9 Reasons you should keep cheap clients for your business
As a business owner, you are always looking for ways to bring in more clients and grow your business. But what if you could grow your business by keeping some cheap clients? When building a business it’s hard to determine a good customer from a cheap customer, the good customers are more likely to be persuaded by your competitors and the cheap ones keep asking for lower prices, so how does one build a business this way? When others may say drop that customer or that customer is not worth it, I say keep that customer, It may sound counterintuitive, but below I will list 9 reasons why you should keep some cheap clients for your business.
Why do customers have every right to be cheap:
Customers have every right to be price-conscious for several valid reasons. First and foremost, people work hard for their money, and it's only natural to want to make the most of it. Being cost-conscious allows individuals to stretch their budgets and save for other important expenses or future goals.
Additionally, in a competitive marketplace, businesses often offer a wide range of prices for similar products or services. Customers are right to seek the best value for their money, especially when they can find a product or service of comparable quality at a lower cost.
Moreover, the availability of information through the Internet has empowered consumers to compare prices and read reviews, making it easier to make informed purchasing decisions. In this digital age, it's reasonable for customers to be price-sensitive and make choices that align with their budget and needs.
In summary, being cost-conscious is a reflection of responsible financial management, and customers should exercise their right to seek the best deals and value for their hard-earned money.
9 Reason why you should keep cheap clients
1. They ain’t leaving: One thing about having cheap clients is that they have already been around the market, They tested new companies, and new vendors and you probably landed on that customer now, You can’t come into this customer business and expect them to change their ways now, I mean even if you lay down the cost of products showing them how much you paid for it they just don’t care! With my business when I had cheap customers I decided to try to build a relationship with them, not a friendship but a business relationship where they enjoyed buying from me, that didn’t stop them from squeezing me for every penny but it kept them with me for years and years…
2. Great reviews: As my business was new I didn’t have many customers and my Google reviews were pretty empty, I had a couple of good customers, cheap customers, and low-order clients, I didn’t want to bother my big customers so I didn’t ask them to leave a review only if they did voluntary, but my cheap customers I asked all of them one by one, and their reviews were pretty awesome!
3. Referrals: If you are not making enough profit from these customers Another way to try and benefit from cheap customers is by asking for referrals, these referrals can be anyone from next-door business or even friends and family, hopefully, this method can make you compensate some of your loses that you are experiencing.
4. Raises your business's gross sales: One thing we can all agree on is that losing a customer is bad for business, am I right? Put it this way, say you own a food distribution business and in year one your business grossed about $650k now that 650k didn’t come from certain clients it came from ALL types of clients, if you said you know what I don’t want these cheap clients I will find better customers, so you got rid of these 4 clients but now what will happen is your weekly sales will drop, here’s an example of these four clients were averaging weekly orders from you of $1000 a week that’s four thousand a week which is $192 thousand a year, your sales now may drop dramatically.
4 Benefits of Having Higher Gross Sales:
1. Business Loans and Credit Access: When your business demonstrates consistent or increasing sales, it becomes a more attractive candidate for business loans and lines of credit. Financial institutions often favor businesses with a track record of solid sales, which can help you secure the necessary funds for expansion, inventory management, or other operational needs.
2. Negotiating Better Deals: A growing customer base, including cost-conscious clients, can strengthen your bargaining position with suppliers. Higher sales volumes allow you to negotiate more favorable terms, discounts, or extended payment periods. These cost-saving measures can directly impact your profitability, enhancing your bottom line.
3. Increased Business Valuation: Over time, higher gross sales contribute to an improved financial profile for your business. When it comes time to consider selling your business, a history of strong sales figures can significantly boost its valuation. Potential buyers are typically willing to pay a premium for a business with a robust revenue stream, potentially resulting in a higher selling price.
4. Capacity to Hire and Expand: With growing sales, you'll likely find yourself in a position to expand your operations and hire more employees. This expansion can lead to increased production capacity, better customer service, and overall business growth. The ability to hire more employees means you can meet increasing demand, take on more clients, or even explore new market segments.
In summary, retaining cost-conscious clients contributes to higher gross sales, and these benefits extend beyond immediate financial gains. You gain access to financing, improve your supply chain arrangements, increase the value of your business, and have the capacity to expand your operations and workforce, all of which work together to foster business success and growth.
5. It Can harm your reviews: To tell cheap clients to go buy from someone else is risky, I highly don’t recommend it, I always suggest to my friends and business colleagues when they bring this topic up to me is exit the relationship the same way you entered it, you started with them happy leave happy, don’t piss them off because we are living in a world where reviews are everything!
6. Better than no customer: Beggars can be choosers, In business, you gotta be humble if the customers only want to be cheap but are paying on time and giving you business I think you should accept it, a customer is better than no customers when I started my first I was getting the customers that no one wanted and yea they were somewhat cheap but I accepted it I made a little profit and I still have some of them up to this day, so no complaints about me.
7. Just Keep it business: As you all know the saying business is business! Don’t get on a personal level with your customers or discuss politics, these are red flags when conducting business, even then your best customers will start to consider you not serious and will then start bargaining with you because you just made them your buddy…so make a sell and keep it moving!
8. They can buy elsewhere: The age-old saying "One person's trash is another person's treasure" rings true in the world of business. When considering whether to retain a customer who isn't yielding substantial profits, it ultimately boils down to a choice: do you wish to continue conducting business with them or not?
Essentially, if you decide to part ways with such a customer, they are likely to seek out another business or provider that better aligns with their needs and expectations. This decision hinges on your willingness to maintain the business relationship, based on factors such as profitability, alignment with your company's goals, and the value of the customer's patronage.
9. They may sell one day: I had a customer and that customer was ordering items from me, his orders were consistent but he always asked me to give him a free item or lower the price and I tried to keep going because I needed the business, fast forward 2 years later I walked into the business to take their order and there was a new guy inside introducing themselves telling they now own the business…yes I adjusted my prices to my original prices, sometimes patience is the key!
So, what are the benefits of keeping cheap clients? First and foremost, it’s important to remember that every business should have a mix of clients – some who are more profitable than others. Cheap clients can help you offset the costs of doing business with higher-paying customers. They also offer an opportunity for businesses to learn new skills and test out marketing strategies without risking too much financially. Additionally, working with challenging clients can make you better at your job and increase your resilience.
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