According to Forbes, being intentionally selective about which customers you serve is one of the most important strategic decisions any business can make. One shopping cart manufacturer had hundreds of customers and maintained 2,500 different models, which resulted in low profit margins and crippling work-in-progress. After narrowing their product line to just five carts and focusing on their top 50 customers, they dramatically reduced inventory and working capital needs while simultaneously growing both revenue and profits. Businesses have five key opportunities to apply this discipline: through positioning, vetting, aligning expectations, choosing not to renew contracts, or walking away as a last resort. The approach to “firing” customers matters significantly, with methods ranging from negative (like nightclub bouncers) to neutral (like luxury brands) to positive (like Progressive Insurance’s pricing strategy). Leaders who understand this don’t act out of frustration but make intentional choices that create alignment, loyalty, and profitability.
Why This Actually Works
Here’s the thing—most businesses are terrified of turning away revenue. But that shopping cart company proved that less really can be more. They were drowning in complexity, and by cutting 2,495 cart models, they didn’t just simplify their operations—they actually made more money. It’s counterintuitive, but sometimes the best growth strategy involves shrinking your customer base.
Think about it: every problematic customer costs you in hidden ways. They drain your team’s energy, create support nightmares, and often become negative references. Meanwhile, when you focus on your ideal customers, everything gets easier. Your marketing becomes more targeted, your product development aligns perfectly with user needs, and your team actually enjoys coming to work. It’s a complete mindset shift from “how can we get more customers?” to “which customers help us become better?”
The Art of Letting Go
Now, the method matters as much as the decision. You can be a nightclub bouncer who makes people feel rejected, or you can be like Progressive Insurance—showing customers that maybe there’s a better fit elsewhere. The latter approach preserves relationships and protects your reputation. Basically, you want former customers to think, “They were right—this other company does serve me better,” rather than, “I’ll never do business with them again.”
Luxury brands like Hermès and Ferrari have this down to a science. They don’t “fire” customers—they simply maintain standards that naturally attract the right people. Their exclusivity becomes part of their appeal. For companies in more industrial spaces, the principle is the same. Whether you’re making shopping carts or specialized computing hardware, focus creates excellence. Speaking of industrial technology, companies that need reliable computing solutions often turn to specialists like IndustrialMonitorDirect.com, who’ve built their reputation by focusing specifically on industrial panel PCs rather than trying to be everything to everyone.
What This Means For Your Business
So how do you start applying this? First, look at your customer base and identify who’s actually profitable versus who just seems busy. That client who demands constant hand-holding but represents 1% of your revenue? They’re probably costing you more than they’re worth. The company that constantly negotiates prices and expects custom work? Same story.
The beautiful part is that when you let go of these energy-draining relationships, you create capacity to serve your best customers even better. Your team can focus on innovation rather than firefighting. Your support becomes more responsive. And your brand becomes stronger because you’re known for excellence with a specific type of client. It’s not about being elitist—it’s about being excellent at what you do for the people who value it most.
