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Brendan Egan

Toxic Clients: Choosing Quality Over Quantity

When you have a new business, you’re happy to have any clients or customers.  It doesn’t matter if they’re at the very low end of the price spectrum or if they’re the most demanding, difficult people in the world to work with.

But as you gain experience in your market and become more of an authority, you typically have some difficult decisions to make as your demand is higher than what you can supply.

You reach a point where you increase your prices yet you still have too many clients, so it now becomes time to inspect your current client or custom base to find those who are toxic.

What is a toxic customer?

Do you find that 95% of your customers call you once per month, but one calls you 5 times per day?  Or do you find that your resources are evenly distributed for all your clients except one who is using up 15% of your resources?  Depending on your business model and line of business, you may need to look at different factors, but a toxic client is simply one who just isn’t allowing your company to have the same profit margins as your other clients.

Credit card companies often cancel accounts for people who use their benefits too heavily.  High quality SEO providers often drop clients who are too demanding or have too high of expectations.  Accountants often drop clients who aren’t organized.  Every niche has something that makes a small pool of clients more difficult to work with or more expensive to work with.

As your business grows and you continue to gain experience, you need to constantly inspect your client or customer base to make sure you don’t have any toxic clients in there.  While these clients may have been great at first to get your business off the ground, you’ve now reached a point where your time is much more valuable to you and to your business.

Some people may argue that these very toxic clients are the ones who were with you from the beginning and allowed your business to grow.  While I see that side of the coin, at the same point if you want to continue to grow it’s important to make sure you only have beneficial relationships with your clients and aren’t stuck with those who expect something for nothing, who are hogging your time and resources, or who are downright difficult to work with.

Many people turn to being a small business owner instead of working in corporate America, so make sure you’re working with clients who appreciate your time, your work, your dedication, and who will allow your business to continue to grow.