If you follow the Duct Tape Marketing blog, you’ll know that one of John Jantsch’s core strategies for small business marketing is to define your ideal customer. Today he turns that notion upside down and asks readers to define who you don’t want as your customer. This is good advice. In fact, turning customers away can ultimately grow your business. Although this sounds counterintuitive, let me explain.

  • Honesty goes a long way. When you turn away a customer because you don’t think that you can serve them well, that customer is going to know that you are honest. Most likely, they’ll actually tell others about your honesty. Instead of taking on a job where neither you nor, ultimately, your customer is going to be happy and satisfied, you just created a reference account for your honesty and credibility – for free.
  • Satisfied customers spread the word. When you take on a new customer or client, you want them to be happy. You want them to be thrilled with the work that you do or the product that you sell. If you know upfront that you will not be able to satisfy a given customer, let them know. There’s nothing worse than an unhappy customer as these customers tend to spread the word about their negative experience. According to a Wharton study (free registration required) at least 31% of people who have negative experiences spread the word. You can turn these into neutral or even positive experiences if you make sure you can deliver what your customer wants.
  • Problem customers drain your time. Not only do problem customers generally take up much more of your time than happy customers, they probably don’t pay as well either. Often times you’ll find that you have to work harder and produce more to keep an unhappy customer than you do to keep a happy customer. Compound that with the stress of running a business with unhappy customers and you are not setting yourself up for a good growth path. Find alternative solutions for these customers ASAP and start figuring out how you can grow your business with satisfied customers.

Customer referrals are the backbone of most small business marketing (and big business, for that matter). Making sure that you are bringing on customers that you can keep happy will grow your business much more over the long term than going for the quick buck and saying “yes” to everyone.

Noah Parsons
COO, Palo Alto Software

AvatarNoah Parsons

Noah is currently the COO at Palo Alto Software, makers of the online business plan app LivePlan. You can follow Noah on Twitter.