One of the best leadership stories I have ever heard is told about Herb Kelleher, the former CEO of Southwest Airlines.
If you have ever flown Southwest Airlines you probably know that the flight attendants and other employees often have a lot of fun. For example I was on one of their flights when, during the pre-flight briefing, the flight attendant said, “For those of you who have been living in a cave since the 60’s, this is a seat belt. It works like this. Wear it!” Everyone laughed and all was well. Another time a flight attendant gave the briefing in her best Julia Child voice imitation. That sort of thing is not unusual on Southwest because one of the company’s core values is fun and they take their core values very seriously.
Evidently someone experienced one of those types of events on their flight with Southwest and was so upset that they wrote a letter to Herb that said they did not like that type of behavior and did not think that was the appropriate way to run an airline and if he didn’t do something about it they would not be flying Southwest in the future. Herb took a personal interest in that letter and answered it himself with a three word response which read, “We’ll miss you!”
There are two points to this story that I want to highlight. First, Herb was totally committed to the core values of his company and willing to set the example and stick to those core values even if it cost the company some lost business. What a wonderful example to his employees! How do you think they felt about the commitment to core values after that?
Second, the customer is NOT always right! The customer is always the customer but that does not give them the right to change your business, drive you into bankruptcy, make you violate your core values and ethics, or any similar thing.
There is much emphasis in management literature on listening to your customers, providing superior service to them, adjusting your business model and systems to improve the customer experience, etc. and all these are good and important ideas to a point. However, there are times when it is as necessary to “fire” a poor customer as it sometimes is to fire a poorly performing employee or supplier. While this is not a step to be taken lightly, if they are not profitable, workable, ethical, etc. they are not worth keeping. Better to send such customers off to your competition and let them bankrupt your competitors rather than you. (When that happens you can then pick up the good customers that previously were with your competitor and send the bad ones off to bankrupt the next competitor!)
The reason I mention this is because too many small business owners do not understand this issue and will do anything, even risk their own business’s survival, in order to keep each and every customer. Choosing to give up a customer can be a difficult thing to do but is sometimes the absolute best business decision. You need to know exactly how profitable each customer is and either move the unprofitable ones to profitability or eliminate them from your book of business. The survival of your business may be at stake! If you do not know who your profitable customers are or want to learn how you can determine this and better deal with this issue, please contact us and we will be glad to help you.
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Cevin's Corner 