When Customers Aren’t Worth the Hassle

By Toby Dahm

Let me warn you, if you’re a salesperson, you’re not going to like this. Here’s why: the point of this article is that not all sales are good ones. There are some clients that just don’t fit, and forcing a square object into a round slot will result in failure.

The cost of this mistake is nearly impossible to measure, but it is very real. Some of the resulting consequences include:  (a) stress on your people (b) damage to your reputation (c) an inordinate drain on your resources, and (d) elimination of job satisfaction. I could list others, but you get the idea. An ill-fitting client is a drag on your company in many ways. It will slow you down, drain your energy, and remove much of the satisfaction that comes from serving a customer well.

What are the reasons that a client doesn’t fit? One common reason is a personality clash. This may be due to two individuals, but be careful that it’s not the result of strong cultural differences between your organizations. If it is purely personalities, this may be solved by changing the staff assigned to the account. This is easier done in larger organizations that have greater flexibility in this area. In my experience, if you are in a contentious relationship before closing a sale, you’re headed for trouble. This is the honeymoon stage, and the relationship will only become more strained once the deal gets closed and the marriage settles into the daily give and take of a business relationship.

Another reason is that you are incompatible with the prospect. If your skill set or processes are not conducive to the needs of the client, both parties will experience frustration. Among the issues that will surface is fear of the unknown. As a lender, if I have to step out into areas where there is unmanageable risk, or where I am ignorant, I become fearful. A fearful business partner is not what a client wants. If processing is the problem, the result will either be an inordinate amount of resources required to service the client or lower service levels than are acceptable to the client, or some degree of both.

I could go into greater depth on this subject because in nearly 30 years of business, I must admit that I’ve made my share of mistakes in entering into relationships that I shouldn’t have. There are many reasons and varying degrees of adverse consequences, but all of them were failures, resulting in either a measurable or unmeasurable loss to my company.

In this ultra-competitive economy, with sluggish growth and fierce competition, it is very difficult to let go of an opportunity. We must, however, remember the cost that comes with ignoring the problem of having a potential client that just does not fit our company. The pain of walking away now is far less than the agony of living in a bad business relationship.

Toby Dahm serves as SVP and ABL Portfolio Manager and assists in business development and is responsible for underwriting and managing of all asset-based loans.