Why You Should Prune Out Your Bad Clients

What if I told you that you could make more money by firing 25% of your current clients?

Sounds crazy, but I see it work all the time. Just recently, I was working with a firm whose numbers showed that 40% of their client base generated only 5% of their total revenue.

Guess what my advice to them was? Fire all 40% immediately.

It wasn’t that I didn’t care about their clients–in fact, they might have been even better served at a smaller, cheaper firm. For the firm I was advising, they were a major resource drain, and the (miniscule) financial benefit of keeping them didn’t remotely pay off the effort. Because, of course, the firm hated working with those clients. (Really!)

Cheap clients are only going to piss you off because every time they call, you’ll be reminded that they don’t even pay you much. Before you offer another discount or bring on another low-budget client, ask yourself whether it’s really worth your trouble.

Here’s another important reality: businesses tend to attract more of what they already have.

So if your firm is currently crawling with cheap, ungrateful clients–the kind who want everything for nothing and still complain about the result–they’ll just refer other cheap clients to you, and the problem will compound itself. When you find sophisticated clients with real budgets, and you do amazing work for them, you catapult yourself into a new playing field. Suddenly, you’re attracting bigger and better clients, naturally–without spending an additional dime on marketing.

Imagine what you could do with all the extra time you’d gain from dropping your lowest paying clients. Not only could you spend more time making your higher paying clients even happier, but you could devote more time to finding new high-paying clients.

Start committing yourself to only taking on high-profit work. I’ll be honest with you: it takes a lot of work (and a lot of fortitude) to constantly push back against unprofitable work, but the reward is worth it.

So just go for it. This year, drop 25% of your lowest paying customers, and use the time gained to look for higher profit work. Then, commit to doing the same thing next year, always skimming off the bottom 25% to make room for higher profits.

Believe me: you’ll be glad you did.

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