Who’s Fired?

Published on April 2, 2004

When we hear “You’re Fired”, the first thing that comes to mind is Donald Trump’s Apprentice show. Yet, is the concept of firing limited to employees? The answer is a resounding no!!! How about firing some customers? Customers fire vendors for not being good. So, why can’t vendors fire customers who do not fit their sales model?

As a leader of your destiny, you have to figure out who your market is and only spend time on customers who are the right fit for your products and services.

Roy Putrino, President of Basic Home Infusion, recently dealt with this issue head on. As a supplier of in-home health care, he was finding that many national insurance companies were paying less and less for these services. Many of his national competitors wound up in bankruptcy. He started looking at this challenge and realized if he did not do something different, he was headed for the same fate.

He decided to provide less of the services that insurance companies were not willing to reimburse appropriately and provide more specialty services such as pre-mature pregnancy and MS in-home care. These services are listed as special therapies and hence command greater reimbursement from the insurance companies.

After implementing this strategy, Roy noticed interesting results. His overhead costs dropped immediately because he no longer was supplying the same amount of services. Consequently, his revenues also dropped. But, don’t get alarmed. At the end of the day, its not revenues that count. It’s the net profit (amount of money left over after expenses) that counts. Roy’s profit started to skyrocket. In addition, Roy’s stress level went down because he didn’t have to work as hard to make the same amount of money. In fact, he’s making more.

Roy figured out that certain customers were not in his best interests. He also figured out for other customers, it was not worth supplying certain services. If he continued, he would have gone out of business.
As the leader of your destiny/business, who’s your best customer? Who should you be spending time with? What services should you be concentrating on? If the answers do not add up to a profitable experience, then do something different or get out of business. If you don’t, the market will make that decision for you.

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