Credit Matters Blog

All Customers Are Equal

Kim Radok 24 August 2016


All customers are equal, is a business ethos which causes a great deal of angst in management and sales teams.  Whilst it is good ethos to espouse, there are certain impracticalities. For instance, major customers require greater focus because of the size of their sales and strategic importance to the business. The other smaller dollar valued customers also deserve to be treated equally well due to other factors. It is by managing these two diverse groups of customers properly which allows a business to maximise the opportunities to make a profit.

In my experience, many major customers may be the most unprofitable based on dollars per sale made. Today for instance, many larger businesses resemble a government bureaucracy rather than a business. They have so many rules relating to how they buy and then pay you. In addition, if you have any issues, no one seems to be responsible for a decision. Finally, their use of technology makes any proper communication between human beings almost impossible.

Many customers with smaller sales can often be quite profitable if managed properly. It is also not unusual to find many of these smaller customers grow to be a larger business later. Alternatively, the first sale from other customers may be low in dollar value on the first occasion, however those same customers may also return to make a larger purchase.

There are four primary reasons why dealing with all customers equally is important.

First, the old business and wealth accumulation adage applies; "Don't put all your eggs in one basket!" Deal with only a few large businesses and you risk the survival of your business if one of them goes has financial difficulties. Not even the largest of corporations seems to be immune from falling sales and doubtful financial integrity these days.

Secondly, on a local and global basis, we note sales in many markets are diminishing or the profitability of sales made, is falling even if sales increase marginally. In such environments, sales, even small ones are like gold. In tough times, when business becomes desperate for sales, management will endorse every sale if it leads to a profit. Of course, alienate the small customer the first time, and the opportunity for the next sale disappears.

Thirdly, all customers are difficult to work with at times. Larger dollar valued customers cause equally as many problems as smaller customers. The nature of the problem may vary and the number of problems substantial. Whilst sales may complain about the work in selling to small dollar valued customers, there are issues with larger customers which can cause just as many problems.

Fourth, if your employees believe one set of customers are more valuable than another, an insidious disease develops in your business. This disease is the one where the need for quality customer service starts to erode within your employees' minds. Once this happens, your business is in trouble. In a world where customer service is often mediocre at best, and appalling in other situations, delivering quality customer service with a smile, is an essential advantage.

The truth in business is: all customers are equal. The way your business deals with this truth is often the difference between survival or success. On a number of levels, major customers do require special attention. On a number of different levels, your other customers require equal attention. When sales are tight, the smaller customer is only available to sell to, if they believe their custom is valued. Get the process right for your business, and all customers will be available for future profitable sales.