Stop Losing Sleep over Bad Customers! (Here’s How)

Today we're going to talk about when you should actually fire customers and how you can use your pricing to make sure you're only serving your best customers. My name is Mike Andes, I'm the founder of Augusta Lawn care. We have 150 locations around the world. And today we're talking about bad customers. Ones that cause you to lose sleep at night. They make you mad, they're mad at you, you're mad at them. Bad situation. The main kind of areas that this can sometimes fall into with bad customers. First off, customers that are bad at paying, if they don't pay on time, guess what? The only reason I'm showing up and doing work at your property is not cause I love you. It's not because I enjoy doing the work, it's cause I want money. And if you're not gonna pay me and you're gonna have overdue invoices, you're out. And so if you gotta fire a customer like that, that makes total sense. Firing customer means getting rid of them. Second one is if someone complaining all the time. There's one thing to be like someone who is a little bit precise or a little OCD about their lawn, about their house or something being clean. But if someone's always being picky and they're complaining every single time, regardless of which of your crew is there and regardless of anything you do, there's a problem with it. And you basically have to bake into the price that you're have to go back to this customer's property and bake into the price. They're going to call your office like a gazillion times for every little task. Cancel them, they're costing you a lot more. And not just the actual hard cost of like answering the phone going back to the property. It's also the fact that you only have so much mental capacity, capacity to be able to put up with the garbage. And if they're taking up 50% of the capacity of garbage in your life as an entrepreneur, kick them to the curb so you can double the output of your business. Alright? Another kind of customer that's bad is the one that's like, you must do this. These are people who have certain requirements around your crew or your equipment. You must use this certain type of mower. I only want this certain crew member to show up at my property. If someone's gonna put those kind of demands on my business scale. Sorry, you ain't the right customer for me.

He was dirty. I mean, the guy was filthy, he needed to wash his face. He needed to do something with his beard and his shirt and his pants were just. He was filthy.

Yeah, yeah. The reason for that is because if I'm gonna create systems in my business and be able to scale up and grow, I need to be able to have interchangeable parts where no one customer can tell me when to show up, who's gonna show up, or how I'm gonna do the job. And if I would have told him that I was the boss, I would have chewed him out for saying that our guys were lazy. Takes everything in my power not to like really go after someone when they say that, oh yeah, you hired me to get a result. And that might be take grass from being long to short. It might be taking, you know, orange walls and turning them white. It might be a host of different things that you're going to do for the customer, but they're paying for the result. How that gets done is my business. And so if they don't like that, I'm sorry, you're not gonna tell me how to run my business. Work order changes. Now in the comments below, let me know, which of these four do you hate the most? Cause these are problem customers, but I wanna know which one did I forget or do you think is the worst type of customer that you like to fire? Now, work order changes, especially if you have a lot of projects. The worst thing when it comes to project management is someone who's always changing their mind. You'll go in person and they'll be like, yes, I would like to this certain type of bush. And then they call the office and they change their mind. And then you show up with a property and they change their mind again. But not just the type of bush, but how many bushes and the size of the bush and the budget for the bushes. And it goes on and on and on and it becomes where you confuse your crew. As you grow the business, you're just gonna frustrate your team. If the people that they're serving are literally causing them to change their order of operations all the time, it could really make things messy because someone's always changing their mind. You can really break your business into two different parts. One, gonna focus on detailed or being personal. The bottom line is, regardless of what size of business you are, you have an advantage against your competition. Because if you are small and you're a one man band solo operator, you can really pitch the fact that you are doing detailed work and you're super personable. Now you want to focus on the things that your USP or your unique selling proposition. And when you're small, you can do very detailed work. And it is more likely that that you can put up with more of these type of customers simply because you are the only crew member. You only have one piece of equipment. The complaints, because you have so few customers, you can actually accommodate them. And because they're picky, you know, the preferences of every single one of your customers and payments aren't so bad because you're actually at the property of the customer every single time. And so these sort of issues are broken down way more. When you're smaller, you can usually put up with these type of miserable customers. And from a business perspective, I love all people, but they're miserable customers. But they're just easier to deal with when you're smaller because you can do very detailed and you can be very personable and customize. You can usually put up with these type of miserable customers. And from a business perspective, I love all people. So I talked about this first one. He's like a solo operator. Smaller business. And usually in your marketing, you're gonna be focusing on things like, you know, we're able to do custom jobs and custom work. We're able to do personal. We answer our phone ourselves, and you brag about those things. And as you grow your business, you gotta switch. And a lot of times people fail to make the switch because their branding and their USP is so based on this. So we got a large business. They're gonna have more systems, and they're gonna be more scalable. Now, the downside is they're usually not able to accommodate all of these bad customers because we have multiple crews, a bunch of employees, trucks, equipment, et cetera. So we're not gonna be able to have as much detail as personalization and customization. We're gonna have to create systems. And how do you create systems? Simplify. I'm just gonna do s. Simplify and standardize. That's how you create systems. And how do you scale? This is just a big fancy word for grow the business. As you grow the business and you get bigger, there's gonna be different things that you focus on. And then the question is, well, what do I do to ensure that as I grow from being smaller to being larger, what do I do about all the customers I've got over time that are a bit of a nuisance? They don't pay on time, they're complaining, they require certain little things. They always are asking for changes. What do I do? It's really basic. You ready? Two Words raise prices. If you raise your prices as you grow the business, you'll weed out all of these people. When you raise prices, it's not your best customers that leave. The ones that love you, that say great things, that always do, every single upsell, give your crew tips all the time. That's not the person who leaves. The person that leaves are these people, the people that change their mind all the time and what certain things then they're trying to tell you how to run your business and they complain and they never pay. Raising your prices is the way to delineate these customers, bad customers, from the customers you want to keep. When you raise prices, you're going to determine who values your service the most. And you want to be serving the people that value your service the most. So how do you get rid of the people who value your service very little? Raise prices to the point where their value is less than the price you're charging. And guess what they'll do? They'll fire themselves. Most recently inside Augusta Nation, there's a multi unit operator, has three locations, raises prices by $20 per cut on mowing across the entire thing. It's like, I want to say like 500 customers. Insane. He was able to immediately unlock over $20,000 per month in profit. Guess how many people left? If I remember correctly, it was something like 10 or 15 people out of the 500 left. Another owner operator inside of Augusta Lawn Care, another franchisee, raises prices. He's a smaller business, he has about 100 budget hours on the schedule per week. So I think it's like 120, 130 moeing customers, he raised his prices by 15%. Now the very first, the first owner that I just talked about that raises prices down in Texas, he raised his price by, across the board, just $20. In general, it averaged out to be about a 30% price increase. Now the other owner that's a little smaller, he raises prices straight across the board, 15%. Now the next question you're asked is, well, should I only raise prices on the problem customers? You could, but when you do a general price increase, what that does is it's going to eliminate the bad customers. And then all the customers that have a really high value of your service, they're going to continue to keep paying you and you're gonna make more profit. At the very end of this video, I'm gonna link up to another video talking exactly this topic. And that is when you raise prices, you are able to extract profit from the people that are valuing your Service way more than what you're currently priced at. But in this event, first owner raised it by about 30% across the board. A little bit more the second one 15%. The smaller operator only lost four clients out of about 120. Now again, what was his first thought when he did this? Man, I should have raised it more. And generally speaking, when you're raising prices, I recommend in order to sift the shaft from the wheat and get rid of the bad customers from the good customers, I want to raise my price by at least 15%. More like 20% is my recommendation. I would rather have less price increases, but do them in bigger steps and bigger increments. So instead of raising your price every single year by like 3 or 4% for inflation, just raise it by like 20% every few years. It's easier because every single time you raise price, it's causing that same angst and same unhappiness from customers that happens whenever they see a raise in price. Just peel the band aid off and do it more harshly every few years, but do it by at least 15%. I like more 20 plus percent in terms of price increases. As you grow the business from being small, being able to focus on detail, being personal, and having to scale the business up, it'll separate the customers that we're so attached to at this level because they were actually bad customers. So stop beating yourself up over customers leaving and churn as you grow the business. These are simply customers that you used to be able to serve well and now they are not a good match for your business. And by raising prices, you you'll separate those two parties, make more money and be happier. So watch this video talking about exactly that, raising prices and how you can extrapolate the most amount of profit from your customers.