Cutting a Regular Customer Loose

[Swamp Yankee]

Directed to the other firewood sellers on the board,

Got two regular customers that seem to create more trouble than the earned profits are worth. Scheduling deliveries and getting paid has become a hassle with these two for the past few years.

It's always something, they don't reply to calls or emails, they need to clean out spot in back, the boat has to be moved, haven't picked up pallets at the shop, awaiting payments from people that owe them money, wife is out and she has the checkbook, would you take a widget in trade, yadda, yadda, yadda. Eventually the wood gets delivered, and eventually I do get paid, but compared to my other regulars, it's just a struggle with these two.

I've been reluctant to do anything at this point because they represent 11 cord in sales, but based upon deliveries and happy new customers that want to become repeats this year, even offering deposits for next year, replacing those sales will now not be a problem.

So here's the big question, how do you determine when it's time to cut someone loose and tell them to look elsewhere? Obviously non-payment is a no brainer but these two are getting into a gray area. My "Spidey Sense" is telling me the longer I deal with them the more chance a problem is going to happen, but I have no real justification other than they're a PIA to deal with.

Forgot to add, they both take special longer length wood than the normal 16 to 18 inch that I put up, so just selling it to someone else without a lot of extra work involved is an issue.

Take Care

 

[gunnusmc03]

80/20 rule

What is the 80/20 rule? The 80/20 rule, also known as the Pareto principle, simply means that roughly 80 percent of the effects of anything you might be doing come from 20 percent of the causes. For example, 80 percent of your sales are likely generated by about 20 percent of the items you carry or services you offer.

Let's look at three ways the 80/20 rule might be applied to maximize your customer base.

Don't be afraid to be selective when it comes to your customers. 80 percent of your customer service effort is spent on only 20 percent of your customers. If some of those "needy" customers are customers who don't contribute financially to your business in an extensive way, don't be afraid to make their customer service needs a lower priority. You need to provide "A" service to your "A" customers, but if you burn all of your energy providing exceptional service to your "B" customers, you may let down your top customers.

Know who your big spenders are. Hand in hand with that, 80 percent of your business comes from just 20 percent of your customers. In other words, you have regular spenders - people who use your business consistently and spend money there consistently. You'll also have a lot of very irregular spenders - people who visit your business once or on a very irregular basis. Identify the regulars and get to know them. The stronger you make that relationship, the more likely they are to not only stick with you in the face of competition, but also refer you to new customers.

Take care of your big spenders. So, let's tie those two points together. If one of your "big spending" customers comes in with a special need, don't be afraid to go the extra mile to help them out. In other words, focus on matching 80 percent of your customer service effort to the customers who provide 80 percent of your business.

Keep track of what advertising and promotion actually works for you. 20 percent of your promotion work nets 80 percent of your new customers. How do you know what promotions work best for you? Have promotions that require the customer to bring the promotion to you. For example, use a flyer that requires the flyer to be brought to your business. Use a "coupon code" that only appears in a certain place. Try several things, then match the results of those campaigns to your spending on them. The stars will emerge, and those stars should light the way to future success for you.

Remember, you maximize your success if you match your effort to your results. That's what the 80/20 principle illustrates - quite often, your effort doesn't match where your results come from. Correct that, and you'll find success.

 

[CWME]

I am not a firewood seller so take this for what it is, an opinion.

I would be honest and up front. Call and talk/leave message that you are looking to schedule delivery on xyz and need payment at time of delivery. Give them a time frame to work in and be clear that if it doesnt work out you are going down the list and their wood will be sold.

 

[PasoRoblesJimmy]

You have the right to refuse service.

Don't waste your time with irresponsible deadbeats.

Firewood sellers in my area have more business (via word of mouth) than they can handle.

Don't be a doormat for the morally-bankrupt.

 

[Jere39]

I know this is tough. And you are right, the longer you allow these customers to take advantage of you and your business, the more advantage they will take. You did not mention that either of these folks are "friends" too. So, I am guessing they are your customers. That implies a business relationship. It's a new season, and just the right time to explain you have been struggling with your operations, so that you will now require payment on delivery, and delivery scheduled a minimum of 1 week in advance. (or whatever works for you and all your good customers).

I had so many issues with delivery schedules, requests for delivery to the back of a lawn, behind the pool, other side of the fence, under the kids tree house, that required wheelbarrow delivery that I changed my pricing to strongly incentivize people to pick-up their own wood. Might not be an option for you, but pretty much eliminated my problem deliveries. I have always managed a COD business. I have one regular customer who drives by to look at my piles, chat while I am splitting, and otherwise talk longingly about that time in the hopeful near future when he will have the cash to pick up a load. Always brings his empty trailer, perhaps he thinks I'll take pity, or maybe, I'll have changed my policy. Either way, nice guy, still a customer, and still aware of how it works. Much easier to not get started with a problem than fix it later.

But ultimately, do you enjoy wood working, or do you enjoy chasing delivery dates and payment?

Good luck

 

[rocketnorton]

when me & a friend did that for a living, delivered price was as far as truck could get in driveway/yard, cash on the dash, off came the wood, if they wanted it moved after, that was a negotiable extra. no cash, there was someone else on the list...

 

[Guswhit]

I had a similar issue a couple of years ago and to make matters worse, he was an attorney. Always wanted the wood at the last minute, price to high, shorter than normal pieces, always took a long time to pay. Finally I had been pushed to the limit and he stopped me to try and negotiate for wood at the local gas station. I tried politely to delay the conversation for a more appropriate time, but he kept pushing, so I finally just said he hadn't scheduled any so I thought he was getting it elsewhere. He proceeded to tell me that I had a huge pile of wood and I needed to get a delivery to him. After several deep breaths on my part, I told him that all of my wood was spoken for or PAID FOR, and didn't think I had any time to process wood for him. Needless to say that didn't sit very well, but sometimes you have to cut a guy loose when it's your sanity at risk.

 

[blackdogon57]

Firewood is a cash business for me. Customers call with an order and I usually fill it within a day or two. Price is discussed at time of order.Payment is simple. I dump the wood and get handed the cash. No credit. No plastic. No cheques. No receipt.

Like any other business there will always be customers that are difficult to deal with. That's the good thing about being self employed - you don't have to deal with unreasonable customers unless you choose to.

 

[3fordasho]

My first customer is a business that keeps the fireplace going all winter long. My original thinking was to give them a better price since they were my highest volume customer and being a business I would always get paid.

It turned out most craigslist buyers are better customers - 1st 9 times out of 10 they will help unload, 2nd ~ 50% will tip above the listed price which is higher than what I get from the "volume" customer. 3rd - the business never helped unload and does not appreciate the great price they were getting. 4th -with my equipment set up there is no advantage for me to offer volume pricing- cost per load delivered is the same for 1 or 10 loads.

If I have wood I will still sell to that first customer but by the time they call I will probably be sold out for the season to craigslist customers.

 

[CTYank]

No mention yet that these two cause you to maintain in inventory a lot of special product.

You might tell them that you'll need to have a cash advance of $X/cord to cover your expense to trim it for PAYING customers and the waste incurred in trimming. Due at processing time.

Say that'd take you an hour/cord, and cause you to waste (into your stove, but don't tell) a fifth of the wood volume. Then get a non-refundable deposit from them for an appropriate amount. This is difficult and dangerous work, and the tools are expensive.

You might also ask for a cash restocking fee in advance of loading your truck, as cold-feet insurance.

Or you could just tell them that you're not Burger King, that you cut 16-18 inch and deposits are being accepted for reservations. Get in line. No special stash for anyone.

Never ran into folks like that when I sold truckloads down here in Fairfield County. (What I "sell" now is give-aways to friends.)

Or feign deafness, except that money talks. Life is short.

 

[H-Ranch]

Seems to me you have two choices. One is to turn them into the kind of customer you want to have and keep (may not be possible - some people will just never get it.) You can let them know that you have more customers than wood so they can accept the 16-18" length you are processing and to call for a delivery when they are ready with cash in hand. The second choice is to cut them loose. If you go with the first option the problem will take care of itself and you've made them responsible for the outcome.

 

[blades]

Cut them loose, There isn't enough margin for extra handling and chasing your tail around the block. That 11 cord will move real quik in standard size, and the bottom line will be a little healther.

I do not sell fire wood on a normal basis. but speaking from my own experiences ( self employed) over the last 40 years, Mr. Nice Guy ends up on the short end of the stick. There always seems to be 1 or 2 customers that are pure schmuks when it comes time to exchange green stamps for service or products. Virtual dollars don't buy squat, pay rent or any other bills. I have cut some fairly large accounts loose just because of being jacked around payment wise as well as refusing to do business with some others as they wanted everything on their terms. Its your business , you set the terms, period.

 

[olyman]

I am not a firewood seller so take this for what it is, an opinion.

I would be honest and up front. Call and talk/leave message that you are looking to schedule delivery on xyz and need payment at time of delivery. Give them a time frame to work in and be clear that if it doesnt work out you are going down the list and their wood will be sold.

time of delivery,,would also mean,,BEFORE I unload it!!!!

 

[stltreedr]

Some customers require a little more "attention" than others. AKA PITA

You have to be careful with what you do, because it can affect your business with others in the future.

If it were my customer, I believe I would call them, let them know prices have increased by 25% this year; and due to several "late payers" you have a new policy of being paid when delivered. Make it worth the extra effort, or let them go elsewhere.

 

[origionalrebel]

if you already have the wood processed for those folks for this year, sell it to em cod. just don't bother to cut any special stuff for next year.

 

[RiverRocket]

I sell 25-30 cords every year and I insist that they pay me upon delivery, If they're not home, they hide the money for me.
One customer always has cash in an envelope inside their gas grill, Another always has the check under the doormat.
It's always easier to set the rules up front and stick to them....Once you start getting lenient, they take advantage of you and it's harder to change the rules latter.
My rules are simple:
#1) Must give me three days notice.(don't wait until it's snowing like crazy and blowing 30/mph and call me Saturday night and tell me you're out of wood)
#2) Must pay me upon delivery. (No exceptions)
#3) I don't stack,wheel barrow or carry (Dump and go)
One exception...There's an elderly woman that I stack half in front of her garage and half on her porch (No charge)

I would probably give your two customers one new chance this season...Lay down the rules and price and tell them no exceptions or you won't be able to sell them wood this year. (JMO)

 

[spike60]

Good discussion here and lots of good comments.

My question though is why should there be a different set of rules for the seller than for the buyer? If the buyer decides to go elsewhere he just picks up the phone and calls someone else. Granted, the seller has the extra step of having to decline to deliver to a customer, and it can seem awkward if you've never done it. But shouldn't the seller have equal ability to stop doing business with someone? If it's not working out for whatever reason, just cut the guy loose.

I have to do this sometimes myself in the store. How direct you need to be depends in part on how persistent the customer is. A simple, "Sorry but we're not going to be able to help you" works. Sometimes a more blunt, "It's just not a good fit with how we operate" or "It's really not worth the aggravation" is necessary.

But the bottom line is that you shouldn't be constrained by business etiquette to the point where you hang on to customers that are simply not worth the aggravation of dealing with them.

 

[Swamp Yankee]

if you already have the wood processed for those folks for this year, sell it to em cod. just don't bother to cut any special stuff for next year.

This is indeed my plan, if I get them to ever take delivery this fall. Either no special size as suggested or tell them to look elsewhere.

The idea of trimming 3 inches off every piece of 11 cord, except the few I missed short, so I can sell it as normal stove length wood doesn't really appeal to me either.

One of the keys I use to determine how much treelength to buy for the following season is my repeat customers. i sell 50 cord a year. 35 goes to regulars, 5 goes to inventory for my regulars that I know never order enough and will run out, and the remainder is for seed / speculation. These are the sales that develop new customers to replace repeats that I lose each year to competition, moving, gone to pellets, etc.

Losing 11 cord of repeat customers without replacements lined up is a big nut to crack the following year as I refuse to get down in the price whore wars with the hacks. That's why this looks to be such an opportune time to cut them loose. Enough of the new people that I delivered to this year have asked to become regulars after receiving quality wood, of the correct quantity, delivered on time, even though I'm in the upper end of the local price spectrum.

That said I live and sell in a small community, so if I do cut them loose, it has to be done diplomatically, I have spent too much time developing a good reputation to have it trashed by a couple of PO'ed deadbeats.

My additional thoughts.

Take Care

 

[haveawoody]

No pay no wood.
No home no delivery until visit one is paid for and delivery #2.
Try not being home for any service delivery you have booked and see what happens to you.

Pita customers just not worth the hassle.
Better not to sell any wood than to have to follow up for something that has marginal profits on the best days.

Make the rules simple in a sheet you give with your first delivery and issues will disappear.
If they don't it's a customer you don't want anyway. IMO

 

[Dirtboy]

I would cut them loose. The wood deliveries around here are simple-cash before you dump, and after you dump you leave. Unless of course you have "helpers" that would be paid extra to stack.