The Good
For a moment, picture your best client and only your best client. You know who I am talking about – that client of yours who pays you extremely well and you love working with.
Now picture having ten exact clones of them. Now picture one hundred. One thousand. What would your business look like?
I suspect with just ten clones of your top client, your business would improve dramatically. With a hundred you might lead your industry. And I could only imagine what it would be like to have one thousand top client clones – good times for sure!
The Bad & The Ugly
Now imagine your worst client. The one who demands everything, is never satisfied, and pays you squat. The one who makes you cringe when you pick up the phone.
Imagine ten of those worst clients (you can use the word “slugs” if you prefer). How about one hundred or a thousand of them. Cloning them will decimate your business.
The Strategy
A colossally successful business does two things:
1. Clone The Best – A colossally successful company puts all its marketing, networking, promotional and sales efforts into targeting their ideal, top clients.
2. Dump The Rest – A colossally successful business has the discipline to dump (refer out to other vendors or simply disengage) the worst, and a strategy to avoid working with them in the first place.
Clone the best, and dump the rest.
Yep, you should print that one out and pin it above your desk.
I would love to hear your experiences – the good, bad and ugly! Have you done this strategy with success? Do you have horror stories? Do tell!
Hi Mike. As you asked, Yes i have horror story and it is:
I’ve tried to create a website for so long and unfortunetely i had no success so far, i really know what i wanna write.
If i could create a website i would be writing about English Strategy since i don’t speak english well but i have some strategies how to learn, and since there are many people who want to learn i think it would be helping them and also help me.
So i would like you to give me some suggestions about it.
Thank you so much.
When you don’t have any clients to start with, the approach is to consider yourself as a the top client. I assume you devised these strategies for yourself. So ask yourself, where did you go prior to creating your own strategies. Then try to make clones of you.
Often the Top Client reveals themselves as you start putting your marketing out there. But you need to start somewhere, so start with cloning yourself.
This is a classic “Easier said than done” ! I come from about 10 years of CRM Fianance in the industrial environment. There are two reasons why this is difficult.
(1) Clients are of different sizes. (Especially if you are B2B) It is nearly impossible to have 10 clones like GE or Apple :). If you have a great relationship with either of them and still make a lot of money of them. Be happy but accept that you cannot clone them the way the pumpkin’ guy describes it.
(2) Deathspiral. If you dump the “annoying client”, your overheads are going to be distributed over fewer “good clients” and the good clients are going to get annoying on your P&L as well. Soon you will dump all your clients and your overheads will have no place to allocate :).
So pumpkin guy – come on 😉
PS: Btw I am a big fan but this is a rushed unthoughtout post 😉
Great feedback! But I totally disagree. When you dump bad clients, you also remove the associated overhead. Pareto’s Rule points to the likelihood that the lowest 20% of your client base has 80% of the unreasonable demands that you need to dedicate resources too.
That means getting rid of bad clients, allows you to significantly reduce overhead and /or redirect that overhead to service a much higher quantity of great clients.
In regards to your point (1), an Apple is very repeatable… since, and please tell me if your experience is different, when you service them or sell to them… the client is usually a department head. It is RARE that a vendor services an entire Fortune 500 company, it is almost always parts of the company not the whole. Basically a smaller business division inside a big company. You can now go for all the department heads (small businesses / divisions) within Apple and clone away.
In my second company we worked with HUGE firms doing corporate investigations. Once we got in a division, we would clone them within that company.
Please tell me your experiences, and would love to hear how your experience is different.
– Pumpkin Guy
Hi Mike, I read ‘Pumpkin’ for the first time last week and I’m halfway through again. I got sooooo excited. We started dumping subscribers and customers a few days ago and it feel sooooo good. We’ve researched to find our ‘bestest’ ones and we’ve already surveyed them and are working on our first ‘customer designed’ product. I was the guy you described…stressed…but I knew I’d found the answer with your book before I’d even implemented a single thing. THANK YOU.
Mike – This is great feedback. Congrats on the change. Would you mind sharing the results you are experiencing. Also, could you share your results with Jacci (commented above). Her feedback is that it doesn’t work.
Now I know that you are only a few days in, so perhaps you can speak to the financials (unless you are in a biz with daily transactions), but I would love to hear the emotional return.
No financial results yet Mike as we are very much a daily multiple deals outfit. However I have to say it is difficult to put your concept across in it’s entirety to folks who haven’t read your book(s). I have read a lot of business books. All the ones by the smart, streetwise modern thinkers and I’m kind of a pretty smart cookie…but I have never read anything like The Pumpkin Plan. Every sentence I read I could feel the stress fading so even though I was suffering all the things you said I would…..I was feeling such a sense of relief because I was holding the answer right there in my hands….epiphany?…you bet. I will report back soon with some hard results for you….and all I can say to anyone who thought that your post was ‘not very well thought out’ is….you may want to read the book.
Wow Mike! This is so kind to hear from you. Thank you for being a fan of the book, and I hope it serves you well in both stress reduction and consistent nice revenue growth.
I may have asked you already or you may already have done it… would you mind posting an honest review of the book on Amazon?
Mike — Well, I’m starting today by CLONING YOU! Thanks for being my NEW Favorite client!
Elisa Goodman, Curmudgeon Cards
LOL! Thanks!
It may feel good at first to dump the annoying customers, but to me, all paying customers are my boss and all are equal whether I “like” them or not. Personality differences have nothing to do with it. Its business. For the record, a colossally successful business finds a way to make everyone satisfied. Many large businesses (think of airlines) do not care to make customers happy at all and the ones that care about everyones opinion will ultimately get market share.
Not a very well thought out post.
Hi Jacci – Thanks for your opinion and your honest critic. I disagree fully, though.
I believe that a bad customer takes up inordinate amounts of time for the same pay that a great client does. Great clients net you a much greater hourly wage. You make more, faster – there is efficiency. Take the revenue you generate from a great client and divide it by hours spent. Do the same for your worst client. Per hour, I suspect the great client yields a lot more.Second, the emotional toll of working and servicing a client that you don’t like and have conflict with you drains focus. It is like dating someone you can’t stand…. you would be dumb to do it.
In regards to airlines, I suspect you have flown neither Southwest or Virgin. Both focus on a very specific customer and put A LOT of care to make those customers happy. Both are the most profitable in the industry that last time I checked.
Do you have an experience that you could share that speaks otherwise?
Thanks!!!
I agree with Mike here.. I have been using the strategies in his book The Pumpkin Plan. Cloning the best and dumping the worst is one of them and it has been working great for me and my business! As soon as I fired my “bad clients”, I started attracting more of the good ones.. and my business has been doing extremely well. Not only have I been generating more revenue but also got rid of the negative energy in my business. I’m not drained anymore, love seeing all my clients and they respect what I do for them!
Cecillia – Have you seen a bottom line (cash) benefit? Have your costs decreased and revenues increased? Just curious how it affected your profits.
Hi Jacci – I don’t think Mike meant only the difference between you liking the client or not, it’s not only about the personal feelings. The good client doesn’t need to be the one you personally like at all – it’s just a client who gives you the best return on investment. By the investment I don’t necessary mean only money although you mentioned money in your comment. Let’s say you can only take 10 clients a day and 5 of them pay 2x whereas the other 5 pay only x. It’s better to focus on getting the 10 best clients who pay 2x than using your time to work for the x client. As I said before, it doesn’t need to be about the money at all, this is just an example – your investment can be time, money, risk etc.
I went ‘old school’ with my new marketing campaign in targeting my exact audience, what they wanted, their issues and solutions they wanted and even worked for one for a period of time to better define their needs and language that I would not have known otherwise. Result, I’m very focused, deeply know my target market and am going for it. Of course, ran into a few ‘dumps’ on the way but still learned from that experience too so it won’t happen again.
I am already living and breathing this philosophy!
Please share more details? How are you doing this? What have been your results? What bad experiences (if any) have you had?
Mike, this is spot on. It reminds me of Robert Ringer’s (author of Looking Out For #1 and others) term “Drain People,” those in your personal or business orbit who do nothing but enervate, rather than energize, you. There is a straightforward analytical analysis of this also. Imagine that, to accomplish Project X with your best client, it takes you 100 hours of work. Now, imagine exactly the same project transferred to a terrible client, where it takes you 300 hours of work. If you work on a fixed-price basis, that’s a 67% cut in your revenue. If you work on an hourly basis, then you’ve lost 2 new projects with 2 new clients, each of whom would have been a great reference. So you don’t lose the money, but you lose great references as well as psychological health, not to say your ability to more easily get additional new business with those new clients. Think of your clients as the equivalent of a 53-man football roster (just with a smaller number). Are you going to cut the underperforming players or just give them a spot on the team at the expense of a better player? Opportunity cost always matters.
Steven – Thank you for this. And thanks for helping quantify the costs of “opportunity cost”.
And I love the analogy. A winning team, stocks up with the best players who compliment each other… and to be brutally honest, the most attention goes to their best 24.
please send all your dumped customers to http://www.reminicents penny bracelet.i can sure use them and i am thanking you in advance.
LOL! You got a deal! Just one warning, the last dumped client (names will NOT be named) was convicted of fraud. So, just a heads up.
Is this evil? I have a coaching client where our most recent project has produced 540 new leads (they have actually thrown out 700 or so that didn’t make the cut), and 2 of those leads produced a 5 figure and a 6 figure gig so far. So as you can see there are definitely many more leads than they can handle.
On the same coaching call we were dealing with a competitor that has been so annoying, outright copying their marketing collateral, etc. A cease and desist letter is involved, etc.
So my suggestion was to take 100 of their worst leads — those bottom feeder leads — you know, the ones that invite sales people out to kick the tires, try to learn everything possible, and then don’t buy and go with a competitor or a do-it-yourself option in the end? Well take those and proactively refer them over to the competitor. Who knows? Those red light rated leads might turn into a big fish for them? Right? It should keep them busy for awhile, long enough not to meddle in our sandbox anyway. Thoughts?
This version is: Clone the Best. Refer the Rest. 😉
Refer the worst clients (the really nasty one… if you have one) to your worst competitors, perhaps.
Mike–would you suggest cloning the best first before dumping the rest? Or vice versa?
I can see how shifting your marketing to attract more of the best would bring in better clients and you could dump the rest as you replace them with the best.
On the other hand if you dump the rest first, then you’ll have more time to focus on replacing them with the best.
How would you suggest a business decide which way to approach this from a practical standpoint?
Great post Mike!
Jarom – This may sound crazy. But first dump the worst. Not all of the worst, just the worst one. This is the client who generates the least money and costs you the most time and effort. Net effect, they generate the lowest hourly return.
By dumping them, you are free now to go to your best clients and do more with them (you have the bandwidth) and if there is no more opportunity with them (surprisingly, though there often is) you have the time to find other clients just like them.
In some circumstances, companies actually lose money on the worst clients. In other words it ends up costing money to keep the worst of the worst.
Would you agree? Meaning do you have a horrible client that creates no positive cash flow or nets you barely anything on an hourly basis (divide revenue by hours spent) and is a big emotional drain?
That sounds like a good plan to me. Luckily I’ve structured my business so that I can avoid soul-sucking clients. I use to have clients like that, but no more.
I would have to disagree with those who say this is a poorly thought out post. I read Mike’s Pumpkin Plan and have been working on implementing it into my business and it really does work.
I do see how you could think this can’t work… turning away business sounds like a bad idea, BUT when you spend more time with your best clients (or clones of your best clients), you earn more revenue and it’s easier to earn it. You don’t have to spend tons of money on marketing because your best clients do it for you (seriously!).
Think of it this way, you only have X hours out of the day to work, so why focus on the PITA clients that yield little or no revenue when you can be focusing on clients that LOVE you and your company and are easier to work with. A lot of people THINK they’re making bank just because they close a sale, but if you look closely at your numbers, you’ll see that the PITA clients are usually COSTING you time & money… this was the case for me.
It literally has changed our business completely. Even though we looked like a really successful company on the outside, we were hurting badly with cash flow … why? Because we couldn’t say no to customers … we took on EVERYONE that called for a computer/tech issue and spent tons of time in unbillable hours with those people with their petty IT issues only to find that they want a deal too (less revenue for us), instead of focusing on our important clients that pay us right away, and don’t care what we charge per hour because we have an awesome reputation and they know their stuff gets done right, etc. Because of this, our accounts receivable were HUGE and it was causing us to get behind on all of our commitments, and myself and my staff were totally stressed out.
When I implemented the Pumpkin Plan I was SO excited to fire our bad clients and did so with ease (when you get close to your breaking point you find this pretty easy, trust me). I immediately started focusing on our top clients, and you know what … they use us MORE now than ever before (more $$$) and they’re also way happier (they were already way happy but now even more so and they feel more appreciated). What’s more, we received some pretty awesome opportunities that have arisen just because we spent more time with them AND they’re referring more clients to us that are just like them… all of this without spending a DIME on advertising/marketing.
I’m not going to lie to you, it felt amazing to fire our bad clients. Since I own an IT business there are certain people you just don’t want to deal with because they don’t appreciate it or they don’t think that they need to pay for talking to you (especially if you fix it in 10 minutes) but we have to remember that we are in business to make MONEY not to be everyone’s friend. You don’t HAVE to help everyone … remember, a jack of all trades is an expert in nothing.
Our overhead is decreasing dramatically… for example, we dropped out of every single networking group we pay for/belong to and business has actually IMPROVED more now than ever before, we have more time to focus on what’s important and we are SO much more organized. We say no to people often – we refer people that are not a good fit for us to other IT companies in our area,
I’m not dogging people that disagree with the post, but I will tell you if you focus your time on people that don’t appreciate you or are a PITA client, your business will eventually fail, either that or you’ll get burnt out, I came close to it so I can speak from experience… we don’t have to be a jack of all trades to turn it into a huge profit generating company… look at Apple for example – they know EXACTLY who their customers are, they go after a certain demographic and do it well, their products practically sell themselves … they don’t come out with a $200 laptop like Dell does, because their target audience can afford to spend the $$$ to buy the quality that Apple is known for. Know your brand, know your target audience and then go out and get them.
Since implementing the Pumpkin Plan about a month ago I am happy to post that we are:
1) WAY more profitable
2) I am getting more sleep and exercise and free time (isn’t that the goal of being an entrepreneur anyways)
3) I am happier than I have ever been
4) Our clients love, love, LOVE us
5) our accounts receivable is ALMOST to 0! 🙂
Whew, that was long but I had to post my experience so people would quit drinkin’ Haterade on Mike 🙂
Jason – Thank you so much for this detailed feedback. May I as a few more questions to understand that gains? I will assume you said yes…
1. How much revenue did your “worst clients” bring in?
2. When you fired them how much time did it free up, for that revenue you lost?
3. What was your AR prior to doing this, and how “old” were the outstanding stuff you needed to collect?
4. Am I right to assume your worst clients were dragging out the collections on you?
Sorry for my delayed response haha, here is the info though:
1. They weren’t bringing in much in billable hours, maybe a few thousand dollars, but were sucking the life out of me and my staff with constant calls, emails or requests and didn’t want to pay or didn’t think they needed to pay for those requests, calls, etc.
2. It freed up a ton of time and we were able to narrow our focus down and I actually had free time for once but I spent it on marketing to clients like our best clients
3. We had around $8k per month in AR that we never seemed to be able to collect, it was always rolling over each month, we only did about $12k per month in revenue, so it was literally crippling us and our operations… I was constantly pulling money out of my savings or somewhere else to pay for things, when we should have had more than enough money to do so.
4. Yes, they were absolutely horrible about it. We had clients that wanted immediate service but then would literally take MONTHS to pay. After reading your book I put a policy in place that requires all new customers to have a credit card on file with us if they are a commercial account, if they are residential customers then payment is due at time of service, absolutely no exceptions. Because of this, our AR is down to about $1k now just due to chasing after money we’ve already earned before the policy was put in place.
I also updated our website to say that we are an award winning technology company that serves select businesses in our area. That alone has caused people to want to be a client of ours.
Thanks.Tactically invented.Well said.
Woops. Thanks to the virtual keyboard, the email address went in wrong on the post.
Did it virtually call me a bad name too?
This is such a critical, but difficult practice to incorporate in business (especially for young/startup type companies). So often we think we have to take whatever we can get – which seems to make sense when just getting started – but quickly we find ourselves with a full plate of clients that make us want to pull our hair out. We feel stuck because we think we need the income, and don’t recognize that by freeing up our time, we could take on more worthy clients. I’ve espoused this idea with my own clients for a while, and when Mike’s book came out, I re-doubled my efforts (because now there was a BOOK that said the same thing). My clients were more open to taking the advice, and we’ve seen some phenomenal results.
One client dumped an entire lead venue (that she felt was giving her great exposure, but was paying her next to nil). She’d been leery about dumping the “client” because of all the contact she was making there. When she finally acknowledged that all the leads in the world weren’t making her any money, she was able to drop the venue and focus her efforts on more of her Perfect Fit Customers. The immediate result was a drop in blood pressure, and some time freedom (since she was committed to a 6 month contract that required her presence each month). In the three months since then she’s opened up an entirely new product line, and attracted at least half a dozen new (paying) clients that have greatly improved her bottom line.
Another client just started her travel business in May, and booked a bunch of wedding expos to help generate leads. While she got a lot of interest, she got more bridezillas than paying clients. Since she doesn’t get paid until AFTER they travel, it was getting to be a lot of time investment on the front end, with no commitment on the backend. Despite the fact that she plowed thousands into advertising for this client type, she’s shifted her focus to family vacations and corporate travel – and got her first $1000 commission check this month.
It takes courage to be willing to cut some people out so that you can focus on more of your Perfect Fit Customers, but my experience has shown that the payoff is substantially better in the long term if you’re willing to take that step.
Funny — I just wrote about this same thing today, more or less.
The temptation to want to serve all our customers is pretty strong, but you’re dead right that by focusing on those we actually want to keep and serve, we strengthen our business for all the clients, all the customers we have!
And, as a bonus, our team is happier because they’re not off dealing with those lousy customers any longer.
I agree – focus brings amazing results. I love the comment about your team being happier. Did you tell them in advance, Bret, that you were dumping bad clients?
In the case I’m thinking of no, but afterwards — boy were they happy to hear about it!
Yes, yes, yes! You gave me this advice years ago and now, after years of toiling away with my “worst,” I’m down to just a handful of “best” clients (literally, just one client who contracts with me on a regular basis, three who hire me only occasionally, and one client who I converted into a partner), and I’m booked solid until January of 2014 doing profitable projects that interest me.
That is what i am talking about! Just know with this commitment, will come growth and success. But there will be dips and challenges (I have never met someone that has had a challenge).
Here is a great quote I just heard:
All will work out well in the end. If it hasn’t worked out well, it isn’t the end.
Ok…so I tried to fire a client yesterday….but she refused to be fired :-). I was on the phone forever with her! Now I’m contemplating another strategy to get her out of my hair so that everyone will be happy. Wish me luck!
haha good one, good luck!
Chantelle, find someone else FOR her. Tell her you’re transferring her to this new service provider. Tell her that you simply don’t have the room on your calendar anymore, and that this person can take better care of her. Don’t give her the option to say no. Tell her it’s already done, and bon voyage!