Addition through subtraction

Snow and Ice Report - Director’s Note

Cutting clients can sometimes lead to better profits.

June 6, 2019

I talk to many different people both inside and outside of our industry. And a result of those conversations, I hear different stories and insights on what’s really going on in peoples’ snow and ice management operations. Often these are unique stories about successes and failures in business.

I had one of these conversations the other day and it made me consider all the conversations about why you would or wouldn’t work for certain clients.

There is a lot of pavement out there, and those conversations made me wonder why you wouldn’t focus your efforts on people you want to work with? I’ve heard countless stories about lowball competitors undercutting pricing and then not providing quality service. I question why you would work for a customer who hired a lowball competitor. Are their interests focused on quality service? Likely they’re not, since their actions indicate cost is the only thing driving their decisions.

What about that customer who is the constant complainer? You know their M.O. – they always want something redone and question your level of service. It’s as if they work extremely hard to find something to complain about and then they ask you to deduct that from the bill, or come back out and provide additional service. In the end, managing that type of client costs you more time and money.

“Why work with people who cost you time and money? Similarly, why work for people who don’t seem to want to be worked with?”

Why work with people who cost you time and money? Similarly, why work for people who don’t seem to want to be worked with? They are the accounts that wants to control the scope of work so tightly you end up with all the liability and very little revenue. Those accounts end up being a risk to your entire business.

This offseason, I challenge you to really examine your business. Evaluate your accounts and determine if they include good people to do business with, and maybe even rank them. What would your business look like if you eliminated the bottom 10 percent of your clients? Would the impact uncomplicate your life? How much stress would it alleviate? In the end, how much (or how little) profit do really get from these accounts? If you are honest with yourself, the bottom 10 percent contribute a bigger headache than they enhance your bottom line.

Instead, take the resources that serviced those accounts and allocate them to new properties that would be better partners and more profitable accounts.

The simple elimination of a small fraction of problematic accounts could actually be the most important growth decision you make this offseason.

How much happier and more profitable would you be if got rid of your headache accounts?