Charlotte
Toronto
Call us at: 1 800 707-9150


Aligned Marketing Blog

Marketing executive, Steve Hartkopf shares all in this informative yet personable blog.

Maybe you need better customers?

Steve Hartkopf - Friday, April 10, 2009
On Tuesday a friend told me about two contractors that will likely shut their doors even though both have backlogs of work. Their problem is their backlogs are filled, as are many contractors, with low margin business secured through bidding.

On Wednesday a real estate broker told me he’s trying to close on a $6.0M piece of development land in California. He said, "Since I'm selling to the government, it's almost impossible to get anyone to make a decision."

Later that day a contractor came to our house to repair our air conditioner. His business is booming. However, he said, “The majority of my business is as a sub-contractor to (name withheld, it’s a national home warranty company).” As such, it is low margin business.

Finally, a local printer told me that he was busy but every job becomes a rush job. He said, “The requirements always change, the edits seem endless but the deadlines stay the same. So we end up shifting our production schedule and paying overtime, and that kills our margins.”

Is there common thread? Yes, a need for better customers. Customers who will pay fair value for your services and respect mutually agreed to deadlines.

Don’t get me wrong; I’m sympathetic. I run a small business myself, and the temptation to think any order is better than no order is strong. I’m also not saying fire all your marginally profitable customers.

What I am saying is we all need to take decisive action to balance marginally profitable customers with highly profitable customers. To actively seek good customers because we already know the marginal customers will find us.

Your customers are similar to a portfolio of stocks in that both represent future income, at least in theory. If a customer consistently insists on the lowest price, then that customer needs to be replaced or subsidized, just as you would an under-performing stock. This can mean raising their prices or balance them out with a higher margin account. If a customer can’t make a decision and the back-and-forth time costs you money, then that time needs to be factored into the original price. 

I asked each of these people what they were doing to correct their situation, to secure better customers? Only one said, “I need to do more marketing.” Guess which one?

Steve


Subscribe

RSS Subscribe to the Blog RSS


Bookmark and Share

Linked 2 Leadership: The Leadership Collaboratory

Recent Posts


Tags

encourage viddler Communication Wins unique selling proposition Joanna Krupa Microsoft advertising strategic Tom Rath Pay-Per-Click wefollow article submission Outsourcing video Caveman Meetings Wal-Mart Followers Duke Energy website designers manage Yin and Yang MotherApp Drucker economy hulu Apple Chaka Khan GenY Alltop Sports Illustrated, Cubs, Steelers, Atlanta Falcons, Mets, Michael Vick, speech Wall Street Journal Kyl blog Marcus Buckingham sales copy blogspot social media recovery Lists fire spammer Marketing Gary Vaynerchuk ObamaCare statistics,Hans Rosling Flip Ultra HD Paige McCarter symbolism iPhone LinkedIn retirement planning personality styles time management metaphor imagination thought leaders Copyblogger ReTweet,Twittersphere,Tweep,Twit,Firefox,Twitizen,TinyURL,Direct Message,DM Blogger's Bulletin SEO coach ebooks PPC email content simile Reagan Hartkopf StrengthsFinder green goals Clover Community Bank wordpress headlines stimulus package winners project management Google GoDaddy leader The Bloggers' Bulletin marketing investment Twitter article writing Internet Aligned Marketing David Ogilvy Lisa Hoffmann Brandenburg gate FriendFeed Dave Navarro call-to-action Strengths Movement Scott Hepburn Lake Wylie productivity margin DNA DWS Vimeo compare and contrast linkers CNET online video, FlipUltra HD website design cold calls Dailymotion writing Chris Brogan success website Problogger selling Florence Cohen TechCrunch Business Marketing Association pandering 2010 Viral Marketing Obama press release Crush It! Dancing with the Satars Sinbad, Celebrity Apprentice eMarketer Gen X Google docs blogging Corey Creed GM Digg consulting voicemail price Fast Company Stumbleupon Brandon Uttley communication mobile ISA, ISA Conference, Industrial Supply Association search twitter great content Jonathan Morrow social networking change your business Mashable Jesus Olympics teams senior management links people The Blogger's Bulletin million dollars, millionaire, retire, donate, charity taxes strategy sales productivity article twellow customer relationship search engine optimization Leadership 9/11 listorious ExecuNet Globals tweens linking KnowEm Darren Rowse Steve Hartkopf wastebasket the message nearby tweets Inbound links Facebook free 4th of July new media segmentation recession YouTube Berlin Wall customer promotion posting copywriting storytelling website traffic Google Wave about.com video interview precallpro lead generation Wikipedia,Inbound Links

Archive