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Why I Fired All of My Residential Customers
I appreciate that many business owners are probably reading on aghast about what sounds completely and utterly unforgivable, but on reflection it has probably been one of my best and liberating decisions to date. By letting go of the people I thought imperative to my business I quickly discovered that they were the ones holding me back professionally and personally. This mass firing has been something that has happened gradually over the course of about 18 months and I now consult directly with business owners which has produced an increase in my profits and the quality of my work life balance.
Why I Fired My Residential Clients
Problems
Despite quite a significant client list in both business and residential I found that the majority of problems I faced came from the residential side, these problems I’m sure you’ve experienced yourself. The payment problems, the difficulty in closing the sale etc, such things drove me to complete distraction some weeks. Not all customers are a problem of course but the amount of time and work required to keep them as faithful customers was starting to become counterproductive. Above all else my time is precious to me, like yours is to you, and there’s nothing worse than squandering those hours fixing issues which really should never exist in the first place or working doggedly to stay in the good books of a picky customer. Do I have problems with businesses? Sure I do, but they are very few and far between and the payoff in fixing a problem with a business is usually worth the time and effort.
Staying Competitive
Of course being able to stay competitive is all part of the game but keeping up with it is hard work in the residential arena, there’s a lot of competition out there and they seem to have a lot more time on their hands. When they’re combined it feels like a constant uphill struggle. Those competitors concentrating on the residential sector don’t put half as much effort in with businesses which leaves a market source I can easily tap into without the worry of having to constantly watch my back.
Repetitive Work
Repetitive work sounds like a good thing in some ways, repeating a particular virus fix for example would make you quite adept at the process which only serves to save you time and appear like the hero. After the 100th virus removal though my interest in the work is lacking. The work I do with my residents is always the same, I rarely feel challenged and this is something I require of my work. No two businesses are ever the same, ever. Their requirements and the vast range of technologies in use on premise and in the cloud provide me something new and interesting to get my teeth into every day.
Time
The increasing amounts of time I’ve spent with residential clients was keeping me distanced from the businesses, with businesses it’s important to remain responsive and available and when I lost a business to an overzealous residential I felt the pinch. There may have been a poor decision on my part but by removing the problem I freed up a great deal of time, worry and residential pressure.
Money
I guess it always comes to money but that’s why we’re here, I want to build a profitable business. If I factor in prep, travelling and an hour at a couple of customer’s homes during the morning I’ve made £100 for half days work. With a small business this could be anywhere between £200 and £250 and up for larger businesses for the same amount of consultancy time. For me it’s a no brainer.
Working Business Hours
One of the greatest benefits or concentrating on the businesses is that I now work business hours, there’s a greater certainty that when 5pm arrives I can start to close down the laptop and put my feet up without fear of interruption. Downtime and quality family time is important, especially during those stressful times we all come across whilst running a business. Time away helps to energise you and reflect on the work you’re doing, gearing you up for the exciting new challenges that await you on Monday.
So, how did I fire my residential clients? The process of letting go was a lot easier than anticipated, it begins by first removing your biggest problem customers and then simply shifting your focus and efforts. Derrick has already covered some of this in great depth, How to Fire Your Worst Computer Repair Customers and Knowing When to Let Go of Bad Computer Repair Customers. These articles provide excellent advice to kick start the process, it’s then simply a matter of focusing your efforts and marketing materials at the business sector, overtime everything will eventually fall into place as you receive less and less residential interest.
A decision such as this isn’t for everyone so requires careful thought, I did what was right for me and my business and the decision has paid off. Anyone else only working with businesses? How did you make the change?
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That wasn’t my experience at all – I had problems from business customers. Residential customers paid at the time of service – I made it clear that payment was due at that time. I only ever had two refuse to pay. Whereas two businesses would not pay me until 30 days after my service, two stopped payment on cheques – one of which included parts I had paid for – and I had to fire two because of bad behaviour.
With residential customers it’s important to make sure they know the costs, that payment is due immediately, and to explain their options and that the service person is making their best efforts to keep the cost down.
Yes Marc, I run into exactly the same problem. The business customers are the worst. Always having problems, they don’t care if you’re busy, you need to help them immediately because they made a payment over a month ago. They also love to hustle you or not make payments until two or three weeks later. It’s really annoying, especially if you don’t deal with the owner directly, you sometimes literally have to track him down and be overly assertive that your services are not a charity.
Could these problems have to do with the way we are handling the invoicing. One would love to assume that an established business would stay up to date on their bills, but they don’t seem to understand the urgency of paying for services the minute they are billed.
Residential Customers are the main source of income. Constantly calling, when they have problems they understand if you are busy and need to reschedule, and they always pay their bills immediately. Maybe if you have a couple hundred technicians working for you, the business only route could be an option. But as a small business, I would never let my residential customers go. I’m not looking for a challenge, I’m looking for easy money. Sometimes residents will call you with a problem so simple my mom could figure it out, and they have no problem paying. Businesses think like residents, have much more complicated problems, but don’t want to pay business prices.
What is the best way to get businesses to pay immediately without appearing overzealous? What if the owner is not there?
I have to agree – i prefer residential clients. As an onsite tech, they’re accommodating, they’re happy to have their computer back in 3 days if it needs work. Overall they’re nicer, offer drinks when i’m there and so on!
My dealings with businesses have been different – they’re demanding, they want it done now, and then they take a long time to pay. I feel stressed with business clients (excluding small home based businesses as they’re like resi clients), and overall it’s not as positive an experience.
They also tend to question things a lot more, challenge you on your knowledge, and so on.
This is why i prefer residential clients!
I could not agree with you more and made that same decision only a few years into my business and never looked back. Nowadays it is even worse. Customers demands are very high with little rewards.
Tom
True about the repetitive work – that gets a little old. But I would say 85% of my work is with my residential client base and that is the way I prefer it.
1. I get a check or credit card when the work is done so there are no billing issues or keeping track of accounts receivable.
2. I work regular business hours. If they need me in the evening or on a weekend, it is based on my availability and it is at 1.5x my regular hourly rate. When they hear that, they usually don’t mind waiting until regular hours.
3. Efficient use of time is not really an issue since I now have most of them trained to have me handle repairs remotely. I can fit in more jobs when I don’t have to go anywhere. And if it is not a job that can be done remotely, the client will often bring me their computer.
I have fired a couple of my customers because they were too demanding or there was just too much drama involved in dealing with them. But I would say if a business owner has no problem customers, he or she probably just doesn’t have enough customers overall.
Scott
I scratch my head trying to figure out how you do not get paid from every single retail or home customer? I leave every job with payment or their equipment no exceptions. That is like saying Walmart has a problem collecting for its goods at the check out register. I work on a computer either in their home or on my bench and when the equipment is collected so is the payment or before I leave their residence. I think it wrong headed of anyone not to get paid in full as you go especially with retail or home users. Extending credit in these cases is asking to become a victim.
Also pricing models do not need to be significantly different. We charge bench of $59.99, on site of $99.99 and $120 for business consulting.
My average home visit seems to be about double what ricks is so maybe he has a pricing issue as well. If I have two visits in the morning I collect between $300-400 ($150-200 ea. job on average)either by cash, visa, debit or check(I often accept checks from home owners as they are better check risk) so there is never a collection issue.
I would recommend Cash on delivery even for small ‘business’ jobs as well. The only time I do Net10 or Net 30 is with a larger project such as an installation of servers or whole network but even then I get a hefty deposit up front.
If you do home customer computer support WELL then it is very lucrative. If you do business support well it can be very lucrative. The problem comes when you compare someone doing one thing badly to one thing he does a bit better and comes to a false conclusion based on that. Worse if you start to recommend that to others. Sort of the blind leading the blind situation.
I agree with Rick that in his situation B to B is better. But I disagree that is any sort of rule for anyone else. It is easier to get retail customers, it is easy to please retail customers (usually), and you collect cash on every job so they are profitable. I have seen what I thought were profitable projects with business customers turn in to stinkers when I had to spend hours and calls and calls to collect. So I work twice once to do the job, and again to get paid for that job. There is not enough price differentiation to offset that eventuality.
fyi… h’s talking pounds sterling, not $ , so your numbers are about equal to his.
Great article!
I agree completely and fired my residential clients a couple of years after starting my business in 2001. I found that the biggest problem typically was their teenage kids infecting a computer with garbage; you clean it up and return the system and a couple of weeks later the same or similar problem is back making the client wonder if it ever got fixed right in the first place (in a parent’s eyes their child can do no wrong).
Additionally, residential sales and service are heavily price driven and typically there is little opportunity for preventative maintenance.
It is a much different situation when a server is down and a half dozen employees are sitting on their hands waiting for a fix, it opens the door for you to implement a hardware solution and maintenance plan to reduce the likelihood of the same problem rearing it’s ugly head.
Wouldn’t you rather make one stop to work on a number of computers than one computer per stop?
I find business customers make me work longer hours and after hours as they pay managed service fee every week and expect everything to work well during business hours. Any maintenance, upgrades, updates need to be done afterhours to avoid interruptions. Is it only me or any of you also have similar issue?
Yes, I have the same problems, I have one client that has one hour per week that I can do anything before I close. 6:00pm on Saturday, one hour before I close. The other businesses as well, They actually expect you to work through the night for updates and such, because everyone is using them during the day. Annoying. Love my residential customers, minus the two or three weirdoes.
I wish I had read this article a few years ago. I had a computer repair business for about four years and, after reading this article and looking back, this is exactly what I should have done. Hindsight is always 20/20 of course. I have since moved on to a bigger corporation working in the IT dept. and, while I’m very happy with my decision to close my business even now (a lot of factors were in play when that happened), I do see that, if I had fired most of my residential customers and focused more on businesses, it would have benefitted my business immensely.
I do agree with the idea that this move is not for everyone. As long as there are computers in people’s homes, there will always be a demand to have them fixed. If you have some procedures in place and rely on automating a lot of your ‘boring’ tasks, residential stuff can pay off, too. But if you constantly have your residential customers putting a drain on your life and your business customers don’t get the best out of you, then that could be your deciding factor on making this decision.
Unless it is a critical situation needing immediate attention most business customers don’t want a tech touching their equipment during prime business hours, which means working nights, overnight, early mornings, and weekends. I envy you guys if you have trained your business clients to allow you to work on their gear Mon – Fri, 9 – 5.
TL:DR Only a couple “problems” are actually problems. The rest are policy issues and personal preferences.
A good blurb on why Ric chose to abandon the residential market. There’s absolutely nothing wrong with choosing to focus on one market over another. However, Ric’s reasons aren’t necessarily solid arguments why anyone else should make the same decision he did.
Many of the negatives Ric outlines come down to personal preferences and policy issues rather than concrete business reasons. IMO the only really solid argument is that hour for hour, business support generally pays better than residential. The rest is . . . debatable.
Based on last years dollars, I’m about 75% residential and 25% small business. That’s my preference – I like residential jobs. And even with my business customers I’m essentially a break-fix guy, not much different than residential. Here’s my experience compared to what he’s mentioned:
Payment problems:
Residential – None. Job done? Pay me. Exactly one bounced check 3-4 years ago that the guy immediately made good.
Business – Net 30 or longer, too often accompanied by the hated task of chasing invoices.
Difficulty closing sales:
I have little difficulty closing sales on either market. Someone contacts me, I provide a quote and more often than not get the job. But HOW that contact/quote/close process is handled is a soft skills issue that frankly many people simply don’t have.
Having said that – I don’t perform (nor seek) four, five or six figure jobs like big server rollouts, etc. That’s outside of my league and desire. I’m sure they’re very challenging to close would probably crash my close rate were I to chase them.
Work required to keep a customer faithful:
None for either. Frankly I don’t lose sleep over whether a customer stays faithful. If they like my service and pricing, they’ll keep calling. And if not, well I’ll often hear from them again someday when the “new guy” let’s them down. I have no “whales” that could crush my business by their departure.
Squandering hours fixing issues that shouldn’t exist:
This is definitely a personality/perspective issue. Any hour I’m paid for isn’t squandered. And fixing issues is my vocation and sometimes avocation. We might as well take it further and say that NO problem should ever exist. Users, software and hardware should at all times function as intended.
Staying Competitive:
I think Ric means competing for work/jobs. And that point is of course valid. There are more competitors able to do residential work than higher end business jobs. But even in the more competitive residential market good work, fair pricing and the appropriate sales & closing soft-skills will carry the day.
Repetitive work:
Henry Ford had some pretty good ideas on the value of repetive work. This is certainly a “problem” that is a personal preference rather than real issue. As for me? I’d rather complete and get paid for six repetitive jobs while Ric is working on a “never before seen” problem. Plus, when I’m finished I may have created a half dozen new referral sources while he has his one happy customer. But in fairness – he might still get paid more.
Time:
Residential – I control the time and schedule. I’ve never had anyone demand service at some ungodly hour.
Business – THEY control your time. OK maybe not completely, but to a greater extent than residential. Business are more likely to have needs at off hours that can’t be ignored. Mission critical tasks like after hours updates, or some crisis over a weekend or holiday.
Money:
Residential – less money per job, larger number of jobs.
Business – more money per job, smaller number of jobs. But if you’re good enough and catch a lucky break or two, there’s no doubt in my mind business support can be more profitable.
Working business hours:
Residential – I set my business hours. I don’t answer my phone at 11pm or 7am or on Sunday if I don’t want to. If a residential customer or two gets offended by that, I won’t miss them nor likely even notice that they’ve stopped calling.
Business – Well, you still set your hours but there may be greater negative consequences if they can’t reach you when THEY want to. And if you lose a business because of that, there’s probably going to be a much larger dent in your bank account and work schedule.
Excellent points. I’d add there is nothing like getting mission-critical support calls from 2 or more business clients on a Friday afternoon to make you miss the relatively casual nature of the residential market.
I have been doing PC support as my own company since 1994 and in 2002 I opened a storefront in part as a means to address the issues that drive one to abandon the consumer business. My shop is not open Saturday but is open until 6 each weekday evening. Early morning and weekends are for my choice of out-calls; friends businesses or some little old lady who has me wrapped around her finger, but my choice.
My out-calls are at a premium price that I quote without shame followed by quoting the rates if they bring the work in or have us pick it up. Infrequently someone complains about my hours or my not being open Saturday, some complain they cannot get the work back the same day when our turnaround is usually two days. Me, I fix the PCs like they were my own. I make them legal, secure as can be, and cost effective for the customer. Once they get that message, I find I have cart-Blanche to maintain their PCs on my timetable and pretty much at whatever price I can justify. Quality work buys you patience (if feigned) and referrals.
Many times I have been advised to focus on business customers for all the reasons noted here. My business has moved back and forth from commercial to consumer and back over the years as the demand has shifted. My answer to stability was to open a store and use hourly rates to mitigate the demand for on-site service. Doing the work in the shop I have control of the environment and have more resources to complete the work. Further, I have 6-8 stations going at a time so having two days to fix each PC really provides plenty of time for research and repair. That is a much more comfortable work environment than sitting at the PC in someone’s bedroom with Fox News blaring from anther room.
My shop allows me to work hours I can handle and is respectful of my family. The relationships I have built having the store in the same place for 12 years provide a referral base that keeps me from having to push advertising. The businesses I work with use both my onsite and in shop services and prioritize their issues accordingly. The bottom line is you can pick you customers and control the relationship through a number of means, be creative. Firing customers is a necessity at times but controlling the customer’s expectations is the real answer.
@Tony Scarpelli – Ric is based in the UK. £100 = roughly $160. So he doesn’t really charge less than you.
I’m with Ric – maybe it’s a culture difference, but here in the UK, any work you do for a residential client seems to imply warranty on that work for ETERNITY.
Even if a later issue has nothing to do with the previous, the client will say “Well, you fixed it last time, you must have broken something”.
Don’t agree. Many of my residential customers have turned me onto business customers, many at their place of work. I also get residential work from employees of businesses I work for. I already know them, they know me and what I am capable of and they pay their bills. I don’t take customers who seem like a pain and softly let them go if I find out later that they are a pain. In many small markets, residential customers are essential to staying alive. When you have 1000 businesses and 200 IT guys around, it gets tough to only service business clients and make a living.
Hi Jim,
What are you favorite lines for “softly firing” your customers?
I find I don’t have a lot of success in this department. I haven’t been able to let them go without it turning into some sort of international incident.
Cheers!
-m
1) I’m so busy and don’t think it would be fair to you to do this work. I can’t guarantee it will be done in a timely manner and I know this is important to you.
2) I know a guy named “whoever” who specializes in “insert job here” and I feel he will be able to do the job better for cheaper.
3) I’m cutting back on work to spend more time with my kids/family/whatever for the next while. I can suggest another good technician to help you as I don’t want you to be without your computer for too long.
The list goes on and you can always put a little spin on the basic idea, whatever works and is believable for you.
For me it typically involves suggesting someone else which means you need to know someone else, preferably a decent tech but in the end, you’re trying to gently push them elsewhere and after they’re gone, it’s really not your problem how good the other tech is.
when I had my own consulting business, as soon as I had enough commercial business I dropped consumers as fast as I could.
it was the best thing I did as a consultant.
If you live in a rural area you have to take all the customers you can if you don’t want to starve.
Absolutely. In smaller markets, if you want to make a living, you figure out how to work with residential clients. There is money to be made there and this blanket suggestion they are unworthy is a bit short sighted and doesn’t take into account the realities of some markets.
I’ve been on my own for 13 years and there is no money in a residential base. They will constantly call you at all hours and always looking for free support. I only do referrals and I don’t even want to deal with that. I leave them to Geek Squad.
I am looking to do the same – Home users are a pain and want you to work til 10pm sometimes on problems like nero has stopped working and it needs to work NOW! i am not waiting til tomorrow otherwise i will go elsewhere.
Business customers are happy when the close for you to go back the next day.
As for payment business customers always pay but you have to expect to wait 30 days or so for payment which isnt to much of a problem i would say.
Good luck and i would recommend people move more in to business customers./
I can’t remember the last time I agreed to fix someone’s computer while they waited. If they come in the shop with a “this laptop won’t start” problem, I’ll try the removing the battery and holding down the start button trick. When that works, and it often does, I send them out with no charge and suggest they bring it back some time for a tune-up. They almost always do.
Otherwise a work order gets filled out and I tell them I’ll call when it’s ready. Usually next-day. If that’s not good enough, I’d tell them they need to go elsewhere. I’ve never had to say that.
Great article!
I work in North London where competition is fierce, especially from part-timers or those willing to charge next to nothing in order to top up their income, which when considering the cost-effective attitude of many residential users is difficult to combat, as price nearly always tends to win.
I agree with much of what Ric says residential customers tend to be those whose PCs that have been ill-maintained, full of useless FREE! downloaded software and no back-up regime and they expect the earth for the least outlay on their part. Whereas my business customers paid the going rate without question.
As Ric stated many businesses close in the early evening, unlike residential customers who often do not start send queries until the evening. Luckily, many of my customers have signed up to a remote access service, which can be a saving grace when dealing with quick software related problems.
The latest call for help that I can remember was 11:50pm on New Years Eve 2012, but quite often I will receive late evening calls from residential customers, many of whom think that you are their personal technician, just because you may have carried an isolated virus removal job
I would certainly not sack my residential clients in favour of business ones. I make more from residential than I ever would from business.
Businesses here simply avoid paying at all cost as they know you’re not going to chase them through the legal system unless the bill is into the thousands of Euros.
Excellent article – We’ve been doing this ourselves and I have transitioned slowly to focusing on business customers, and have dropped many residential clients. While I realize this decision isn’t for everyone, it’s helped us grow and build our business tremendously. By focusing only on business customers, we’ve experienced the following benefits:
1) We landed a subcontract with the government, and are looking at expanding in this arena
2) Predictable hours – typically 9-5
3) Predictable systems and networks! Most businesses all use the same setup for their machines, and employees typically don’t run rampant installing random software or looking at questionable websites (they usually fear they’ll get in trouble)
4) Longer engagement hours – I’d rather spend half a day at a business working on multiple systems than running from one residential site to the next every hour or two
5) Opportunities to learn and engage in multiple industries – we’ve done government, legal, financial, healthcare etc. types of clients, each with their own challenges, requirements and processes!
The only downside is that sometimes it takes businesses a long time to pay – but on the other hand most businesses with several employees won’t bat an eye at your hours/rate and in fact, most of them can write it off as overhead expenses.
Great topic. I can see some good and bad in all of it. I started off about 12 months ago and things are slowly growing but not fast enough. I only service business customers at the moment and yeah some have been trouble, but most are great. Fixing things quickly is important to them, but their employees are being paid to thumb twiddle so I understand. For me it comes down to planning, a spare laptop or PC in the cupboard gets rid of that problem generally.
But I was wondering how you guys find residential customers. I really have no idea where to start with that. We have a pile of known residential service providers (most with a terrible rep), it probably is a bit of easy money if I can get the work. But how do I get the work?
I think long term I will focus on the business customers as it puts me in more interesting territory for me, but when I am not working then why not do some residential I say.
Help greatly appreciated,
Luke
I work in Melbourne and I must say , I agree with the article very much.But most of my residential customers are those whom I share a great relationship with, and thus it becomes difficult to act tough with them
All these comments just demonstrate that you have to choose. Nobody’s comfortable with both. Have a focus and go after that market.
Been in business for 5 years and had several issues and they were all commercial / business clients , i have repeat custom from my private clients and they are much more valued to me then the business ones and they pay on completion which is great :) it has taught me to be very wary of businesses contacting me in the future and i do ask them questions i.e Have you had tech support before ? why did he leave or why did your relationship cease to be ? and most importantly .. how will you be paying for services ?
I disagree with this article. I have been dealing with residential and businesses for over 15 years. Onsite work for residential customers has always been fun,relaxing and personally rewarding. Business work while it can be profitable can have many issues as well. Worse then any residential can bring. Many small businesses expect a deal.. cause they see you as a small business as well. When it comes to dealing with Residents the key is.. Be upfront. Upfront about pricing and payment. As long as you are upfront about it.. you will be fine. I typically have had customers tip me , offer drinks, lunches and not require anything extra for it. And yes they have referred me to new clients and businesses as well. Residential has always been fun.
Now as to the challenging technical work you are looking for that is different. That I can understand .. but if you are doing onsite work… There is a limit to what you are going to experience. Thank god MS is ending windows xp support. Hopefully this will lead to new work. Because there is nothing worse then keeping old pcs going.
I started off working mostly with residential customers and decided that there was probably more challenging work and repeat business with business customers. So for a while I moved away from dealing with residential customers and focusing strictly on business customers. I would once in a blue moon help residential customers.
Business has been great, especially with business customers and there really seemed no need to work with residential. However my attitude has changed a little bit lately especially since I’ve hired someone to handle a lot of my business customers’ needs. Lately I’ve welcomed for myself taking care of residential customers because they generally pay in cash so why not have some weekend cash in my pocket. I can go out and work on residential customers’ computers while I have someone taking care of the business clients. In my eyes it’s a win-win all around.
Oh and I also have a full-time job in between!