Don't Fire Your Clients, Charge More

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I was reading a book the other day by one of those business gurus. You know the kind. All fired up. Poofy hair. Loud voice. His thing is telling his audience to "fire your customers." Oh boy.

This guy is totally out of touch. He makes his income by selling books written at a fifth-grade level to over-eager business types. He gets paid $10,000 to appear at sales conferences, punch his fist in the air and cry out to his hung-over audience "fire your customers!" He sells tapes and videos on QVC to his legions of fans. Every year he comes up with a new catch phrase. What's next? How about "castrate your employees!" Or "behead your suppliers!"

The poofy-hair guy doesn't understand this basic fact: good service providers don't fire their customers. We worked too hard to get them. We need the next order from that customer. We need his next check. Every dollar counts. I'd do business with Satan himself if the price was right, and I'd sleep like a baby that night, too!

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So would my friend Greg. He runs a little printing company which grosses about $3 million per year. Greg's got a few presses and a couple dozen employees. Like any business owner, he deals with a lot of jerky customers. But he doesn't fire them.

Many of his customers have high demands and higher expectations. They have no patience. Turnaround time is short. Greg's competition is breathing down his neck. His margins are tight. Too much ink and he loses money on a job. One bad machine part and he's a day behind schedule. His pressman calls in sick and Greg's up the creek.

Greg's got some customers who understand this and others who don't. I guess the customers who don't are the ones the poofy-hair guy is telling us to fire. But Greg's not about to fire anyone. Why? Because that customer's going to have someone print his latest catalog and Greg wants the work. But even Greg, like me, has his price. So a few years ago he came up with a little calculation for those special, pain-in-the-you-know-what customers.

He calls it the PIA Factor. Greg doesn't fire his customers. He needs his customers. Even the pains-in-the-you-know-whats (PIAs).

Greg has created a very special row in his Excel spreadsheet when estimating jobs. That line is the PIA line. It's a very subjective number that figures into each of his quotes. It comes from years and years of dealing with PIAs.

When Greg estimates a new job, he very carefully figures in inks, paper, other materials, press time, labor time, overhead, shipping and all the other costs he can think of. And then he adds in his secret ingredient. The PIA Factor. Is this customer a jerk? A PIA? Does Greg cringe every time he calls? When he sees this customer, does Greg have an overwhelming urge to punch him in the face?

All of this is included in the PIA Factor. It's judgmental and it changes every time. But it's the price Greg needs to do business with this customer.

Need examples? OK. The PIA Factor for doing business with Peyton Manning would be very low (he seems like a nice guy). For Donald Trump, high. Nicole Kidman: low. Rosie O'Donnell: high. Regis Philbin: low. Simon Cowell: High. Make sense?

Unlike what the poofy-hair guy recommends, Greg doesn't fire his customers. He just changes the PIA Factor. A customer shouldn't be fired. They should leave on their own. Who are we to turn away from work? We need every penny we can get.

Now put together a list of your clients. And decide which one needs to be paying you more. You already know who they are. Some may decide to leave, once you hike prices. But others may very well stay and you'll at least feel like you're getting some compensation for the grief.

Gene Marks, CPA, is the owner of the Marks Group, which sells customer relationship, service and financial management tools to small and midsize businesses.

(c) 2009 Accounting Technology and SourceMedia, Inc. All Rights Reserved.

http://www.webcpa.com/ http://www.sourcemedia.com/

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