Bad Customers Will Cost Your Business. Here’s How To Find The Good Ones.

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When it comes to customers, a lot of businesses are pretty indiscriminate about who they sell to. After all, there are no bad customers, right? At first glance, the formula is very simple: Isn’t it worth your time and resources to sell to anyone who is willing to buy? What kind of business do you run if you’re unwilling to take any customer who comes along?

An unsuccessful business, in most cases.

There are “right” and “wrong” customers.

Let’s look at the wrong ones first. No matter how attractive they look on paper, they’re a wrong fit for your organization. They demand a lot of your attention, they frequently complain about some aspect of your product or services, and they rarely pay their bills on time. By selling to them, you end up either leaving money on the table or damaging your profit margins. These customers are the ones who actually cost you money.

Signs of customers worth keeping:

In addition to being the opposite of what’s described above, these customers are the most deserving of your organization’s time and resources. They’re a pleasure to work with, they pay promptly and they truly value your product or service.

  • They come back for more. Clearly, a “repeat customer” is ideal. The ROI you generate from them is steady, even highly profitable, and – while it’s never OK to neglect any customers – your sales and marketing expenses aren’t nearly as high as with other customers.
  • They want your newest and highest-quality offerings. These loyal customers know your product is reliable and well-made; that’s why they’re willing to pay more when you roll out an updated version or some completely new product.
  • They’re great at word-of-mouth.  Enthusiastic customers love to share their positive buying experiences with family and friends – especially these days, in the era of Twitter, Facebook and Yelp. In addition to being great customers, think of them as unpaid “brand ambassadors” who can be relied upon to speak highly of your business and refer others to you as well.

Identifying Bad Customers

Generally speaking, bad customers are rare and easy to spot early on. Though it may run counter to your best entrepreneurial instincts, it’s better to let them go and continue to focus your resources on the good customers who keep your business growing.

Catapult Groups members are CEOs and business owners from all over the Las Vegas Valley who know how to choose the right customers. They benefit from high-level executive coaching and peer group advisory insights. Find out how membership in Catapult Groups can help grow your business.


Brad Mishlove