don’t let the door
hit you on the way out
can your business grow by firing
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
“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
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.
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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.
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
Name omitted by request
Submit your comments to firstname.lastname@example.org