Conventional thinking:  The customer is always right.

Contrarian thinking:  The 20% of customers that are responsible for 80% of your revenues have the right to be demanding and you should get out of your way to accommodate their needs.  The other 80% of your customers who are responsible for 20% of your revenues are not worth spending resources on if they require high maintenance and are constantly making unreasonable requests.

The 80/20 rule is a statistical phenomenon, also known as Pareto’s law, which says that 80% of effects are associated with 20% of the causes.  This rule can be applied to many different areas, and is particularly true in business.  Experienced businessmen know that their top customers (about 20%) are responsible for most of their revenues (about 80%).

Your top customers are the life and blood of your business.  You should know who they are and you should pay very close attention to them.  Give them most of your time and your best terms.  Get out of your way to meet their needs and make them happy.  Your top customers have earned the right to be demanding and to even make what most people would consider unreasonable requests.  If that is the case, as long as they continue to make you profitable, cater to their whims.

What is surprising however is that top customers are usually not the ones that cause most problems.  Top customers tend to have no time for bickering and know exactly what they want.  If they are not satisfied with your product or service they will not spend a lot of time complaining.  They will simply move on and buy from someone else.

Customers that tend to be most annoying and that cause the most problems are the ones who do not represent a significant portion of your revenues.  They are usually shopping around, or just trying to beat their suppliers to see if the can get concessions or a better deal.  These customers are not worth having.  You should just send them to your competitor so that they can start bothering them with their non-sense, using up your competitor’s resources to instead of yours.

What do you have to lose if customers that are not profitable go buy from your competitors?  Are you afraid that they will go around telling others that your product is bad or that you don’t provide good service?  They may attempt to do that, but most likely they already have a reputation from being unreasonable with suppliers, so anything they say will taken with a grain of salt.

Focus on your top 20% customers.  The others are welcome to buy, but they shouldn’t expect any special treatment.

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