I've been in the screenprinting business for more than 13 years. It has always been a valued idea that "the customer is always right." This proves true more often than not. There are, on occasion, situations where it may be time to "fire a customer."
I know what everyone thinking. Why would you get rid of a customer? Customers are your bread and butter. That's how you make a living. Yes, that is indeed the case. But sometimes you will find yourself in a situation, whether by your fault, or the customer's, where you are losing money by continuing to do business with a customer.
I of all people have the hardest time telling customers "NO." This is a phrase that I have trained myself not to say. I was always a true believer that "NO" was something that a business owner should never tell a customer. After all... if you tell them "NO," they won't come back. If they don't come back, that is income lost. But, after long hours spent at my shop after 5PM and countless thousands of dollars wasted on mistakes that were ultimately not our fault... I have learned that somtimes "NO" is the best answer.
The stories on this subject could never end. I'll take a good one for example though.
When we first opened our business, we relied heavily on contract printing to survive. This is a good and bad practice. In our business we like to deal with "retail" customers, wherein we take the order, order the goods, embelish them with the customers design, and make a wholesale price margin for our services. In the world of contract printing you deal with a seller or sales person, typically a promotional products salesmen, who purchases the products and then pays you only for your labor to embelish the garments. Again, this is good and bad. It is good in the fact that you having typically continuous work as the seller is always out "making a sale." It is bad in the fact that you never know what kind of orders are coming in. Everybody likes their seller to come in with an 800 piece order you can turn a good profit on. But they hate to see the seller come in with 6 or 7 orders for 12 pieces, where the margins are so low you're simply working for a slave wage. Why even own a business if you are just going to turn yourself back into a glorified employee.
In no way am I stating that contract printing is not profitable, nor that you can build a strong business on that model. What I am stating is that it is few and far between when you find a salesman that is easy to work with, timely, organized, and respectful of the fact that at the end of the day, they are just a customer. In my experience, the salesman see you as merely his own personal print shop, where they can make demands, and tell YOU (even though you are the shop owner) what your schedule should be. They are not prone to compromise, nor do they care if your business grows or withers. They simply care whether or not their needs are met. In my opinion, as I stated before, this simply turns you back into an employee, only now you are an employee that has overhead and expenses to take care of so that you can comply with a salesman's own business needs.
CASE IN POINT: I worked with a local salesman for several years in the early stages of our business. I started out doing his artwork on a contract basis, and as we developed a business relationship he asked if I would like to start doing his printing. This should have been a red flag. He had a relationship with another printer in town for many years and I was aware of this. The salesman asked me if I would "price match" to another printers pricing guidelines. Being young and broke at the time I agreed, simply to have work coming in the door. So as I agreed to price match to what I now know is a terribly low pricing schedule, the salesman slowly started pumping his orders into my business as opposed to his regular printer. WOW! I thought this was great. Now I had a continuous source of income. After several months of building this, as well as other relationships with local promotional products resellers, I had built quite a client base of contract customers, and revenue was steady, but growth was slow.
It was at this time that we decided to create a new business plan for ourselves. It became apparent that we would have to shift the focus of our services from providing quality printing for local sales people who were eroding our base of "retail customers" and start providing our printing services directly to the public. We decided that we need to cut the middleman out and go straight to the public in a much more aggressive fashion.
And I will hold true to that principle: I will not help a salesman in my playing field build his business by using my quality products as a growth tool. If anyone is going to benefit from the quality of my hard work and investment, it will be our business, not a third party middleman, that will eventually use my own services against me to aquire a share of my "retail" customers. Contract printing is only beneficial if you provide it to firms outside of your local selling area - typically 100 miles is the minimum you should work with.
With our new business plan we began engaging in aggressive marketing on a public platform. It was at this time that they salesman whom I had price matched for, delivered shirts for free of charge, and worked many long hours for pennies on the dollar confronted me. He stated that I would need to cease all aggressive advertising as I would be targeting his customers, and he couldn't have that. He actually told me that I needed to stop all efforts to grow my own business because it would take away from his ability to use my services to grow his own. I understand his logic and concern, but I find it hard to believe he had the "balls," if you will, to tell me to stunt the growth of my own business for the sake of his. There are many other factors, much to numerous to mention that worked into a decision to phase this customer out. Repeated abuse of his privledges, and my kindness eventually pushed me to a breaking point.
It became apparent that this customer was costing me money, not making me money, and would eventually cripple my business with his unrealistic needs, terrible timelines, and disrespect for the fact that I was indeed a business owner, just like him. To this individual, I was merely a means to an end. As just as we thought, as soon as we stopped catering to his every whim, he pulled his business from us and went back to his old contract printer. After discussing the matter with the other printer (that I maintain an interesting relationship with - topic for another blog) he informed me, as I already guessed, that this had happened many times before. Sadly enough, my competition, that still prints for this salesman, has not yet realized the he is, and has been for many years, costing him money with his neglegence and inconsideration for other businessmen.
Should you fire a customer? YES, if they are costing you money and have no respect for your time or hard work. This can fall over into retail customers as well.. which we'll touch on next time.
