Develop Good Customers and Drop the Bad Customers

I had a trainer (who's name I forget) say that:

10% of customers are so good to us we consider them like friends. We make good money with these people and they are happy with the product and service. These people generate referrals and boost our self-esteem. If there is a problem they respond reasonably and help find a solution. This is a perfect win-win.

10% are so bad we want to kill them. They behave like Vikings and steal whatever they can in time and attention without ever returning value. This is an ugly lose-lose.

In the middle are the ordinary customers who are somewhere between the two extremes. These people are OK. Over time some will drift to the top or bottom 10%.

Imagine if you dropped the bottom 10% who are costing you more every moment they interact with you. There is a boost to profit straight away. Now imagine turning the top 10% into a top 20%.

A strategy for improving the top customers

Remember that over time customers will drift from one group to another. This you can use to advantage. Aim to develop some of the average customers into top customers.

When you bring in new customers, train them that your business values top customers and does not tolerate non-customers. Some will respond very well and immediately slot into the top category. Others will drift up a bit slower as they learn the benefits of a real win-win.

To achieve these aims you must take a very serious look at why you have a bottom 10% in the first place. What decisions have you made to allow these people in? Just like the witch and vampire in stories, the behaviors have to be invited across the threshold. So realize how and why you invited them and un-invite them. They must go.

Start to feed your customers with the kind of material that they find interesting. Don't worry about automated birthday cards and the like. No one feels special over formula marketing. What you need to do is feed your customers vast amounts of information and supporting material on your product and service. Make your product and service into part of a lifestyle and supply the supporting material.

3-Steps to Create Good Customers

Look closely at your beliefs and actions and offer the most honest products and service, without compromise or excuse.
Remove the non-customers and Vikings who seek only to destroy.
Develop a lifestyle approach to your product and service. Your business is part of your lifestyle and your products are part of the lifestyle of your customers.

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The extra bits below may help you with the steps

Sack the non-customer

I was talking to a friend with a service business about turning down bad customers. He didn't really get what I was saying. His view was that all customers were necessary and needed to be chased to the ends of the earth to be won over. This, view while understandable, was in effect part of a lie that was costing him money and life.

The lies were of scarcity and self-importance:

Scarcity - there aren't really enough customers to go around. Sure the world is in many ways limited but human potential is almost unlimited.
Self-importance - if your customer is more important then you are then you will do anything, including hurting yourself, to please them.

I said a little bit of chasing customers was ok but a lot of chasing was very bad as it devalued him. Best situation would be if he chased no one and customers chased him.

Some months later my friend stopped me to tell me I was right. He said, "That stuff about getting rid of customers who make you work too hard is right you know." My friend had found himself with a person who demanded he drive samples across town after work hours. The person never bought anything of value. Third time it happened my friend remembered what I had said and realized that this person wasn't a good business proposition at all.

My friend said no this vampire. He said to me that it was a challenge to do the first time but as soon as he did it he felt much better. He could go home to his family feeling free of the weight of the non-customer on his shoulders.

Commitment to a possibility

I used to use a testing question when I was selling cars. When someone asked me for a test drive I would ask:

"If we drive this car and you are happy with the the way the car drives, will we be able to look at doing business today?"

Look at the question carefully. It contains a series of "ifs". No one is irrevocably committed to anything. What I was asking was if we had grounds for a win-win. Genuine customers would immediately say 'yes, sure' and we'd be in that car fast for a nice long drive.

Non-customers would get all narky and try to claim a divine right to drive the car: everyone else offered a drive; if I wouldn't drive them I wasn't serious about selling a car; no-one could commit to buying a car without a drive... and on they went twisting in the wind. I would explain that I didn't want to take their time and mine if there was no possibility of doing business. I had other people I could see.

I sold well to those who said yes to the question and never to anyone who dodged or refused to answer. I didn't go on some test drives and I don't believe I ever lost a sale this way. My first boss supported me in this. A later boss didn't and I wasted a lot of time, made fewer sales and lower grosses for 2 reasons:

I could only see a set number of people in the day so every non-customer used time I could have been with a customer.
When I was forced to entertain non-customers and accept their evasions, lies and anger as acceptable then I became what is known as "head nicked". I'd go home stewing over being used and that made it hard for me to see life as positive and attract customers over non-customers.

It's all about iLife

Apple are a great example of incorporating product into lifestyle.

Apple don't just sell a few computers any more. Apple supply the wired life. They supply the music and movies to go in their iPod. The iPod and iPhone support the iMac product lifestyle. Apple also supply leading specialist software to support their hardware. If you want to use that software you have to buy a Mac. That isn't a problem because if you use that software you probably already have or want to have a Mac Pro. Apple get you so involved in living your life with their super useful gadgets that you not only become a customer but you become an advocate.