Think the Unthinkable: Sack the Unsackable


We ate out a couple of times over Christmas – and I started asking myself some questions. Not the obvious ones: ‘Why does what your wife ordered always look so much better than what you ordered?’ And ‘Wasn’t it wonderfully cheap when both the boys were on the Happy Kidz Menu?’

No – a rather more important question, at least as far as business is concerned.

Why do I pay the same price for my meal on a Tuesday night as I do on a Saturday night?

We can go to a restaurant on a Tuesday night. It’s quiet, no problem booking a table, eat when you want to eat, all very civilised…

But when I ring up to book for Saturday night it’s a different story. “How many for? Two?” (That’s ‘two’ as in, ‘is that the best you can do?’) “Well maybe we could squeeze you in. We’ve a table at six or we’ve one at ten-thirty…”

Both of which are, of course, entirely unacceptable.

You drive past the restaurant a little later. Yep, fully booked. In fact they’re queuing out of the door. But inside people are still paying the same price for their chicken stuffed with blue cheese and wrapped in bacon as you paid on Tuesday.

Why? Whatever happened to the simple laws of supply and demand? Why on earth should a meal cost the same on a Tuesday – when demand is moderate – as it does on a Saturday, when demand is spilling over on to the pavement?

Because it’s unthinkable. “I came here on Tuesday and my steak was £15 and now you’re telling me it’s £20 but next Tuesday it’ll be £15 again?? Are you insane?”

Yes, of course the restaurant owner is insane. How can you possibly run a business that way? Except that some American restaurants are running their businesses that way, and they’re doing it successfully.

As I wrote in one of the last blog posts of 2013, what was once unthinkable – my entire music collection in my pocket – has now become commonplace. That trend is only going to accelerate in the coming year.

So may I once again commend to you a business practice that is traditionally held to be unthinkable, but which is nearly always profitable; not as painful as you thought it was going to be and which will definitely have you saying, ‘why didn’t I do that ages ago?’

Sack some of your clients/customers.

It’s a well worn cliché that 20% of your clients will account for 80% of your business. That doesn’t mean though that you can simply get rid of the remaining 4/5ths of your client bank – not least because some of them are going to be in your top 20% next year. But buried in the 80% will be clients who cause you grief: who don’t pay on time: who make unreasonable demands: who simply don’t bring any joy into your life. And so on…

I think 2014 represents a major opportunity for all of us. There are clear signs that the economy is recovering and the evidence – both analytical and anecdotal – points to a year where significant growth is possible. But you can’t do that if you’re wasting a lot of your time dealing with unprofitable clients – or profitable clients who simply suck the life out of you.

So January could be the month for some early spring cleaning and pruning. It’s not just you that needs to be leaner after Christmas; it’s your client bank as well. Think the unthinkable and sack some of the previously unsackable. And then treat yourself to a good meal to celebrate.

On a Tuesday night, obviously…

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7 comments

  1. Mark Greenhouse · January 10, 2014

    Ed, great thinking there, too many business in thrall to non profitable customers.

    But how about, working out why they are unprofitable and charging them more to recover the cost to you. They may walk themselves then, straight to your competitor.

    I worked for a business, albeit a large once that sacked 80% Of customers in a six month purge to refocus so it can be done.

    On the real unthinkable and maybe an idea for a future post – how about sacking yourself ( not you, obviously) but your clients from their own business.

    how would the business cope?
    how would they cope?
    who would step in, what would fail etc? at the business.

    what others interests could they persue? might give them ideas for business development.

    anyway great post,

    Mark

    • edreidyork · January 10, 2014

      Some very wise words from both Mark and Simon. Watch this space in future for a “sack yourself” blog – brilliant idea! Thanks guys

  2. simonjhudson · January 10, 2014

    I couldn’t agree more. Of course the best thing to do is sack them before they are customers – it’s much less painful for all concerned and lessens the risk of damage to your reputation. We won’t take on work where we can’t get on with the clients, they don’t buy in to our philosophy or they look like they are going to be a pain.

    The other approach – one I impeach my wife to do in her business (and she is gradually adopting) – is to price the job based on the client as much as the work to be done. We all find it too easy to discount when the client is struggling to find the funds, but how many of us do what the restaurateur proposes, which is to put prices up? However this may be not in response to demand but in response to pain of dealing with them/delivering that specific work/product etc. Increasing the price of the job to the point where the pain is worth it is a win-win: the client painlessly goes away, or you get paid over the odds for the deal or you create a framework for negotiating your terms of engagement – if it’s too much for them but they want you then you can insist on certain conditions such as early payment, no scope creep etc. before you reduce the price to the normal level. In fact we tend to operate a rebate system in the few cases it happens with us – we charge the extra and repay it or allocate it to their support contract if they meet their end of the deal.

    I like to remember that they need us as much as we need them – mutuality is a truism we often forget.

  3. tabderby · January 10, 2014

    A great Blog Ed!
    In essence sales has to be an integral part of the strategic plan and the top line considered in some detail, something so many business owners fail to do. Who you want, why you want them, what the life time of the customer could be, how you will price accordingly are all important considerations. Nothing beats sacking one though!

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