One Easy Exercise to Identify Your Best…And Worst Customers!

NOTE: Click here if you prefer a video version of this article

 

Who are your top 3 best customers?  Can you name them off the top of your head?

I’ve spoken with hundreds of MSPs over the years and many of them can come up with a handful of names quickly, but when I ask them why they chose those particular customers, I get a mixed bag of reasons: “they spend the most money with us!” or “they’re great people” or “they grow fast and keep buying more stuff!”.

Everyone has a different angle on what makes a good customer.  The same can be said for what makes a bad customer.  But when you apply some logic and analytics to it, the results may surprise you.

And for the record, I’m not talking about some complex algorithm.  I’m not suggesting we plug your customer base into an AI engine and see what spits out.  I’m talking about a simple exercise that you can do easily and quickly.

Why is it important to identify your best and worst customers?  Because you may be spending too much time with the wrong group.  When you invest with the RIGHT customers, watch your business skyrocket!

By the way, if one of your goals is dramatically increase the number of new customers you add to your company, watch this video to learn about one simple strategy to skyrocket your new customer acquisition this year.

From my first-hand knowledge, here’s a simple exercise to show you who your best…and worst customers are, at least using my simple recipe.

The importance of investing your time with the highest potential customers

This simple exercise involves identifying the customers that:

1. Take up the least support tickets and hours clocked with your support engineers
2. Pay their bills on time
3. Are easy to communicate with
4. You genuinely like
5. Book a lot of revenue with you!

Here’s one easy exercise to determine your best…and worst customers

This one easy exercise is broken out in the following steps:

1. Support Time and Burden on Team

When it comes to supporting your customers, some are easy and some are difficult.  Try this exercise:

• On a simple spreadsheet, list every one of your customers on the left side
• In the 2^nd column to the right, add the title: “Burden on My Support Team”
• Beside each customer name, put a score of 1-5.
  • 5= Super easy to support, barely ever call in, when they do, easy to resolve and pleasant to deal with
  • 1= Multiple support calls, always angry, it’s always an emergency, constantly escalating tickets for faster resolution

2. Pays Their Invoices On Time Without Hassle

Everyone wants to get paid on time right?  But not everyone does.  So:

• In your 3^rd column to the right, put the title “Pays Invoices on Time”
• Beside each customer name, put a score of 1-5
  • 5=Always pays on time, rarely disputes a charge, doesn’t argue if prices increase, pleasant to deal with for your admin team
  • 1=Always chasing customer to pay their bills, customer is always arguing about charges, complains when prices increase, your admin staff hates dealing with them

3. Easy to Communicate With

Communication is critical to keeping a business relationship productive.  Too bad not everyone sees it that way.

• In your 4^th column to the right, put the title “Easy to Communicate With”
• Put a score from 1-5 beside each customer name
  • 5=Easy to reach, always responds, have productive easy conversations/emails/video calls, pleasant to deal with
  • 1=Can never reach the customer, won’t return messages, emails or calls are brief, always need to clarify or verify information

4. Customers You Really Like

OK, I admit it.  This one is the least scientific, completely based on your emotion, very subjective, and may change from time to time.  But it’s a people business so this wishy washy criteria is still important.

• In your 5^th column to the right, put the title: “Customers I Like”
• Put a score of 1-5 beside each customer name
  • 5=I love these guys!
  • 1=I can’t stand these guys!

 5. Show Me the Money

Finally we get to the financials!  Which customers keep the lights on in this place?  Because this one is super-important to your company’s financial health, it gets a different weight-element.

• In the 6^th column to the right, put the title “Revenue and Profitability”.
• Put a score of 1-10 beside each customer name
  • 10= This customer is in my top 20% highest revenue and/or profit and is growing.
  • 1=This customer is in my bottom 20% of revenue and/or profit and is flat or shrinking.

 

6. Let’s See the Scorecard

I’m sure you’ve figured it out by now: high scores are good  😊 and low scores are bad  ☹.  So your best customers:

1. Are easy to support!
2. Pay their bills on time and don’t complain!
3. Are easy to communicate with!
4. Are really likeable people!
5. DRIVE YOUR REVENUE AND PROFITABILITY!

Your worst customers…well…

Conclusion

So it should be clear.  When you invest with your best customers, your business will grow and be profitable, and your company’s morale will be healthy.  Good luck with the exercise!

For more advice on how to add more customers – the good kind – watch this video for one simple strategy to skyrocket your new customer acquisition.