Avoid Problem Customers And Attract Profitable Ones

There are some in business who believe there is no such thing as a bad paying customer. Often times this is the same group that believe there is no such thing as bad publicity. Nothing could be further from the truth for any business owner looking to build a viable growing business. You need to choose your own customers from the pool of ones who wish to buy from your business. That's right, you need to be in control of choosing your customers!

Why would you say that? It would seem that a business owner should accept the business of anyone who is willing to pay for it. However, this is not the case, in my humble opinion. Many approaches to increasing cash flow are short-sighted, and that includes not having any standards about who you will accept as customers. It is generally agreed that manipulating people into buying your goods and services is a poor long-term strategy. However, many business owners adopt the approach that they cannot afford to turn down any potential paying customer. As tempting as it may be to accept all the business that comes your way when you are starting out and cash flow is low, the long-term consequences to your business can be so severe that they more than cancel the beneficial effect of the extra revenue.

You may wonder if it is really a good idea for your company to be selective about whom they do business with. There are some instances where it is definitely a plus to choose your customers quickly. As an example, there is a group of potential customers who will try to purchase your services even when they know that they can't afford them. If you allow them to do so, you may end up having to spend a great deal of time and expense on trying to collect the money owed your company, even having to turn the customer over to a collection agency. This is hardly good for a business. Yet there are many businesses who will take just such risk. The banking industry is an excellent example of what can happen when dealing with customers who can't afford their purchases. The 2007-2008 downturn in the economy was caused largely by the banking industry, which issued mortgages to customers who could not afford them.

Another group of customers who many business owners will avoid are those that are seen as "problem" customers. You know the ones. They complain about everyone and everything in their lives. Nothing you can do will meet their unrealistic expectations of what you (and the rest of the world) owe them. Often times this type of customer can be identified by their angry demeanor and complaints about other competitors in your industry. If you spot them early it is best to pass them by and let someone else deal with the headaches. While they may be well able to pay you, working with such people is likely to be a nightmare not worth experiencing for most business owners. The art here is identifying them as early as possible so you can make a decision. The hard part is knowing how much of their complaints about your competitors may be actually accurate and presents an opportunity for you. Being aware of the reputations of others in your business can help greatly in this regard.

The customer types previously mentioned are quite often easily overlooked. But there also is another group of people you should not deal with. These are the people for who your products and services have no relevance. Many companies feel that it is the customer's job to decide what they are going to purchase and that the service or goods provider needs to sell as much as they can to the prospective buyer. Doing business in this manner is short-sighted and can stunt business growth badly. If you choose to sell something to a customer who winds up disappointed in the end, they will often blame you as a result. It is better business to simply state up front that your services do not meet their particular needs and forgo a sale as a result. By clearly describing your product or service in unambiguous terms with out any hype, you can avoid making a poor sale. Tell the customer clearly wheat you provide and give them the information that they need to choose for themselves whether to buy your product or not. Talk about their needs with them as well and determine if what they think they want actually meshes with your product. You may know of another product or service that would better meet their needs, if at all. If your business cannot meet their goals, be sure to refer them to someone who can. This approach often results in future sales when the customer later returns to you when what they need is better aligned with your products or services.