Fire Bad Clients?

Written by Steve Waterhouse


Do you know what makes a good customer for your company? I'll bet you do. You know whether your company is better withrepparttar Fortune 500 orrepparttar 139437 Inc. 500. You know what product lines your operations service best and whererepparttar 139438 quality isrepparttar 139439 highest. You know what industries are willing to pay a premium for your level of customer care. You probably even know which customers are likely to have a long and profitable relationship with you and which are just looking forrepparttar 139440 lowest bidder for this quarter's supplies.

Onrepparttar 139441 other hand, you know how to identify bad customers, too. The poor fits,repparttar 139442 bad credit risks, andrepparttar 139443 demanding QA departments. The ones that ask for expensive prototypes with little probability of a significant purchase. Unfortunately, we book these either because they are easy sales or because we don't have enough good business ready to close. As a result, we waste valuable personal time and company resources on clients that will never show a significant return onrepparttar 139444 investment.

Open up your Daytimer? right now and identify three clients that you know, in your heart of hearts, are bad fits for your company. Take this list to your sales manager and operations director and see if they agree. Now comesrepparttar 139445 hard part. Firerepparttar 139446 bad clients!

I was facilitating a discussion at one of my clients last week when this very issue came up. It became clear that too many scarce engineering resources were being spent on projects that would never pay backrepparttar 139447 investment. As we outlined a typical 'bad client',repparttar 139448 room erupted in a chorus of "I know which client that is!" We all agreed that this project had to be ended forrepparttar 139449 good ofrepparttar 139450 company and, in fact, forrepparttar 139451 good ofrepparttar 139452 client who would eventually be under-served. I asked, "Who's going to callrepparttar 139453 client and tell themrepparttar 139454 bad news?" Without hesitationrepparttar 139455 most senior representative inrepparttar 139456 room raised his hand. Without one complaint Isaac said, "It's my client. I'll call them."

I'll take it

Written by Steve Waterhouse


Cutting prices can lose business ďIf you can do it for $12, you can haverepparttar business.Ē With his next three words, Bill lost thousands of dollars of business. He said, ďIíll take it!Ē

Too many sales people focus on price and forget about value. Price is simply what you charge. Value isrepparttar 139413 sum total of all ofrepparttar 139414 positive effects thatrepparttar 139415 product or service has onrepparttar 139416 buyerís business. In most cases, your offering has many benefits forrepparttar 139417 customer. Each of those has a corresponding value that adds torepparttar 139418 equation. Business customers buy because they believe that they will get value that is significantly larger thanrepparttar 139419 cost. In fact, most buyers are unaware of many ofrepparttar 139420 benefits of their purchases and therefore underestimaterepparttar 139421 value they receive.

Every price is too high without an appreciation of value.

If that is true, so is this:

Every pricerepparttar 139422 customer offers, before they understandrepparttar 139423 value, is too low!

Could that be why you lose proposals that simply respond to RFPís? Mayberepparttar 139424 customer canít find your value in that sterilized document?

Could that be why you lose when you respond torepparttar 139425 caller who says, ďI just need a price?Ē Maybe they think you are just like everyone else. After all, you did not bother to tell them any differently.

Hey, we all reject stuff we donít understand.

How many times have you seen someone handing out free stuff onrepparttar 139426 street or inrepparttar 139427 mall and simply passed them buy. Itís FREE and you wonít take it! You donít seerepparttar 139428 value.

To increase our chances of makingrepparttar 139429 sale, we must do three things to ensure that we have maximized value inrepparttar 139430 customerís mind:

1. Understand their business

You must understand your customerís business well enough to explain to them how your offering will improve their bottom line. This means asking more questions and doing more research before making your proposal. The good news is that once you understand one company in a given industry, most ofrepparttar 139431 others will have similar circumstances.

Example:

A distributor of Swiss watches was trying to get a container load to their US jewelers in time forrepparttar 139432 critical pre-Christmas buying season. She was shopping for shippers and two responded. One offered a price that was $9,000 and assuredrepparttar 139433 shipper that they could get them there on time. They had years of experience and many testimonials that showed that they had done it before. The second shipper cutrepparttar 139434 price in half and guaranteed that ifrepparttar 139435 shipment was late, they would rebate 100% ofrepparttar 139436 fee.

Which shipper wonrepparttar 139437 business?

The first one.

They knew that a container of Swiss watches holds 5,000 watches with a retail price of $3,000 each or 15 million dollars. Ifrepparttar 139438 container arrive late,repparttar 139439 watches will have to be sold at an after Christmas discount. Thatís a loss of $1.5 million! Clearlyrepparttar 139440 distributor would care more aboutrepparttar 139441 reliability of company A thanrepparttar 139442 potential $4,500 rebate from company B.

2. Maximize your value

If is often true that different people inrepparttar 139443 buying organization will see different value in your offering. Inrepparttar 139444 example above,repparttar 139445 person onrepparttar 139446 loading dock might likerepparttar 139447 lower price. Butrepparttar 139448 product manager,repparttar 139449 CEO and others will appreciaterepparttar 139450 value of reliable service.

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