I got involved in a short but interesting conversation on Linked In this week. David Gilroy of Conscious Solutions, one of the businesses that I work very closely with, posted a recommendation referring to the perfect client or customer.
Although I doubt that the perfect customer exists, the need to measure your customers does. In the Linked In thread Conscious cite the following equation: "Client Profitability + nuisance factor + payment history + share of wallet + fudge factor = X".
Whilst the actual numbers might be a little fuzzy, when was the last ocassion you took time to stop and consider how much the last £100 or £1000 margin you generated from a client actually cost you?
Ignore your fixed costs for a moment and the variable ones that you would normally apply to a transaction, then look at the number of telephone calls and emails etc, pre & post sale, that you had to deal with, i.e. how needy are they? You might think that you can't ditch a customer because they generate so much turnover, but if that turnover doesn't equate into profit is it worth it?
Why not let your competition have your less perfect, needy customers so that you can concentrate on your more perfect ones. Like I said on Linked In, you then get a double whammy - who knows your competitors might spend so much time looking after their new best customer that they take their eye off the good ones that you've been trying to conquest.
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