Most people in her sector would ‘die’ to get a national chain of shops as a customer.
Having them as a customer is meant to open doors for you.
“Great for branding and profile” she was told.
“Feck that” says she and fired her biggest customer.
Does that sound insane to you?
Why would anybody fire their biggest customer?
Had a very interesting chat in recent days with Ciara (as always with these stories, I change some details for confidentiality reasons but the core messages are still true).
Ciara was in the ceramics sector. She built up a good name for herself, sold direct to customer and to other shops.
She was getting busier and was being encouraged to take on somebody to help her.
Something told her not to, so instead, she set aside a weekend to look over her numbers. She analysed her sales, her costs and the time she put into each job.
The resulting numbers and profit/loss per customer confirmed some suspicions she always had and also gave her one or two shocks.
As expected, some shops were losing her money, so she increased her prices and/or fired them.
Her custom pieces were profitable but the many tyre kickers who did not buy were an issue, so she introduced a minimum price here.
Her biggest customer, the national chain, was making her a profit but they placed huge demands on her time, so she fired them. And she was quite clever about it. If their average sale was €50, she increased her prices to €80 and they told her there was no market for them at that price, so she said “Thanks for the business – goodbye”.
After her analysis, she increased her prices by a factor of 2. While she lost a few customers, many others stayed. She got rid of the time wasters and ended up with fewer more profitable customers. At the end of the year, she had more money in her bank account and some quality time for her family.
I love this story for a number of reasons.
This story combines 80:20 and premium pricing, my 2 favourite topics.
Ciara showed balls in her approach, especially with the national chain.
She took the time to analyse her numbers (which very few business owners do).
She has a mind of her own. Everything that was meant to work in her sector, she turned on it’s head – supply a national chain, take on staff, supply shops etc. – no thanks.
She had the balls to fire her biggest customer, almost double her prices and now she is reaping the benefits with a bigger bank balance and more time to spend with her young family.
Want to know how she did it?
Selling prices and 80:20 are 2 topics I cover in my new training.
The good news for you is that the first part is “FREE”.
Just click on the link below to access this free training content.
P.S. Learn how one web designer increased her profits 6 fold.