What to Do When You Realize Your Customer Is Not a Good Fit

Customer service is a critical part of growing a healthy business. Every successful business owner creates an environment that attracts and serves the needs of Ideal Customers, regardless of her or his personal preferences.

But what happens when a customer is not a great fit for your business? What should you do?

I talk to service-based business owners all the time who feel overwhelmed by a desire to help everybody. They feel bad turning a potential client away.

“Maybe that person could really use my help,” they think.

“I could make a difference, even if it’s a little inconvenient,” they tell themselves.

When someone shows an interest in what we offer, it is very tempting to agree to serve their needs, even if results are unlikely to be positive.

Here’s how this can look:

• A potential customer asks if you offer a particular product or service that you have never provided before. You now have to decide whether to add a new service even if it doesn’t match your company vision and mission.
• In response, you commit to serving the customer’s needs—before you conduct any due diligence.
• You may cancel an important family commitment at the whim of a customer who is extremely difficult to please.
• You might even bend your ethical or moral beliefs in order to win and keep a sale.

When we compromise our philosophy in order to serve everyone, it often leads to flawed thinking and opens us up to threats. In every business decision, you need to properly analyze the risk. Constantly serving the wrong people can lead to unethical or illegal choices. It can also cause you to experience burnout, anxiety, and depression.

At its root, this idea that you must be Everything to Everyone comes from fear.

• Fear of losing a potential customer.
• Fear of rejection.
• Fear of not making enough money.
• Fear of not being effective.
• Fear of causing pain to others.

These fears can feed an internal conflict where we think “I have to, but I can’t.” Without a set of core beliefs and a structured to guide decision-making, your business may go in circles and never achieve the results you want.

If you try to serve everyone and solve all their problems, here is what could happen:

• The quality of your work will suffer.
• The outcomes will be less effective.
• Your availability to help people will diminish.
• You’ll feel exhausted.
• You’ll lose focus on the end goal of owning a business (which might be financial stability, wealth, generosity, luxury, freedom, recognition, comfort, etc.)
• Over time, your business may even collapse.

The truth is, not every potential customer is Ideal.

Helping “everyone” can dilute the value of your services or products. Instead of making a difference for people who can benefit the most, you’ll be wasting time and effort on activities that don’t move you toward your goals.

(For more on this topic, check out my 3-part series on Transaction Avoidance Syndrome.)

Identifying Ideal Customers

To solve the Everything to Everyone problem, start by doing some self-analysis. You can ask questions like these:

1. How can I tell whether my current customers are a “good fit” or not?
2. Is it possible to know which customers are “Ideal” before I commit to helping them?
3. What should I say to “non-Ideal Customers”?

I’ll talk about these 3 areas below.

1. Decide Whether Your Current Customers are a “Good Fit”

The best way to know whether a potential buyer is Ideal is to know what you want.

When you think about the future of your company, what do you see?

Which goals do you have?

Where do you want to be in 5 years, and in 10 years?

What does that future look like, feel like, and sound like?

What type of culture do you want to develop for your business?

How do you want your customers to experience a transaction with you?

Example

Let’s say that you’re a healthcare practitioner, and a new potential patient calls to schedule a consult. She is referred by a current patient who has been a joy to serve.

But you quickly discover that this new person may not be a good fit.

Maybe she…

1. Has a condition that doesn’t fit your area of expertise
2. Is unlikely to respond to treatments you provide
3. Does not respect of your policies and procedures
4. Refuses to complete the initial paperwork
5. Doesn’t agree with your core values and philosophy
6. Is dishonest about her symptoms and health concerns
7. Arrives late to the first appointment
8. Can’t afford your services
9. Is resistant to paying on time
10. Complains a lot, and seems impossible to please

What should you do? There are two options.

You could accept this patient and do your best to make her happy. There is a strong possibility, however, that this could backfire.

Or you could take a gentle but firm stance (a balance of Yin and Yang) by explaining the boundaries of what you promise to do, and what your patient is expected to do.

Business boundaries are clear rules about your business operations that you create and enforce in order to make sure you’re moving toward your ultimate goals. To be most effective, you can weave these policies and procedures into your customer onboarding process. This helps you to avoid confusion, hurt feelings, and potential lawsuits.

Read more: The Ultimate Strategic Planning Framework Tool: Introduction

2. Know Which Customers are Ideal Before Agreeing to Help

One of the perks of owning a business is the freedom to do whatever you want.

But there’s a flip side. Every business relies on its relationship with customers. If the customer doesn’t feel satisfied with the value of services or products you provide, they will take their money elsewhere.

Although business ownership can give you tremendous flexibility (infinitely more than is possible as an employee), it is also keenly affected by you: your personality type, strengths, learning style, communication style, and attitudes toward risk.

Your business success is dependent on your ability to establish healthy boundaries and to build strong relationships.

Relationship building is not always a naturally occurring strength. In fact, it’s one of the four categories in StrengthsFinder (a useful assessment that I recommend to all of my clients).

In order to engage and connect with an Ideal Customer, you need to know who will most benefit from your services, how that will translate into profit, and who you enjoy working for.

Think back to the customers you have served in the past year.

• Who were you most excited to see?
• Which customers were completely satisfied with your work?
• Did you feel good about helping certain types of people?
• If you could only choose a few customers and multiply them, who would you pick?

By now, you should be getting an idea of your Customer Avatar: a composite of the qualities and characteristics of the type of person who would be a great fit for your business.

3. What to Say to “Non-Ideal Customers”

Successful business owners understand that:

• Not every potential customer will agree with your philosophy.
• Not every potential customer is best served by your expertise.
• If you’re a healthcare practitioner, not every potential patient will commit to the course of treatment, medications, and follow-up you recommend.

Saying “no” can be really difficult, especially for someone in the healing profession.

When someone seeks your help but doesn’t fit the criteria for moving the needle toward your strategic goals, they are not a good candidate. As painful as it is, this type of customer should be gently but firmly directed elsewhere.

Here are some options you could offer someone who is not your Ideal Customer:

• Recommend a different specialist. Don’t feel guilty for saying, “I’ll refer you to a wonderful [colleague, doctor, therapist, expert] who might be a better fit for your needs.”
• Offer limited services for a specific time frame. You might invite the patient to attend a community event, or limit your care to a short visit or type of service.
• Require payment upfront. If you have reason to believe the patient will be unwilling or unable to pay on time, make it clear that payment is required before they schedule an appointment.
• Create a detailed “Practice Agreement” that clearly spell out your policies and procedures. This is can be part of your standard customer onboarding process.
• Charge a premium fee. In my experience, discounts tend to cheapen the perceived value of a service or product. By charging a higher price, the customer appreciates it more and often perceives the value as much higher than if it were offered at a lower cost.
• Provide limited services pro bono. Consider offering services at either full price or free (also called “pro bono”). While you may offer services at no charge, it’s essential that you convey the full value of what the customer is receiving. I recommend limiting pro bono services to 5% of your total volume, with 95% of services billed and paid at the full amount.
• Consider a cash-based practice. Rather than relying primarily on insurance claims and lower reimbursement rates, consider the many benefits of charging your clients a cash fee instead. This method will change your perspective on money. It will also enhance your clients’ perception of the value they receive, as well as their commitment level to getting treatment.

Using the steps above, you can clarify which qualities are essential in an “Ideal Customer,” the process you can use to identify them, and process to limit your availability to serving only people who can benefit from your expertise. Creating limits will position your business to make a substantial profit… which will result in more freedom and quality of life for you.

Are you wondering how to tell where profit leakage could be happening in your business? Let’s talk. Find out more here.