The often-referred-to “20/80 rule” is especially important when you’re reviewing your customer list. If your business is like most others, 20 percent of your customers account for 80 percent of your business. And it’s likely that the 20 percent who spend more are more apt to pay their bills promptly, demand less service because they’re more business-savvy, and often less liable to make a fuss when you have to raise prices.
Keep that 20 percent happy. Don’t ever take their business for granted. To service the important 20 percent, you may find you have to get rid of some of your small customers. This may not be a bad thing, because it’s often the little guys who use up your service time. When you add up all the costs generated by a small customer, you may very well discover that sales to him don’t generate enough profit to cover those costs: he’s not making money for you — he’s costing you money.
It’s a judgement call on your part. If a small customer shows no promise of growing into a profitable situation for you, it just may be time to let him drift away.