Cull Unprofitable Clients to Help Your Business Thrive
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An important part of being a savvy business owner is knowing which business connections are worth your time and energy. Unfortunately, in the rush to stay competitive and maintain strong connections to clients, many business owners don’t take the time to prune dead-end clients, which can cost them substantial amounts of time and money as a result. Or perhaps they know which clients are dead weight, but they can’t bring themselves to cut the cord for fear of creating an income drought.
It’s simple. If you have a "client" on your books who isn’t buying goods or services from you or hasn’t done so for a considerable length of time, then that person isn’t really much of a client and isn’t worth your time. Each time you place a call or try to chase down a client who has no intention of buying from you, you’re wasting time that could be spent cultivating more lucrative client relationships. You’re also decreasing productivity and preventing your business from reaching its full potential.
Here’s how to avoid that trap and liberate yourself from unprofitable clients.
Separate the Good from the Bad.
Stay on top of your client list to make sure you’re not wasting time following up on dead ends. Instead, you should be concentrating on leads that have a medium-to-high likelihood of resulting in a sale. Keep track of those clients that just aren’t buying anymore (or those prospects that no longer seem interested), so you can dump the dead weight and focus on helping your business flourish.
Deadheading clients is like snipping the dead petals off a flower before they drain nutrients from the rest of the plant. Why leave them to cause problems, when a quick snip can take care of it? Unprofitable clients not only waste your time, but they can also be psychologically draining for you and your staff, making you feel as if you’re chasing your tail when you should be getting ahead.
Use the Gentle Touch Solution.
You don’t want to risk offending past clients, so it’s best to phase them out gently and gradually. No need to tell them flat-out that you won’t be working with them anymore. With any luck, they won’t even notice that you’re no longer pursuing business with them. By using this gentle touch solution, you get the best of both worlds–you’re no longer spending time courting sales that just won’t happen, and you haven’t insulted contacts who might know others in your industry and spread bad word-of-mouth. The last thing you want is for deadheading to scare off other paying clients who think you’ve treated the inactive client unfairly.
It’s crucial to monitor your client list and constantly make sure you’re removing those who aren’t pulling their weight. Remember, it’s a two-way process: if you had an employee who cost you money, time, and morale, you’d fire them – why should it be any different for clients who aren’t giving you their best?