In the B2B world, time is money. When you think about it, most of the investments you make in purchasing equipment, software and even hiring employees are with the intention of saving your business time – so you can most effectively utilize those resources to increase revenue and profits.
Also when you think about it, your customers are an important investment. Your business doubtlessly spends a great deal of time and resources in customer acquisition efforts. For that reason, once you have a customer, you and your team work to make them happy so they stay with you over the long haul. But sometimes, you have a customer for whom no amount of appeasement or above-and-beyond endeavors can satisfy their excessive demands, unrealistic expectations and/or bad business practices.
So let’s quit giving such customers the benefit of the doubt and speak candidly. Some are just bad news and deserve to be cut loose. They will either continue their abusive behavior at the cost of your good employees’ performance and ultimately your bottom line, or end the business relationship on their terms – blaming your business as the reason, then smearing your reputation in your industry.
This is why it is crucial to identify customers who are a poor fit for your business and quickly correct course. The right tools and assessment methods can help identify them in order to end the relationship on your terms – and keep your focus on profitable and loyal customers. Fortunately, one valuable tool at your fingertips is a CRM solution.
What is a Poor-Fit Customer?
A poor-fit customer does not find value in the services or products your business offers, and has no respect for your time, resources and team members.
Alina Benny – senior content SEO lead at NextivaIt – lists ten points that can help you identify a poor-fit customer:
- Bad customers either don’t pay or never pay on time.
- They don’t want to pay enough, or at all. “Some customers will nickel and dime you to death,” Benny writes. “This type of client puts you on the defensive from the start. During the sales process, they question your pricing.”
- Have unclear or ever-changing demands – the proverbial moving target you’re unable to hit. Of course, you’re always to blame for not correctly interpreting their vague intentions.
- Bad customers demand an excessive amount of attention – leaving you and your employees less time to spend on providing excellent service for good, high-value customers. How to tell if they’re taking more time than they’re worth? “Start with data. Find out which clients are generating the most tickets. Identify how long their interactions take and how many touchpoints they require. Beware of anyone taking more than their fair share.”
- These customers are not available – they don’t value your time. They either don’t respond to your calls and emails, or don’t keep scheduled appointments. How much time do you waste trying to track them down?
- They are not honest. Such customers may falsely claim you promised certain deliverables, tell you that another employee promised them certain goods or services, or lie about having a bad experience with you, an employee or your business in general.
- They are verbally abusive toward you and your employees. This abuse may escalate into threats and/or physical assault.
- They make unreasonable demands – such as numerous revisions beyond those in the service level agreement (SLA), expecting 24/7 access to you and your employees, unrealistic delivery dates, etc.
- They complain to anyone who will listen. In addition to verbally trashing your business to their own circle of professional contacts, bad customers post scathing online reviews on review websites and social media platforms – which can negatively impact your reputation.
- They don’t listen to you. Customers who ignore your advice won’t benefit from the professional expertise they hired you to provide. “For example, if you’re a financial planner, your job is to give your clients sound advice to meet their goals. If the client doesn’t take your recommendations, they run the risk of failing. And clients who don’t reach their goals are unhappy clients. They may end up blaming you or, worse, giving you a bad review. And they probably won’t use your services in the future. Additionally, their failures reflect poorly on your business metrics and KPIs. You can’t show off your great stats when customers aren’t successful.”
How to Avoid Poor-Fit Customers – and How a CRM can Help
With bad-fit customers draining your resources without benefiting your business, you need to know how to avoid poor-fit customers in the first place, and how a CRM can help you in weeding out your noxious customers.
Know your customers
The more you know your customers, the better placed you are to deal with them. Moreover, when you know who your best customers are, you get a good handle on who doesn’t fit the picture.
Using a CRM solution can help you better understand your customers. With their buying history, preferences, interests and other important information, you can easily distinguish ideal customers from unsuitable customers. Our blog post – “Using CRM to Build Intelligent Relationships” – covers the importance of relationship intelligence in knowing what your customers want, keeping them happy so that they remain with you and cultivating a long-term relationship with them to further the growth prospects of your organization.
Depending on the parameters you set for identifying the wants, needs, and desires of your ideal customers, you can get to identify your bad-fit customers pretty easily.
Examine your sales process
It is a boon for your sales team if you have a well-defined sales process. With a well-defined sales process, you don’t need to fix accountability. Your team knows the stages they need to follow to convert a prospect.
Your sales, marketing, customer service, and leadership teams need to come together to define each stage of the sales process clearly. Brainstorming on each stage can correct any issues.
Again, a CRM solution can help you stick to a well-defined sales process. When your sales team knows the process, they can convert more clients by focusing on the correct stages and the right formula.
Use a self-selection tool on your website to disqualify bad-fit prospects early on in the sales process
Using technology can help you overcome the nuisance of bad-fit customers pretty effectively. You can use a tool on your website that gives your prospects the power to learn about, choose and select the solutions you offer. When you inform your customers about the products and services on offer in the first place, they can move on to another company to get what they want if you are not the right fit for them.
Incorporate lead scoring in your sales process
Lead qualification can measure and predict the lead quality based on key parameters that forecast whether they are ideal customers or poor fits for your organization. You can refer to your CRM to differentiate ideal customers from potential problem customers.
To integrate marketing and sales with lead qualification, you need to know the difference between a marketing qualified lead and sales qualified lead.
While a marketing qualified lead engages with your company via one of your inbound marketing channels – such as your website content – a sales qualified lead interacts or takes a specific action, such as filling out a “contact us” form or using your self-selection tool. A marketing qualified lead is not a sales-ready lead. But your sales team can have confidence that a sales qualified lead isn’t likely to be a bad lead.
If you have a lead scoring process in place, it can help your sales team close more deals. Your sales team gets to deal with genuine leads. And a CRM solution can help you in this tremendously.
Educate bad-fit prospects by creating content so that they can choose to opt out
If you don’t want your CRM to get bad-fit leads, you should start creating content that can educate your prospects. Your sales reps will not have to waste time on bad-fit prospects because most of them would know what they want.
If your content educates your prospects on cost, comparisons, problems, “best of” lists and reviews, you will automatically start getting fewer bad-fit leads, which means your sales reps will not have to waste time on poor prospects.
When you address your prospect’s concerns, fears and questions and build trust through your content, it allows them to make an informed decision. In other words, when you shift the onus of the buying process on your prospects, it helps them make the right decision.
Therefore, if you design your forms with questions that provide you with the right insights on the information you need, you can mitigate the chances of attracting bad-fit customers to your CRM.
How to Break Up with Poor-Fit Customers and Learn from Experience
If you want to utilize your resources judiciously and focus on your profitable customers, you need to know how to break up with poor-fit customers. According to Destination CRM, a recent report by Gartner notes that most organizations break up with poor-fit customers on their own proactively without waiting for the customers to end the relationship. However, the decision to break up with a poor-fit customer must be a cross-functional effort because such efforts can expose organizational silos.
As the Gartner report observes, all functions need to agree on a common set of points that define a poor-fit customer. Next, you need to determine how each point would appear in related functions. Functional leaders need to reorganize their team’s processes to discard poor-fit customers. What it means is this – customer service and support teams must reconfigure their processes to ensure poor-fit customers don’t receive preferential treatment from anyone. Marketing teams also need to reorganize their advertising strategies to ensure they leave out poor-fit customers.
As you explore breaking up with your poor-fit customers, Gartner recommends the following:
- Create a customer-fit score that defines the category of a customer. For example, there is a need to grow the relationship, maintain the relationship or break up ties with a customer.
- Work closely with financial teams to devise ways that tell you how to acquire and grow your business with good-fit customers to compensate for your losses.
- Adjust your organizational metrics that include employee incentives, and rework customer break-up and growth targets for your employees.
- Convey your break-up strategy to your bosses to ensure everyone is on board. They must understand that any reduction in retention is intentional and is for the company’s overall growth.
- Revise your retention targets, which should correspond to the percentage of good-fit customers and not overall customers retained.
Emily Potosky, senior principal, research in the Gartner Customer Service & Support practice, says, “… organizations will need a consistent data analysis strategy to capture and align customer data across different silos. This analysis strategy will be critical for predicting poor-fit customers.”
To get your analysis strategy right, you need to use a robust CRM that helps your employees differentiate poor-fit customers from good-fit customers. If you are looking for a robust CRM solution that can help increase your overall revenue by managing your customers efficiently, eZnetCRM is a cloud-based CRM that can help you build strong relationships with your good-fit customers. Our industry-leading system allows easy, seamless management of every aspect of the customer experience. Contact us to learn more about our solution and get started with our 30-day free trial offer to assess that you have made the right choice.