Do we really drop customers this quickly?

[16k_zx81]

I'm not trying to take things out of context, I am just removing the unecessary stuff so we can focus on the main points. You are trying to school everyone on how to keep customers they don't want because you think that if were doing our jobs right we would magically start making money off of them. In one post you agree that dumping a problem customer is a good idea but then you say something like if we tried to do better or worked the customer we could turn things around. I'm not sure if the purpose of your thread was really to ask questions or to preach.

Keep it nice, guys. On this point its fine to just agree to differ.

 

[papuchazo]

Since I'm the OP of the thread the OP mentions here, I'll share my two cents. I've learned the hard way that when a customer is trying to nickel and dime me right off the bat it is bad news.

As I posted, I gave them the option of ordering that themselves if they felt so inclined and I refused, in a nice way, to endorse another product. That will just end up bad. The cheap purchase breaks down and suddenly i'm the jack ass that told them to buy junk.

To keep with the mechanic metaphor, if my mechanic quotes me $200 for a part and I find it for $180 online, i'm going to go with my mechanic. Only tire kickers would buck at such insignificance. Again, from my personal experience.

Tl;Dr
I stuck to my guns while leaving an opening for future services.

 

[maclaptech]

When you start to get more customers than you can handle (and I can handle a lot of them) you will also start dropping the ones you don't want to waste time with.

BTW- Every "customer" does not automatically mean more money.

I couldn't agree more with this...

 

[maclaptech]

I know that dropping a client is by far the exception rather than the rule (how could you be in business otherwise?), but I am curious, how many here have actually done so.

So what is the actual line you draw on dropping a customer. Do you have that quantified in any way?

Always remember the 80/20 rule. 80% of your profit come from 20% of your clients. Don't waste time on ones that waste your precious time and ruin your day. Give your best service to the 20% that makes you the money.

I also believe that 80% of your headache comes from 20% of your problem child clients. Dropping them is always a good choice.

We are not in charity business.

 

[PCX]

First, I just want to say that this is a great topic to discuss.

I choose not to take customers more than I drop them. When you can just tell that the customer is a never happy one, I don't take them. That keeps from having to drop a whole bunch of them.

As Boston stated, I weed out more bad customers from the get go before dropping a customer becomes an issue. There are so many red flags to look out for, that you should be able to do this. In fact, I rarely ever have to drop a customer.

Also, keeping it in context, to drop a customer, you would have had to deal with them as a customer to begin with.

I think you may be overstating the readyness of the recommendations.

Perhaps this is because its something people suggest, but bear in mind that theres a context here - someone has been troubled enough by a customer to post on a public Forum asking for help to deal with a problem the customer is causing. In other words, the impetus to post usually indicates there's a significant issue there to start with.

Exactly. I know you read a lot of posts that suggest that someone should drop their customer, but its because most of us do not post anything too trivial about our customers, usually its a pretty big deal.

When you start to get more customers than you can handle (and I can handle a lot of them) you will also start dropping the ones you don't want to waste time with.

BTW- Every "customer" does not automatically mean more money.

Absolutely. Obviously you are going to deal with the occasional idiot or time waster, thats just a part of business, but there comes a certain point in your business (especially when you are doing well), that you will need to drop the less profitable more painful customers and concentrate on the customers that make you money with less headache.


===========================


My overall opinion in the matter is that it will happen and that it should happen from time to time. If you are not cutting off the dead weight (those who cause you pain or cause you to profit less), then you are doing something wrong. As Jimbo stated, you should eventually get to the point to where you have so much business that you can pick and choose your customers. If you are not there in 20 years, then maybe your doing something wrong.

That said, some of us have less patience than others and some of us need the work more than others. I personally turn away a lot of business simply because a customer wants me to do something the wrong way or they want me to cut corners in order to drop to the price. I also turn away customers who want to argue prices with me. Personally, I do not need those customers. I have plenty of good customers who are willing to pay what we charge and want the job done right the first time.

 

[lsi]

there used to be a lot of competition in my area and they were mostly guys that were cherry-picking the "good" customers whereas I take it as a challenge to turn every customer into a good customer. Does it always work? Of course not. But when I get too busy I hire another tech. Those other shops btw - almost all of them are gone. When times are good I suppose you can be picky. But you may never know what you're missing out on. I have one customer that's been shopping me for 2 whole years but was never really ready to change their IT. while discussing another topic someone on this forum suggested they were not a good customer and they would avoid them because of their perceived needs. This week they decided they were ready and also brought over 2 referrals. Altogether I'm looking at another $1500/month in managed services contracts and possibly more. Sometimes it pays to be patient.

By the way, I don't lose a whole bunch of money on "bad" customers. Some money is always more money than no money. Just because you turn away a bad customer doesn't mean you magically make money because you theoretically bill so much an hour. If you're so busy that taking a customer costs you money because you have to turn away a better customer, then you're working too hard. Hire more techs and build a business. If you lose money when you take a day off, you've built yourself a job instead of a business.

 

[mkeathley]

I think dropping the external HDD guy is a good idea. Why? Experience.

My experience shows if someone is willing to buy it somewhere else over a $20 difference, then they don't trust me. Sometimes that can be fixed. But often its not. I am not and will never compete on price. I've played that game. I used to work for $20/hr and went broke.

I understand the point of well if your so busy you can afford to drop customers just hire another tech. But again, if it cost me hassle, or my tech, to make an average of $20./hr because I deal with problem customers. versus making $75-100/hr only dealing with ideal customers. I'll go with the ideal customers. Because I am building a business and I don;t want the hassle, if I did I'd get a real job.

Now I'm not saying I drop everyone who is an issue. For instance I had a senior citizen who argued with my guys constantly about when they did or did not communicate with her. I knew when they did, they kept good notes. But she was confused. My guys were ready to drop her. She was waay in the wrong, and quite mean about it. She even cursed at me. I quickly shut her down told her I would not speak like that and demanded respect, respectfully in opposition to her attitude. Had she not immediately given it, I would have escorted her from he premises. However, she did give it and we were able to resolve her misunderstanding.

As for how many I drop? I would say 2-3 a month.

 

['putertutor]

First, I just want to say that this is a great topic to discuss.

Aww, shucks.

I personally turn away a lot of business simply because a customer wants me to do something the wrong way or they want me to cut corners in order to drop to the price. I also turn away customers who want to argue prices with me. Personally, I do not need those customers. I have plenty of good customers who are willing to pay what we charge and want the job done right the first time.

Your point about having to work with a customer in order to be able to drop of fire them is dead on. This is not the same as losing a single sale because of pricing. I'm sure we have all had a call asking about pricing that does not result in a sale. This is par for the course in any business and is not the issue I was trying to raise here.

If by 'argue prices' you literally mean argue with you and expect you to justify your prices, then I also agree with you to a certain extent. But I honestly don't have an issue having this discussion with customers, and occasionally providing a discount. I'm not talking about free, or even 50% off. I'm talking about a 5-10% discount. Which is about what I might offer in an ad designed to attract new customers, so no real loss there.

 

['putertutor]

But you may never know what you're missing out on. I have one customer that's been shopping me for 2 whole years but was never really ready to change their IT. while discussing another topic someone on this forum suggested they were not a good customer and they would avoid them because of their perceived needs. This week they decided they were ready and also brought over 2 referrals. Altogether I'm looking at another $1500/month in managed services contracts and possibly more. Sometimes it pays to be patient.

Just because you turn away a bad customer doesn't mean you magically make money because you theoretically bill so much an hour. If you're so busy that taking a customer costs you money because you have to turn away a better customer, then you're working too hard. Hire more techs and build a business. If you lose money when you take a day off, you've built yourself a job instead of a business.

^^^^ Well said.
Filler

 

[angry_geek]

I think some are misunderstanding here. I'm not advocating firing or ignoring every customer that calls or emails with a question. My crew is working non-stop from the time they clock in til they clock out. What some are suggesting here is that I pay them to stop what they're doing, or hire someone else, to spend time coddling and coaching non-paying "customers" on the off chance that person may refer someone big to us. At what point, do you suggest, enough is enough? We are cordial to everyone. However, my crew is trained to spot leeches, and they know how to deal with them with tact and efficiency. There are also those we sometimes have to "fire". This happens to a few per year. At some point in business, if you get to that point, you can pick your customers, and you'll see what the rest of us are talking about.

 

[othersteve]

I drop customers more often than I originally thought I would, but it's still pretty rare. The biggest reasons I often choose not to do business with a customer (or provoke them to choose not to do business with me):

1. I never, ever, ever negotiate price. If they don't like it, they can find another tech and hope for the best.
2. I am blunt and to the point. I never beat around the bush as it only complicates matters. A small percentage of people can't handle this.
3. I won't buy crappy computers for people. Since I literally run my business on satisfaction, the last thing I need is someone upset about a PC I helped them purchase.
4. I won't do anything of questionable ethics. All software is always licensed, and I tolerate no cracks, keygens, etc. They are removed when my work is performed and the customer agrees to this beforehand.

There are people who don't want to go any further once they encounter one of these problems, though they are very rare I find.

The only other (more common) reason I ever turn down business is if it's something I am not interested in attempting or just simply can't handle. For instance, large companies with server/client infrastructure that are looking for a new tech to handle everything, complete laptop disassemblies, etc.

So far this strategy has been working fantastically for me however. I continue to grow pretty rapidly and will be doing something like > $60K this year. It is my first year officially doing this full-time as my only job!

 

[YeOldeStonecat]

There are only so many hours in the day. Back in my 20's and 30's....I didn't mind working insane crazy hours and coming home late at night.

But I'm on the upper 1/2 of 40 nowsmall...I enjoy coming home at 5...cooking dinner for the family, spending time with them.

I'm also sorta "full" as far as my plate. Been doing this a long time, have managed to build up a pretty good portfolio of good clients..a couple of which occupy the majority of my time.

I prefer to do "planned" work...upgrades, server installs/migrations, workstation deployments, stuff that I have scheduled and planned.

So when some smaller or newer client is "needy" or "annoying" and constantly creating emergencies that pull me away from doing my planned work....I do get fed up with it....because it pulls me away from my intended work at my primary clients.

Or some client that is just never happy with what you do for them, or what you set up for them, no matter how good it actually is. There is one particular client that falls into this category that I'm getting ready to tell them "Look, I just can't help you any more.....I'll give you all the notes you need to hand to a new computer guy so he can take over.".

 

[arb1]

In some cases...

I just wanted to post on this topic, because it's something that I think about daily.

Recently, I've been dropping customers left and right, and mainly the one-off customers that contact me every 3-6 months. I was scared at first that I would lose money, but in fact it was quite the opposite. I started focusing primarily on my best customers, giving them more time and attention (while simultaneously raising rates with them). I have actually made more money doing this, while being less stressed out about every little call coming in...there is simply less management and administrative overhead without those one-offs.

I know everyone's model might be different, but I'm just sharing what has worked for me...

 

['putertutor]

My overall opinion in the matter is that it will happen and that it should happen from time to time. If you are not cutting off the dead weight (those who cause you pain or cause you to profit less), then you are doing something wrong. As Jimbo stated, you should eventually get to the point to where you have so much business that you can pick and choose your customers. If you are not there in 20 years, then maybe your doing something wrong.

Just to clarify, what I said was that I have 20 years experience running successful businesses (not just this one). I only officially opened my computer repair business last year. It is profitable at this point, but not enough so that I can make the leap to it being my sole source of income.

As far as dropping a customer goes, I see the point of getting to pick whom you deal with. My point was that not every customer that pushes back or asks for a better price should be lumped into that category, which some of the recent posts seemed to be pointing towards. I have several customers who have haggled price or questioned my timeline. Still, they pay my price (or on occasion, my sale price) and other than having to be taught how to accept 'No' for an answer, they are good and profitable customers.

 

[PCX]

Just to clarify, what I said was that I have 20 years experience running successful businesses (not just this one). I only officially opened my computer repair business last year. It is profitable at this point, but not enough so that I can make the leap to it being my sole source of income.

As far as dropping a customer goes, I see the point of getting to pick whom you deal with. My point was that not every customer that pushes back or asks for a better price should be lumped into that category, which some of the recent posts seemed to be pointing towards. I have several customers who have haggled price or questioned my timeline. Still, they pay my price (or on occasion, my sale price) and other than having to be taught how to accept 'No' for an answer, they are good and profitable customers.

I absolutely agree. No argument here.

 

[nightkingdoms]

I tend to pretty much follow this list I created last year: When You Should Fire A Client

In total, I've been doing this business for almost a decade and a half already and I've come across many, many clients in that time. I'm also a pretty quick at establishing great rapport with people which can be a good thing and a bad thing. I've learned in that time -- over the wide variety of compute-related things I do -- that there are certain personality characteristics and actions made by a client that can be problematic.

I'm not talking about just firing people out right before they open their mouth to talk to you and pointing to a sign that says "NO A$*HOLES" because you can "spot them a mile away." (If only, right? lol) But there are certain keywords and actions that clients make that I have learned over the years as being an issue that can cost you time and money in the long run that will hurt your business. I'm pretty good at spotting these people and I soon phase them out of my business just before it can have an impact.

My biggest problem client is #1, never satisfied. Now, granted that article was mainly directed at freelancers in the web design and online programming arena, it pretty much covers it. For us, problem client #1 is the needy one. You go over there, fix their computer, then get these little "quick questions" or "could you take a look at this", etc. over and over again. Now as I said, I gain rapport very quickly and in this case, it's a bad thing.

My best shield for this one actually came recently from a reply CallThatGirl posted about "after care plans". I thought it was awesome! Make it clear that once you're done with a service call that if they need something that isn't warranty related that they can get an after care plan which consists of a block of time for things like quick questions and little things like that. It sets the expectation that there is no free support and gives you another opportunity for getting more money while not getting the financial impact of them being a problem. Win/win. (Again, thanks CallThatGirl, that was the only problem client I had a problem with firing and you gave me an awesome solution!)

 

[callthatgirl]

I'm glad that worked out so well for you! We do sell those, but it's not the most pressing thing sometimes for the store techs to upsell. Our remote techs sell more of them because the call backs are usually remote jobs.

New tip

 

[nightkingdoms]

Well I'm the only one so I nip it in the bud right there, it was an awesome tip. My business partner has a client that emails him about things all the time. Told him about your idea, doesn't contact as much now and knows it's not free. Even got her on a plan now.

 

[Carl]

Its rare that I fire a client - off the cuff I can only think of 3 or 4 since the days of DOS.
But I have gotten picky about taking a new client on. (I'm not trying to build an empire, and don't have a store to support).

I had a call from a lady who was fired by her tech.
(Never met the man - but I gotta give him credit, he did a great job. Not words I say very often, or lightly - it was a pleasure to work on those units)

He fired her because she told him that he reminded her of "Sheldon" from The Big Bang Theory!!!

Because of this - I got her as a client, Her Mother is now a client, and her Brothers business is now a client.
In the past 2 weeks I made $300 from her and her mother, and $750 from her brother...

For $500 a week ya can call me Sheldon...

 

[PCX]

Just delt with one today.

Scenario: Broken iPod. Screen is supposidly the broken (no cracks) and does not display anything. Well any time we cannot test the functionality of the iPod (because we either cannot turn it on or it wont display) we charge a diagnostic fee.

We explain to the customer how much it would cost for the diagnostic. Immediately the customer was like "Well I am not going to pay that" and I explained that this is not an additional fee, but that it would go towards the cost of repairs. Then they asked how much that would be and I gave them the price ($90). She was then like,

"well why would I pay that much for it when a new one is $200"

"Because it's less than half the price . . . ?"

Then she was like, "Well in New York, bla bla bla bla"

"Ma'am, we are not in New York"

"Well, I just think I can get it done cheaper somewhere else"

And don't even ask me why I did not cut her off at that point and send her on her way, because I do not know, but I simply explained to her that "You get what you pay for." Anyways, everything with her was up for debate, so eventually she just left on her own accord.

Fast Forward a couple hours later. We are slammed. We have about 4 different customers in the shop with only 3 technicians. When I finally get to her, I ask her if she would like to go forward with the repairs.

"Yes, but can you just replace the screen"

"Sure, but we will need to do a diagnostic first"

"Why?"

"Because if there is anything else wrong with the iPod and you choose not to repair it, then we are still going to get paid for our time."

"Well, I just want you to replace the screen. I do not want to pay for a diagnostic"

"Well, if you are not comfortable with how we do business, you will have to go somewhere else"

And she left. Thank God.