I had the honor of participating in Mitch Jackson’s Spreecast with Seth Godin (segment beginning at 28:45). I took the opportunity to ask if he still supports his earlier claim from Permission Marketing that companies should fire 70% of their customers or if he has revised that notion as technology has evolved to perhaps enable more customers to be served in a cost-effective manner.
Seth qualified his response by discussing various types of businesses based on what they are selling. For businesses selling something they make once, and then duplicate, there’s clearly incentives to create volumes and market share. However, that is not the case for most small businesses. As Seth Godin put it:
“Most small businesses are wandering generalities. They try to appeal to every person in town, every person who walks by, every person who they can touch, but they make nothing that people would cross town for. They make nothing that people care about. If you are going to make it as a small business on the Internet, when everyone else is a click away, how can you possibly make something for everyone? Someone bigger than you, more efficient than you, more cut-throat than you, is going to make something for everyone. You have to make something for someone. And the minute a new customer shows up who isn’t happy with being special, you have to say ‘sorry, go to my competitor next door, go to that other place who sells stuff for everyone, I make stuff for special people.’”
Regarding my question about the continued need also for big companies to decline business, Seth pointed out that some big brokerage houses in Boston found that 2% of their customers were accounting for 95% of their customer service expenses. Simply put, those customers weren’t worth it and the company called them and said: ”we think you could be better served by our competitor, here is their phone number, we’d like you to transfer your account to them.”
In sum, Seth Godin holds on to his view that companies should decline many business opportunities. Have you found yourself saying no to business? Are you considering getting rid of some existing customers?