One company fired 30% of their customers and profits didn't just survive—they exploded 140% in six months. Turns out those small customers ordering non-core products were destroying 50-100% of profits, while the top 100 customer-product combinations generated nearly 150% of earnings. That's not customer service—that's corporate suicide disguised as customer satisfaction.
The Profit-Pulverizing Picture
Companies clutch onto every customer like life rafts, not realizing some rafts have holes bigger than their headquarters. The fear of firing customers has created corporate cowardice. "What if they grow?" executives whimper. "What if they tell others?" Meanwhile, these parasitic partnerships suck the life force from your organization faster than vampires at a blood bank.
One distribution company had a customer ordering 50 different SKUs in quantities of 10—same processing time as their biggest customer ordering 10 SKUs in quantities of 10,000. Profit difference: $50,000 versus $500. They were paying for the privilege of serving this profit parasite.
One manufacturer calculated their smallest 20% of customers consumed 45% of customer service time while generating only 2% of profits. That's not business—that's charity with invoices.
Shell learned this spectacularly. They analyzed their gas station network, discovered the bottom 20% were hemorrhaging money, and closed them. Overall retail profitability increased 60%.
Another company discovered their top 100 customer-product combinations generated 140% of profits. Everything else was neutral or negative—essentially running two businesses: one wildly profitable, one catastrophically costly.
What You'll Learn in This Episode
Todd Hagopian reveals the 80/20 Matrix Wave 1 targeting Quadrant 4 vampires—small customers buying non-core products.
You'll discover Strategic Slaughter Options: raise prices 30% for profit parasites. One company sent letters explaining new pricing. Half left—profits went up. The other half suddenly became profitable. Alchemy: turning lead customers into gold.
You'll learn Portfolio Optimization Through Elimination. One tech company eliminated the bottom 30% of accounts. Support costs dropped 40%, team morale skyrocketed, and they had capacity to serve good customers better.
You'll also get Minimum Order Values that make mathematical sense. One distributor implemented $1,000 minimums—lost 40% of customer count but gained 25% profitability.
Your Assignment
Calculate true profitability of your bottom 10 customers—including processing, service, complexity, and opportunity costs. This week, fire at least one unprofitable customer.
What customer relationship costs more than a corporate jet while delivering less than a paper airplane?
Visit https://stagnationassassins.com and Declare WAR on Stagnation.
About The Podcaster
Todd Hagopian has led five corporate transformations generating $2B+ in shareholder value. Author of The Unfair Advantage (https://www.amazon.com/dp/B0FV6QMWBX). Featured 30+ times on Forbes.com, Fox Business, and NPR.