Some of Your Customers Are Thieves - Kick 'Em To the Curb

Picture this. Your doorbell rings. Two guys wearing ski masks are standing there, holding big black bags. They ask if you have any money. You say that indeed you do, then invite them in and ask if they’d like a beer while they ransack your house. You chat them up as they stuff your prized collection of DVDs into the bags. You hold the door for them as they carry your new wide-screen plasma out to their stolen truck. You follow them out and hand over a stash of rainy day cash they’d missed, then wave as they drive away, laughing their asses off.

Insane, isn’t it. More likely your house has chain locks and web cameras and a pit bull named Spike, not to mention an alarm system straight out of a Bruce Willis flick, and you’ve never departed your house without leaving the TV on, full blast.

So let’s get real. Chances are you’re doing something just like this in your business. Okay, maybe not with a cold beer, but you’re inviting total strangers in that are robbing you blind. They’re called Non-Paying Customers, and chances are they really are laughing their asses off as they drive away. They’re not thieves, per se, but the effect is the same: they come, you invite them in, they take from you, then they leave without paying you a plug nickle, or at least the full value of what they’ve taken. The more this happens, the more money you’re losing.

The equivalent of our metaphoric pit bull named Spike is a new attitude on your part. It begins with the understanding that there are three types of customers out there: those that pay, those that don’t pay, and those that don’t show up at all. Obvious? Perhaps, but don’t take this lightly. Because too many businesses, especially new businesses, are so hungry for customers that they happily take in anyone who happens along, paying or not. Serving them may help some of your numbers, like revenue or hours billed, but it if isn’t stuffing your bank account full of bottom-line cash, its bad business.

But wait, you say. Any customer is better than no customers, right? An easy assumption, but it’s wrong, and it’ll cost you. Because every minute you spend with a non-paying customer is a minute you could be spending with the real deal, which means you’re taking a double hit: not only are you expending time with no return, you’re sacrificing valuable time that should be bringing dollars in the door. For every minute you waste on a free-loader, the equivalent minute spent on a paying customer costs you twice the time for half the money that you should be earning. Any way you cut it, that’s bad math and bad business.

So let’s look at those three types of customers again and put them in order. Paying customers are great. No customers, that’s actually fine. Non-paying customers, not good. How can no customers be “fine?” Because you’re not expending time and incurring costs, which is the case with non-paying customers. Which means, you could instead be investing this non-revenue time in building your business, looking for real customers and contributing other value-adds.

It’s gut-check time. Are all your customers paying their way? Get real about this and separate the wheat from the chafe, and then send the chafe packing. Or better yet, convert them to paying customers, whatever that means in your business. If they walk, say thank you before the door hits them on the butt as they leave, because you’ve just freed up time to make your business better in other ways. Better to not render a service or incur a cost with no ROI than to not get paid.

You’re probably thinking this is easier said than done, and you’re right. But it’s worth the pain. Look closely at your client list and ask a few tough questions about what you see there. Do they pay you willingly? Do they shout out when they have a problem, allow you to fix it, and then pay you for your time and effort? Or do they act like they’re entitled to your time? Can you get them to pay using a method that is acceptable to your business? If the answers are no, then you need to learn to say the same thing to these customers: no. It’ll be awkward, it’ll hurt like hell, but it’s like getting a shot – it’s all for the best, and it’ll heal what ails you in the long run. The good news is that they all won’t run for the door when they sense your new get-tough attitude, and for those that stick around you’ll have turned a bad apple into apple pie.

Remember, you’re in a game in which winning or losing is a bottom-line proposition, not a numbers-through-the-door statistic. At the end of the day, all that really matters from a business perspective – not to undervalue the personal relationships involved – is how much money you have in the bank, not how much is owed to you. Look for and cultivate solid paying customers, and nothing else. The non-payers, those thieves at your door with the ski masks and a bag, need to be converted to non-customers instead of being invited in for that glass of wine and access to your jewels.

So now you know. Start kicking the dead beats to the curb and bolt the door behind them. When you do, you’ll have the time and energy to be a more gracious host to your honored guests, the ones who pay their bills, ones to whom you’d happily give a cold beer. Who knows, you might even want to change your name to Spike.

Give this a try ...and you are on your path to a successful launch!