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Do not say ‘No’ to your difficult or bottom-feeder customers; simply and politely raise prices. Do not tolerate negative return customers. You must get them off the bottom of your list but do not do it by firing them. Let them make the decision to either go elsewhere for goods or services or pay your increase. Put that difficult customer into the position of deciding; not you. Let them choose to stay with you (at higher prices) or not. Do not choose for them because you introduce other problems unassociated with price increases.
On rare occasion, you may have to say, “I cannot do that”, but rarely. There will be a few times that you must tell a customer you cannot help them, but that should be rare since you always have the option to farm out the work and bill it at a markup. Most of the time, your best option to deal finally with a losing account is to raise its prices.
Know which customers cost you money and act. If you are smart, you do everything you need to do to know which accounts are hemorrhaging. Once you know this, you can make informed decisions. You can immediately change your future; announce a price increase and regardless of the customer’s answer, you will begin making money today. When you know who the worst customers are, you can either change your cost structure to change losses to gains or you can raise prices. Whether the customer leaves or not, you are going to benefit from your decision. Make it and do not hesitate. This is one of the few times in your business career that announcing a price increase will make you money whether you get it or not.
