Jack Rabbit

[tiedeman]

I am worse than a jack rabbit with all of the jumping around that I do with my business. I mean, sure 90% of my accounts have alway stayed the same and I love doing them, yet about 5-10% of them I take them on first as a customer, but then realize after about a month that I absolutely hate doing the customer. I will give you three customers, that I just picked up about a month ago, but I am thinking about letting go, give me your opinion on the matter.

Customer 1: This has been a customer that I used to do lawn maintenance for them in the past. I dropped them in the past because of not only downsizing, but because of travel. It takes about 20 mins (one way) to get to this account from my other ones. It's a small account that is mowed bi-weekly, because they can't afford to have it done weekly, and I make $32 on it. It takes me about 35-40 mins to do (that is just the mowing, not the travel). Well, the traveling to get there is waste I feel since there are no other customers that I maintain there, except for one, which a once a month account (that will be explained in customer number 2), and the only reason that I took on this customer 1 is because customer 2 asked me to maintain his place once a month.

Customer 2: This is a once a month mowing account, basically just mowing weeds, hardly any growth at all and pure sand lot. They are a new customer, and is right next door to customer number one. If I cut customer 1, then I have to cut customer 2. They have paid on time for their first invoice, but it just seems like a waste to drive over there for a $30 job.

Customer 3: A new customer, that has lied to me repeatedly about paying her bill, even though I just received payment today, right on the due date. Sure she was on time for payment, but lied to me twice about when she "sent the check in the mail". It's a biweekly customer that is on a tight budget. The lawn isn't too bad, takes about 30-40 mins for $35. The travel isn't too bad, but everything else about the property looks like a dive. It basically makes me look bad

So these are the three customers that I plan on dropping tomorrow, what do you guys think?

[kc2006]

1&2 yea I'd get rid of them.

3...that's touchy because I have one of them, but they pay 2 days after the invoice is sent every time which makes it harder. I put together a price for bed renovations, weed/edge/prune shrubs/mulch, I even offered to let her pay a couple of payments just to show what I can do and maybe get more work in the neighborhood.

If your number 3 paid on time...I'd offer the same just to try and keep it, but since they don't pay on time I wouldn't chance doing 800 in work or however much and not get paid. That's still a tough one though, if you don't need the work, get rid of them.

[Steve]

My thought on customer #1 and #2 is if you can hand them off to another lco that is closer, it might be better for you than just dropping them.

You never know when that goodwill may come back your way in the form of jobs closer to you.

#3 If you really want to, then drop them. But I would say if they are making you money keep them. You never know when being in that area will help you get more accounts with people seeing your truck. It's like you need your line in the water to catch fish.

[Steve]

I have been thinking more about your customer #3.

So often we do talk about cutting out slow paying customers or customers we don't like. The thing I am concerned with is this. At what point should a business get to the stage of cutting out the pain in the butt customers?

Does a business need to be well off to do this?
Should a newer business do this?

I think it might come down to personal preference for after all you are the captain of your ship but what is in the best interest for you and your company?

[tiedeman]

The last two years, especially in the last year, I have been cracking down on late payers. Yes, some regular customers I let slide a couple of days (not weeks), because I know that they will pay me, but when it comes to new customers, I will not let them slide. With new customers, they have to build trust first and pay all of their invoices on time for at least the first few, after that it they are behind a day or two I am ok with it. I don't think that's ok to do, but I do turn a cheek now and then.

As a service industry we are basically giving customers credit lines. We could possibly do 4 weeks worth of work before they get the first bill, and then if they don't pay you are out that money in not only labor, but perhaps product as well.

Something new that I started to do this year to weed out the new bad payers was I move out their first invoice right after the first service provided. This way, if they do decide to stiff me or pay late, I can cancel all future services without extending my credit line to them too deep

[Steve]

Have you ever considered this or do you know others who demand first month to be prepaid?

[tiedeman]

Currently right now I am starting to put together an application process for new customers. Bascially it won't be an application presented to them, but something that I will follow for guidelines

[Steve]

I think that is a great idea. Let us know what it consists of when you get it finalized.

[Howard Roark]

I say drop em' all if they're causing you any extra stress! LOL

Really though, I was re-reading the "Lowballing or just smart" thread over at ******** the other night, and one thing TJ said that I've really taken to heart is to never feel like you need the customer. This gives them the leverage (as in lying to you and you still going back) and having you do things you wouldn't normally do. Turning away work sometimes can be better for your business!

[Steve]

Howard you do bring up good points. Bad customers can pull down a good business if you let them.

The thing that concerns me about this topic is when a new business owner reads it, they may feel like they too don't need the customer. Now if you add inexperience into the mix, you then have the ingredients for a troubled situation.

New business owners need to explore and experiment. See how it is to deal with good customers and bad customers. Then develop a policy on how to deal with customers in general.

There have been plenty of large companies whom have gone under because they have turned their back too much on their customer base. You have to be really really careful.

There is a fine line between success and failure, many times what defines this line is the business owner's view of their customers.

Thoughts?

[tiedeman]

Well, I decided to drop all of these customers by the way. I have been doing work this type of work for too long to have to keep on dealing with these type of customers I feel

[Steve]

I am glad to hear you were able to confront these issues and think this out, then act.

Have you found it has put you more at ease now?

[tiedeman]

Yes, I have found in the past two years that I have dropped a lot of customers, but when I drop the stressful customers I realize that I am more relaxed and I enjoy work a lot more

[Steve]

That is very important. If anyone is taking away your love of your business, it's time to review if they need to go.