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January 31, 2006

"Checks and money orders that I receive will be shredded."

Long ago, when I was a teenage entrepreneur, I spent a few hours with John T. Reed. In one afternoon he gave me a specific piece of advice on pricing that made me thousands of dollars. He also illustrated, through stories and the example of his business, the power of understanding exactly what you want to do and structuring your business around that understanding.

I love the How to Order page on Reed's web site, which explains why orders for his books are not accepted by phone, fax or mail. It is so far from the standard idea of customer-friendly that it borders on customer-hostile. But that is the point: it is friendly to the customers he wants and repulsive to the customers he doesn't want. Reed is focused on the customers he wants and on the service he is willing to provide. And he has the sense to know that there are lots of customers not worth having, particularly for his low-overhead operation.

Does ten percent of your overhead go to problems with one percent of your customers? Could you redesign your business to exclude a whole class of service problems?

Posted by Bob Pritchett at January 31, 2006 04:00 AM

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I can't say enough about this article. It is so on the money it's amazing. I think the next book should be "Fire a customer today" :-)

Posted by: Dave at February 6, 2006 01:24 PM

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