Are Customers Costing You More Than They Pay?
Many times we leave money on the table by not keeping track of what our true costs are in a given account. Fine tuning means that we take a hard look at all aspects of the operations including, labor (direct and indirect), travel to/from, equipment costs, complaints and quality control, supplies and what I like to call the “hassle factor.” By hassle factor I mean what does this contract require in effort, additional time and resources to keep the tenants/management “happy.”
I have learned over the years that oftentimes the poorest paying account is also the highest maintenance account when it comes to responding to frivolous demands. Many of my larger accounts were relatively easy to manage with reasonable expectations; whereas a small branch bank or other office was calling daily wanting something provided beyond contract requirements.
Unless they were connected to a larger account that helped to justify the additional costs, I simply asked for an increase. If the customer balked, I was free to go on to better opportunities. Amazingly many customers accepted the increase and even toned down their rhetoric. If you do not fine tune your accounts periodically you may miss the true costs involved in each one.
I suggest a “snap shot” where you intensively track all the time and resources going into one or more accounts for a period of time, such as a month. You can usually extrapolate from that data what the contract is really costing over a 12 month period. The only question you will have to answer is: “Is it worth it?” If so, continue. If not, work on an exit strategy for a win/win outcome.
Just remember that each account is different, not only physically but also in personality.
Your comments and questions are important. I hope to hear from you soon. Until then, keep it clean…
Mickey Crowe has been involved in the industry for over 35 years. He is a trainer, speaker and consultant. You can reach Mickey at 678-314-2171 or CTCG50@comcast.net.