Are all your clients fabulously awesome, perfect, wonderful, amazing, ideal clients?
Or are there a few hangers-on and lurkers in there that you would actually much rather see the back of?
Do you have some of those awful clients that bleed you dry in terms of your time, your energy, and your cashflow?
One of the things that I’ve been doing with a few different clients at the moment is working through their list of existing customers to grade them.
Which means they can see at a glance how many of their customers are really good customers that they want to nurture and retain. Versus those that are kind of average, and they just need to improve a little in some way.
And of course it shines a light on how many of their existing customers they ought to completely get rid of!
So I wanted to share with you today the way that I do this so you can hopefully apply this in your own business as a way to help you upgrade your client base.
For me, there are 4 typical grades of customers.
A is for Awesome
So an A grade client is an absolutely awesome customer.
This is likely to be somebody that spends really good money with you, that pays very consistently, that publicly raves about you, that brings you lots of referrals and testimonials, and that sticks with you for life.
These are the customers that really lift you up.
They completely and utterly appreciate and love everything that you do for them. They value your expertise, and they treat you like a trusted partner.
B is for Bread & Butter
Your B grade clients are your hassle-free bread and butter customers.
These are the kind of people who perhaps spend a little bit less with you, but they typically stick around. These are your below the radar people.
They never ask for things to be redone. They don’t ask for work at the very last, final, possible moment. They are loyal, they’re consistent, they’re trustworthy as a client. They pay their bills on time and never ask for a discount. And they occasionally refer you to a friend.
In a nutshell, these are lovely, easy customers.
Now the challenge sometimes with these lovely bread and butter, easy-going customers is that they’re very easy to accidentally neglect, because they’re so quiet. They sit in the background, never giving you any hassle, so it’s surprisingly easy to forget that they exist!
But these sorts of customers bring you consistent cashflow for the long term. So, you do need to make sure that you’re not neglecting or overlooking these B grade bread and butter customers.
C is for Change
Let’s be honest, you could use a few different definitions for this type of client, but we’ll keep it polite and describe them as the ones that need to Change.
For instance, a C Grade client might be somebody who regularly pays you a bit late. You know the ones you’ve always got to nudge before they remember to pay the invoice? Yep, those!
They could also be somebody who has a habit of constantly asking for something slightly over what they’re really paying for.
They may take up a little more of your time than they should do. They might quibble here and there about an invoice or ask if you can knock a bit off.
And if they do bring you any referrals, they’re probably not very good ones, because they’re likely to tell them to come and talk to you because you’re happy to cut your prices & you’ll bends over backwards for them!
But here’s the thing. Your biggest challenge with a C grade client is that it’s very often your fault they’re like that!
It’s easy to instantly label them as poor clients and think that’s all their fault, and it’s just the way they are. But in many cases, the reality is that most of these people are poor clients because that’s what you’ve taught them to be!
Let me explain … if you have C grade clients that consistently pay you late, that’s potentially because you haven’t at any point been assertive enough about their need to pay sooner, to pay earlier, or even challenged them that in future they’re going to have to start paying up front, because they’re not reliable and they’re having a negative impact on your cashflow.
If you’ve been nice and let them off; if you’ve tolerated this pattern from them, then you’ve inadvertently given them the message that it’s ok.
You’ve given them permission to keep doing this!
Or maybe you have those clients that constantly expert a little bit more than they’re paying for. Again, that’s quite probably something YOU have allowed to happen.
Because you’re such a nice person, you may just keep doing the extra work rather than at some point having to actually challenge back and say, “Look, I just need to remind you of exactly what is in our terms and conditions or remind you what’s in the package that you signed up for because actually you do keep going over that,”
You can do this in a nice way and say, “Don’t worry, I will do this for you this time, but if it happens again, I will have to charge you.” But you have to be honest and assertive if you want your C grade clients to change their behaviour.
These examples are why I class these C grade clients as the ones where some kind of change needs to happen.
Because right now these customers probably aren’t great for your cashflow, or for your time, or for your organisation. Because they probably also ask for everything at the last minute, which you keep allowing them to do!
By you being more assertive, resetting the boundaries, and helping these customers to regain clarity on the best way to work with you, it’s surprising how often these C grade clients can be re-educated to become a B grade clients.
Remember those lovely bread and butter customers who never give you any hassle? Well many (although not all, let’s be honest) of your niggling C grade clients can be turned into hassle-free B grade customers.
But YOU have to be the person to instigate that change.
D is for Duffers
So D grade clients There are a few different terms that you may wish to use for them, but we’re keeping it polite here, so we’ll call these your real duffers.
These are the people that are essentially just a complete and utter nightmare, and who it probably takes you weeks, if not months to get the money out of them.
They constantly want their work redoing, they question your expertise, they question your quality, they question your work, they actually start to make you question your value and your self-worth and how good you are in your business.
These are the people you know you don’t enjoy working with but you allow them to hang on and hang on and hang on, because you worry that if you ditch that client, then you’ve got a gap in your income.
But more often than not, they’re such terrible late payers, you’d actually be better off with a temporary gap in your income, than with the uncertainty of whether that money’s coming in or not.
If you have customers like this, who are a huge drain on the business and are such poor customers, then these people don’t need to change. They don’t need to be re-educated to become better clients.
They just need to go!
Honestly you need to ditch them. D is for ditch, because these duffers are just a drain on you.
I know I make that sound much easier than it is but having guided a LOT of customers to do this over the years I can say with absolute confidence that it’s worth it.
When you finally ditch those duffers, you’ll be amazed by the incredible relief you feel, and by how quickly your confidence comes flooding back.
And once you’ve got back all the time these people were stealing from you, you’ll be surprised by how quickly you can get out and replace those duffers.
And once you’re much clearer about what a good customer looks like you’d be much more likely to replace those duffers with some really good B grade or maybe even A grade clients because you’ve got more focus and more time.
So, if you haven’t ever done the grading exercise on your customers, it’s a great thing to do to give you real perspective on how good your customer base is right now. And to show you exactly what you need to change to start gradually upgrading the quality of your customer.
If this something that you think would really help in your business, but you’re still not sure how to go about it, then get in touch and we can work through that together.
If you have enjoyed this blog, then please feel free to share and to let me know in the comments below what you liked about it and how it particularly applies to you.