices for your products and the customer yells and screams about the increased cost. If they refuse to pay the new price, kindly point them to a similar product and wish them good luck.

Quit spending hours on high-maintenance, low-revenue clients that drain joy, passion, and excitement from your team. Customers are the life-blood of a company. Clients need to be treated with respect and care. However, if you have customers that meet several of the conditions above, your team might consider dropping these companies. Have you ever fired a customer? What challenges do you face in the marketplace?