don’t let the door hit you on the way out
can your business grow by firing customers?

Last year, Sprint Nextel Corp., the third largest wireless provider, sparked outrage when it told at least 1,000 customers to take a hike. Sprint is not alone in this kind of action. The profit-building strategy is becoming increasingly popular.

Doug Hall, author of the “Jump Start Your Business Brain” series of books, says “you’ll have more fun and make more money if you enjoy your customers.” In a recent BusinessWeek article, he recommends creating a balance sheet for each customer. On the asset side, list revenues, and on the cost side, list profit margins. Is the profit margin going up or down? His final test: do you dread returning calls to certain customers? Sprint believed it needed to hang up on some irritants.

“These customers were calling to a degree that we felt was excessive,” Sprint spokeswoman Roni Singleton told Fox News. “In some cases they were calling customer care hundreds of times a month for a period of six to 12 months on the same issues even after we felt those issues had been resolved,” she said.

Could Sprint’s example benefit your organization? Or, will dumping low-margin or problematic customers harm your image? The answer depends on your organization’s overall strengths. Does objective data demonstrate you generally have a good reputation?  Do you have a method of compiling, comparing and analyzing customer complaints? Is there a pattern of complaints that actually reveals deficiencies on your end? You may need some professional help finding out. You may also need to tailor your actions to avoid running afoul of government regulations.

As it turns out, Sprint ranked dead last in last month’s J.D. Power and Associates 2008 Business Wireless Satisfaction Survey. Sprint may not be the best example to follow.
On the other hand, Chicago advertising agency Cramer-Krasselt’s very public split with client CareerBuilder – incidentally involving a four letter word – helped them win respect and grow new business. The company went on to win the coveted Porsche auto account and several others specifically because of its action.

“If anything, it was a positive,” David Pryor, vice president of marketing at Porsche Cars North America, told Advertising Age. “I had a lot of respect for them standing behind their work and conviction. At Porsche, we want an agency that has conviction and passion.” Advertising Age writer Jeremy Mullman concluded, “Who knew publicly telling a client to perform an anatomically impossible act on your way out the door could be so good for business?”

Sometimes, the issue is not even bad blood. In many cases, businesses simply outgrow the kinds of customers that helped them get started in the first place. What will compound the problem is accepting referrals from your worst customers. The old saying, “birds of a feather flock together” applies here.

These are delicate issues to be sure, but an inward analysis is the first step to take before deciding on a course of action.

Submit your comments to creative@cocoboston.com.

chamber names COCO+CO.
small business of the year

COCO+CO., a provider of strategic corporate communications, received Haverhill’s 2007 Small Business of the Year award in the Service for Profit category. The award was presented earlier this year by the Small Business Committee of the Greater Haverhill Chamber of Commerce (GHCC).

Tim Coco, president and chief executive officer of COCO+CO. accepted the award on behalf of the company at the 18th Annual Small Business Breakfast at the Atkinson Resort & Country Club in Atkinson, N.H.

“I am honored to accept the Chamber’s recognition of COCO+CO.’s pro bono work and proprietary Connections Process. Using this tool, many businesses have assembled successful, goal-oriented advertising, public relations and Web programs,” said Coco.

To qualify for an award, candidates were required meet specific criteria including maintain a membership of at least two years in the GHCC, impact the community in a positive manner, demonstrate positive leadership within his or her business and make a conscious effort to work with other members of the chamber.

your letters

Your June story (“recession winners and losers”) was right on the money, so to speak. Today is my last day at work and they are auctioning off the company equipment next week. It is a sad end for a once well-respected company. My employers prospered during and after the last recession by hitting the streets and keeping our name in front of customers. But, it is a lesson they apparently forgot. In the last few years, they squeezed more profit out of the business by cutting marketing expenses. We could have recovered from the loss of one or two key customers, but we had nothing in the pipeline because we hadn’t reached out to anyone.

Name omitted by request

Submit your comments to creative@cocoboston.com