Strategies for Managing Directors

If You Are Afraid of Your Customer - Then They Own Your Business Kim Radok March, 2014

We operate in a business environment which seems to advocate that all customers' requirements must be accepted, if you are to operate a profitable business.

Unfortunately the advocates of such expressions rarely operate a normal business and usually have a vested interest in selling or marketing. As a result, many business people seem to place too little thought on the ramifications of their customer's requirements and whether the supply of these requirements allows them to make a profit.

The most obvious examples we have of these situations are:

1   when a small business deals with a much larger customer;

2   the customer advises they will pay you after their client pays them but they only tell you that after the goods or services have been supplied;

3  the customer changes payment terms from say 30 days to 60 days after again, you have supplied their goods and services;

4  the customer fails to pay you and you do not take some form of proactive action to collect the debt;

5  the customer advises you that your prices are too expensive and they want a discount, again after the goods or services have been delivered, etc.

If you are afraid to challenge the ultimatums of your customer to such situations and blindly accept your customers' terms of trade, in the long run, you do not fully control the destiny of your business.

The business owner, who is not afraid of their customers, will usually operate a far more successful business over the long term. Being afraid of your customer may keep you in business for a short while, but not necessarily for the long term. Therefore being afraid of your customer is not a great business model for success.

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