How Giving Up Your Customers Will Increase Profitability Lou Altman is an impactful executive who has led sales teams to records, run sales campaigns in the hundreds of millions of dollars, and created and implemented client retention programs. He currently serves as CEO of GlobaFone, his satellite communications company. Lou is an energetic and dynamic public speaker, executive coach and he trains managers, sales and support staff on how to form better relationships and increase profits. Reach out to Lou at l.altman@loualtman.com.
Peter Drucker said, “The purpose of business is to create and
you trust what I am telling you?” I asked. She replied that she
keep a customer.”
was required to look for the lowest price (despite the handset
No rational person would dispute that. No customers means no income, no staff, no production. But are customers worth it? I’m irrational so I will say ‘No’. I say customers jeopardize
sale NOT being at the lowest price). I pointed out the obvious truth: When I cancel your service and you go looking for service you will find that rates really have gone up.
your business. They want the lowest price, need the most care
Is this the kind of business relationships you want? If you don’t
and are first to abandon you for a lower price. How’s this for a
mind being questioned and this kind of mis-trust from your
business model - Low margin, high support cost, and no loyalty,
customers, stop reading and keep doing what you do now. If,
which means high marketing expenses to replace defectors. Not
however you are more inclined to work with people that trust
too attractive is it? So what do you do? Simple! You fire them!
what you tell them, then getting rid of customers is a great move.
I have fired a customer, twice. This company had satellite service
Or better yet, turn them into clients. By contrast:
with us for a few years buts flat out refused to pay the network
We have a client that spends over $1million annually on a
rate increase. I terminated service as per the service agreement.
bundle of satellite services. We discuss which services are the
Two years later they called looking for pricing on the newest
best option, I provide a quote, they confirm and ask if they are
handset. I refused, explaining that I knew they only wanted the
getting a comparable deal to other clients (they always are!) and
lowest price and that was not our business model.
they place the order. And they pay on time. When they request-
After some pseudo-begging on the caller’s part I told her our price. “But I can buy it on the internet for XX less,” she protested.
ed we cut cost by 10%, we were able to do it. They trust us. And notice I called them a client.
‘Go ahead, then,” I responded. We did agree on pricing and she
People debate me on this point and I adamantly refuse to yield.
placed an order. We even changed our invoicing to suit them. At
There is a difference between a customer and a client. Here are
the next rate increase they again refused accept it. “Why don’t
definitions from Oxford Dictionary.com.
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