4 Customer Pitfals That Can Cost Your Business

You won?t be able to take care of your small business? customers if you don?t keep of all their deals, information, and notes all in one place. Manage client information with the help of a cloud-based simple CRM like Base.

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Take care of customers and you will take care of your business, right?

Most of the time ? yes.

But sometimes customers can be as much of a liability as an asset. Most of the time when this happens, it?s likely your fault ? whether it is because of something you have or have not done or you let a customer relationship develop that is unhealthy for your business.

Here are some areas to keep an eye on to help you stay profitable, productive, and to help? continually grow your small business? profit; taking your reputation in a positive direction.

#1 The Relationship isn?t Symbiotic

A few months ago we talked about reasons to fire a customer, such as constant emergencies, constant haggling, collection problems, and dealing with clients with less than stellar ethics.

But beyond firing your customers that don?t work well in those areas, some other issues could hurt you, too. If you aren?t doing good things for your customers they probably won?t do business with you for very long. The reverse also needs to be true. Yes, the customer is generally always right but if it?s too costly to keep a relationship or if you have parasitic customers that are too much of a thorn in your site, re-examine whether it makes sense to keep doing business with them.

#2 Low Margin

If you have high maintenance clients with really low margin rates, it?s probably not worth it to continue to bend over backwards.

If you suspect a client is less than profitable, you will want to carefully crunch the numbers to see where things stand. You don?t necessarily have to drop the client immediately upon discovering they aren?t all that profitable. ?Attempt some strategic business development moves to see if you can sell some more higher-margin products or services and use that to bring some balance to the relationship. If you can?t, you may need to start to slowly raise your prices so that you can justify the relationship.

It might cost you the client but if the margins are really slim for the effort put forth, you might have to make the tough decision.

(Note: some low margin volume clients are helpful because their volumes help you achieve better margins with your own supplier, which, of course, impact your overall cost of doing business. Companies need to be sure to look at the big picture in terms of customer prices compared to cost of goods sold)

#3 Forecasting Issues

Do you have customers who don?t forecast their future needs accurately enough? It?s not always easy to get someone to commit to a number for your inventory or time planning purposes. If you find that you are continually bringing in inventory based on a promise of a massive purchase order and the P.O. doesn?t come or you?re finding your receiving unrealistic job rushes due to poor customer planning, it can be painful.

Be careful that the same customers aren?t continually reeling you in this way and costing you money. It?s wise to set up some terms and conditions for customers with regard to returns, cancellations, rush jobs, and so on. This way you?re protected financially while still providing a valuable service to your customers.

#4 Reputation Management

Are you taking good care of your customers?

If not, you?ll likely lose them and they could post negative reviews about you, give unfavorable references, and could harm your reputation on social media. Watch your reputation online and be prepared to move swiftly and do damage control. Reputation is a key area to watch with the way business is done today.

Instead of worrying about the liabilities in relationship management, consider leveraging your customers as assets, instead. Your customers could be great assets to you in terms of reputation management because they can help you elevate your brand via social media tools like Facebook and Twitter. You can actually get your customers to help market your small business for you!

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About Dana Prince

Dana Prince writes for Future Simple?s Growth University. Dana blends her passion for entrepreneurship with experience in software licensing sales, product management, online marketing, and SEO writing to run Dana Prince Writing, a web writing agency that creates optimized content that helps websites succeed.

Source: http://www.futuresimple.com/blog/customer-pitfals-cost-business/

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