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Reading John Moore’s Brand Autopsy site had a great article on the costs associated with Demon Customers. Sprint recently fired 1,000 customers. To get to the fired list the customers had to call customer server over 25 times a month. Yes sir, 25 times in a 30 day month. Month after month after month. Out of 53 million subscribers, 1000 were causing a great deal of pain and we fired.

It got me thinking about real estate agents. What tricks do you all have trying not to take the listing from the demon customers. Or probably even worse, get in the car with a demon buyer. The costs associated with these customers in time, money, and psychic energy must be incredible.

Geoffrey Colvin, co-author of Angel Customers and Demon Customers: Discover Which is Which and Turbo-Charge Your Stock, said this in an interview at SalesVantage.com that John Moore linked to that makes an amazing point.

In our experience across a wide range of industries, companies typically find that the best 20 percent of their customers account for 150 percent of total profits! The worst 20 percent typically lose money equal to 75 percent of profits, while the remaining 60 percent of customers account for the rest. Knowing which customers are angels and which are demons presents an enormous opportunity.
Once you know the true profitability of your customers, you can figure out the reasons behind the numbers. For your unprofitable customers, you’ll have to face the reality that you’re not offering them a compelling value proposition - a way of meeting their needs so well that they’ll reward you with handsome profitability. You’ll have to devise new, better, value propositions for them, which our experience shows you can probably do. As a result, you’ll start to turn those unprofitable customers into profitable ones, which typically creates a substantial swing in the business’s overall profitability.
In the end, you may find that a small percentage of customers just cannot be made profitable. By the time you’ve figured out who they are, you’ll understand very well why they probably aren’t worth keeping.”

 Here is my mission for you if you are a real estate agent or selling any kind of product. Look through your work over the past year and do a quick analysis of your customers. I bet it would take 5 minutes as you find the demon clients that you had and wished never crossed your path.

Now think of what traits they share. I am sure there are a few that are in common.

Now when you prospect for new clients and you have one that shares these traits, take the time to disengage and head the other direction as politely as possible. Odds are you just gave yourself the opportunity to make a great deal more money and sleep better at night.

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