S3 Blog

Every business will have their share of good and bad customers, but how do you go about finding out which are good and bad customers? Obviously there are some methods that are quite straightforward such as taking a look at your customer statistics and see how much money each customer has paid your business, and how many orders they have made. This will give you quite an accurate indication of how is a good customer, it is also worthwhile checking outstanding invoices too to see how much money is outstanding for each customer.

Here is what to look for when using your software tools to determine who is a good customer and who is a bad customer.

Good customers

1. Will always pay their invoices on time, if there is a problem with a payment a good customer will contact you prior to it becoming due and make you aware that the payment will be slightly late.

2. Place repeat orders with your business and choose you over your competitors when choosing products or services.

3. Give you their contact details when you ask for them – i.e. telephone numbers and mobile numbers, should you ever need to contact them.

4. Respond to letters that you send them if they need to. Obviously there is no need to respond to mail shots and other such communications, but if you need to send them a reminder letter if an invoice is overdue they respond straight away and settle the matter. Often this is just an oversight and the matter can be cleared up.

Bad customers

1. Will not pay invoices on time.

2. Will not respond to letters or phone calls if you are chasing up unpaid invoices.

3. Will often complain for no reason in order to try to get money off services and products.

4. Will place orders and then change them at the last minute, this can sometimes happen as a one off but a bad customer will do this many times and fail to see that they are causing problems by doing so.

If you find that after looking at these lists that you do have some bad customers you need to do something about them. Bad customers can cause you and your business days of headaches in various ways. They will not pay their invoices on time and they will find reasons not to do so time and time again. This then leads to you or a member of your staff wasting time chasing them up to make payments. If you find that you have a customer who is like this you really don’t need their kind of custom so you need to tell them that if they continue to behave like this you will be forced to stop trading with them. If this continues you must then tell them that you unfortunately have to cut all