TFS: Do your want to be inside or outside? The view is different.
July 26, 2013
Insiders are biased into thinking they have more control than they actually have, or probably should have. That's one of the reason it can be so valuable to have a consultant come look at your business. But the article below also shows the dangers of the outside view. It's cold out there, and the perspective may not be constructive.
"The way around the concern is simple." Only from the outside. Just replace the unprofitable customers with profitable ones. From the inside, you have to try and anticipate the repercussions and project probable outcomes. And prepare yourself for the "unknown unknowns." We can't know or control the future. All we can do is try and recognize what is valuable and hold onto it, letting go when we need to do so in order to survive.
Sloan Management Review: Should you punish or reward current customers, 2013-Jul-23, by Jiwoong Shin and K. Sudhir
The common apprehension among managers that firing customers may lead to allocating fixed service costs among fewer customers (making them unprofitable) is misplaced. The way around the concern is simple. Simultaneously with firing bad customers, the company should go out and obtain new customers — customers who are on average more profitable than the ones who were fired.