Around two decades ago, it became popular to train employees that the customer is always right. This mantra helped to swing the pendulum from supplier dominance to customer dominance. Unfortunately, the pendulum has swung too far. While the sentiment is still true, we must now define the words, "the" and "right".
The customer can no longer mean anyone who does business with us. Increasingly, some of the most demanding customers are the least profitable. If employees bend over backwards for these customers, it will not be long before they completely erode your bottom line. Not every customer is right for every business.
Every business has its own unique DNA. This chemistry makes it a natural fit for some customers, but not for others. Sales people must be trained to recognize "right-fit" customers, versus "poor-fit" customers. It doesn't mean that they must never do business with poor-fit customers. It does mean, however, they must limit their company's investments in these types of customers.
Conversely, when a relationship with a "right-fit" customer is secured, you must be willing to make the appropriate investments, innovations and adaptations to remain on-goingly relevant to this customer. Here are some criteria that you can apply to discern if "the" customer is "right" for your business:
- How easily can you access company executives?
- When do they involve you in their decision-making? (from not at all to they seek your advice very early in the process to help them frame their challenges.
- What is the strategic fit?
- Do you have to compete for every piece of new business, or do they look after your interests as well as their own or only their own?
- When a competitor shows up with compelling value, do they give you first and last look? (i.e., do they show you what your competition is up to and give you a chance to respond? On top of that, before they make a final decision, do they come back to you for a final chance to respond?)
- How willingly are they to refer business to you?