Would You Fire This Customer?
Have you ever had to fire a customer? I know I have. Read on to see my suggestions on when and if you should give up on a promotional products account. Here's a letter from a promotional products distributor that best illustrates this not-too-uncommon dilemma:
"I have an immediate question and something that has given me sleepless nights. I'm into keeping all my customers happy, just like you suggest. But, I'm contemplating firing a customer. The problem is, in the past they've sent in a lot of business. As a company, their revenue is large, but in the last few months of working with them, they have not been as profitable as we would like them to be. They have become very difficult and irrational when I try to educate them on this industry. I believe they may be shopping my ideas and only looking for the lowest price. Do I fire this customer, or continue sleepless nights or devoting my time to an unhappy group of people?"
First, try communicating with them about what's going on. An honest discussion about your concerns may reveal some issues you may not be aware of. Next, use the questions below to evaluate not just them, but all your promotional products accounts:
- Are they profitable? On average can you make at least a 35% gross profit margin or more on the orders that you sell to them?
- Do they accept the price you give them or are they always haggling?
- Do they pay in a timely fashion—30 days or less?
- Do they respect your ideas and your input without "shopping it?"
- Do you enjoy working with them?
- Do they have the ability to give you larger orders and repeat business?
- Are they part of a growth industry?
- Can they be a source of referral business for you?
If you answered yes to most of the above, it sounds like you have a good account. If not, evaluate your relationship. As a promotional products consultant, your good health and happiness are directly linked to your sales success. Think about what this customer is costing you in terms of time, money and aggravation, and then I am sure you'll make the right decision.