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Disqualifying Your Customers

2 minutes Read

By Gene Marks

Small business influencer Gene Marks is a guest blogger for CAN Capital. He is a celebrated author, columnist and small business owner.

To succeed in business, you need to succeed in sales. To succeed in sales, you need to find good customers. And to find good customers, you must be very good at separating the bad ones from the good. Are you good at this? I’ve gotten better over the years. In fact, there are three types of prospective customers that always raise my antenna.

The Penny Pincher. This is the guy who questions every price, challenges every fee and calls into question every cost. He asks for discounts and more discounts. He acts shocked when I tell him our hourly rate. And he’ll always behave like this even after he says something like “you know, money is no object.” I don’t feel that our rates are too high and we never overbill our clients. So I become very wary of someone who insinuates this after having just met us. It starts the relationship out on the wrong foot. Everyone has a right to question costs and negotiate the best deal possible. But anyone who’s successful at negotiating will tell you that a successful negotiation is when both sides believe they came out as winners, not when one side comes away feeling cheated. We want customers that are smart about how they spend their money but don’t pinch pennies just for the sake of it. Good customers see the long-term return on investment for the money they spend with us. A customer that’s overly cost conscious, one that cuts corners or doesn’t spend what’s necessary or is just…well…cheap…is a long term problem.

The Unprofessional. This is the prospective customer who treats us poorly. He keeps us waiting. He doesn’t reply to emails or calls. He even goes so far as to belittle what we do. This is the person who happily admits that he “fired the last firm” he worked with or “wasn’t born yesterday” when it comes to the services we provide. He makes many requests, requires a great deal of our time and never seems to understand our responses, although he claims he does. He just views us as a thing, a necessary evil, another vendor…and not a partner. Most importantly, and of my biggest concern, is that he treats my staff poorly or unprofessionally during the discovery process – making disparaging remarks, missing meetings or waving off our requests for more information. We want long term relationships with our customers. We want to be respected and valued. At the very least, we want to be treated professionally and with courtesy. This type of behavior is not a good indication for the future.

The Genius In His Own Mind. This is the prospective customer who doesn’t know everything, but wants us to think that he knows everything so that we don’t realize that he doesn’t know everything. He’s got it all figured out. He gives us business advice and challenges sometimes frivolous things just to show that he knows what he’s doing (even though we’ve already figured out that he doesn’t know what he’s doing). Good clients are genuine. They are hiring us because we do something they don’t. They have the self-confidence to know that there are people and firms who know more – or different – things than them and they can profit from that. We get it – the Genius is probably very good at what he does. But he doesn’t have to pretend that he knows everything about everything, particularly the things that we do. We don’t want to have a long term relationship with someone who will be second guessing us.

Do I disqualify these prospective customers entirely? Do I not do business with them altogether? Not necessarily. I’m running a business. I have payroll to cover and overhead to meet. Sometimes walking away from a prospective customer is the right thing to do. But other times it’s more important to just be aware that this customer is not a good one and to prepare accordingly: increase prices, allocate more resources or keep a very close eye out.