One of the most controversial, and most powerful, elements of The Pumpkin Plan is to let your bad clients go.
This is the step that gets the most resistance from business owners. It’s also the step that we get the most positive emails and feedback about. Go figure!
As Mike Michalowicz describes in The Pumpkin Plan, if you are growing a giant pumpkin, all of the little pumpkins, or worse, rotting pumpkins on the vine are just sucking nutrients from your giant pumpkin. If you leave them on the vine, and expend your nutrients and resources on trying to save them, your giant pumpkin will never grow to its full potential. It’s the same with your business. The rotten clients will take resources away from your awesome clients, making it impossible to grow to your full potential.
Know who your worst clients are.
In my post about how to Identify Your Top Clients and Unique Offering for Explosive Growth, I talked about the importance of knowing who your best clients are, and focusing your efforts on serving them better. But it is also really important to know who your worst clients are, so that you can get rid of them. Gasp. For many business owners this is an extremely scary prospect. After all, the goal is to have more customers, not less, right?
The answer is, not necessarily. Especially in businesses where you are working directly with customers, interacting with them, relying on their participation, the quality of your relationship with them is not only key to your happiness, its key to the results that you get for them. And its key to the energy that you have leftover for your other clients.
Do you have any customers that are so great that you feel like they make your day easier?
Perhaps you feel energized after doing business with them. And you almost feel guilty taking their money because they’re such a pleasure to work with, to the point where you secretly feel like you should be paying them instead of the other way around? Those are the clients that will help you grow your business.
But what about the cringe worthy customers? I’m talking about the ones who make you want to eat a pint of ice cream and then take a 3 hour nap after a 10 minute interaction with them. Those customers, no matter how much they are paying you, are draining the life and the energy from your business. They are costing you and your employees time, they are using a disproportionate share of your resources, and they are hurting your ability to serve your best clients to the fullest. They are stunting your growth and making your business less profitable.
Ironically, very often your biggest client may turn out to be your worst client.
Which of course makes it much harder psychologically to let them go. But after more than 5 years of working with clients to Pumpkin Plan their businesses, I have seen many companies let their worst and biggest client go, but because they have already figured out who their best clients are, they now have the time and space in their business to fill that void with better, more profitable clients.
To give you a more concrete example, one company we worked with was in a service based industry. They had a very large client (more than double the revenue of any other client) who was a scheduling nightmare. The client was constantly postponing and delaying work, which was impacting scheduling for other clients. When they got up the nerve to let that client go, they replaced them very quickly with other clients who fit their top client profile, their business became more efficient, they had fewer headaches so were able to do even better work, and as a result they became more profitable. Win!
Get rid of your bad clients without confrontation.
If you’re anything like me, you might hate confrontation, and the thought of having to tell clients that they’re fired is horrifying. But never fear, there are some easier ways to let your bad clients go. Very often, your worst clients might all be purchasing the same product or service. For example, in a previous post, Find Your Sweet Spot for Business Growth, I told you about how Steven Bousquet of American Landscape and Lawn Science identified that his worst clients mostly purchased his lowest priced package. So guess what he did. He eliminated that package, and most of those clients left on their own. This gave him the opportunity to focus on his best clients, and dramatically improve efficiency and profitability.
But what if you’re not a service based business, but rather a consumer based product company. Can you even control who purchases your product? To some degree, yes. Imagine your worst customers are constantly complaining and returning products, and your best customers almost never return anything. You can change your return policy to be less appealing to your worst customers. Or maybe you can identify a specific product that most of your worst customers purchase, and stop selling that product.
There’s a reason why we get emails all the time from business owners who have eliminated their worst clients and seen their companies thrive as a result. If you understand your underlying strategy, and have an action plan to replace those bad clients with great ones, you will be well on your way to growing your giant pumpkin!
Would you like help figuring out who YOUR best and worst clients are, and what to do next? Click here to Find a Strategist.
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