Prioritize you clients…A/B/C…

In a recent discussion with a young consultant, he expressed concerns about handling his ever growing list of clients. (He is obviously doing a good job…)

Having been at this game a bit longer, I suggested the ABC method for prioritizing clients. We used if for years, and it goes like this:

• All new clients start out as A-clients.
• If they pay promptly and are pleasant to work with, they stay as A-clients.
• If they delay payments and/or are a bit difficult, they become B-clients.
• If they are really slow paying and/or are very difficult, they become C-clients.

When the phone rings, you take care of the A-clients first, and the B-clients next. You try to cull the C-clients, unless you are desperate. In that case, you charge top dollar and get payment in advance.

I then shared the Pareto Principle (80/20 Rule) which posits that 80% of your business comes from 20% of your clients (A-clients), while 80% of your problems come from a different 20% of your clients (C-clients.). The numbers may not be 100% accurate, but the principle still holds.

A common mistake is to focus on the C-clients, who suck up too much time with too little renumeration. This is an easy trap to fall into. After all, we consultants are driven to solve problems. But at the end of the day, the consultations must be profitable and should be fun.

If you are feeling really Machivellian, you could refer your C-clients to competitors. Just make sure the competitors are not friends 🙂

Seriously, I do not advocate this – better not to sully your reputation among your colleagues.

If really bad clients, you can always fire them. This should only be done as a last resort, but if it needs to be done, then do so. Life is too short to deal with bullies or deadbeats.

Had only a couple of “firings” in my 30+ years of consulting — most of my clients have been a sincere pleasure to work with.

P.S. You are invited to my first free monthly teleconference.  Can’t make it? Please join us next month.

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