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Unprofitable Customer - When to stop caring of useless customers

Unprofitable Customers- When to stop Caring about Them.

It has been a common and prolonged belief that “CUSTOMERS Do THE BUSINESSES.” This belief is true and has been accepted by the societies, businesses, corporations, and governments. Customers are the one who brings it what the business needs that is REVENUE. Any harm to their needs, interests, and choices will cause direct impact on future cash flows which is expected.

Some customers are termed as regular and consistent dealers for the business and sometimes referred to as “Key Customers.” However, some of them just do one-time business, and because of some bad experience and quality, they decide not to be entertained again by the relevant business.

Key-Customers contribute heavily to the revenue and business needs. Companies tend to give extra and undue favors to their key-customers as they are the ones who are running out the businesses. Because of these favors and extra-benefits customers tend to become complacent towards companies policies, and they have made their mindset in the like manner. Continuous favors and extra-ordinary compromises may lead to potential loss of other customers as they may seem that they are not preferred the way other key-customers are being treated.

Because of this discrimination, other customers who deal often with the business tend to lose. That is the point where businesses need to revise its policies about discounts, promotions and offers towards key-customers and should become a point where these customers should be treated at par with other customers and should not be extended extra favors.

Unprofitability starts when one customer is not contributing the way it was expected of him at the initial level as such customers will directly hamper the cash flows of the business and will result in a potential loss. If some customers are behaving the way we have expected of them, then these customers should be allowed to be given credits, promotions and all premium offers to make an adjustment of their impact on other customers’ behaviors and mindsets.

If some customers have a good relationship with the business, and they are also contributing to the good of the business and then suddenly they fail to pay their installments due with related interests, this shall be the point where business policies over such customers should be revised, and they should be appropriately followed up, and remaining money shall be recovered. If, however, due to any available indications it is confirmed that the costs of follow-ups and recovery may surpass the money to be collected from such customer, then it shall be assumed to have caused loss of revenue to the business and has become unprofitable.

Courtesy, care, and consideration towards customers are inevitable elements in building a long-term relationship, but these elements should be discontinued when the customer in any way harm the business prospects or has gone against the business in the courts of law. At this point, potential measures such as appropriate legal response and self-interest should be focused.

Considering the quality and consideration of the products and services rendered to the customers, caring should come up with it up till the level it gets the job done for the business. If caring and consideration are just for the sake of information they business should adopt measures to limit their information panel and caring side towards those limited number of users who can be approached and are assumed to behave the way the business wants.

However, despite the above facts, it is highly recommended for the businesses not to lose out for their caring and consideration side as it will be a deciding factor for those who are not profitable to the business now but are expected to become profitable due to friendliness and common nature it shares with the customers.

About Tayyab M

I love to talk about global tech-happenings, startups, industry, education and economy.

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