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Customer is always King!. But all organizations need to determine what type of Kings they want to deal with, which will help them in achieving a sustainable and profitable growth. In IT services sector, ideally you want to work with Customers who treat you as Transformation partner, to work in join partnership on solving their business requirements. This is in contrast to vendor partnership resulting in staff augmentation. But to get there takes a lot of effort to build the Brand, capability and delivery excellence etc. for customers to treat you that way. Working with larger Fortune 500 Corporations means a more structured approach for contracts, services and payments. But they also typically tend to mitigate risks by having more than one vendor for their requirements. Working with small to medium size organizations, may lead to challenges on size of contract, payment issues etc, with upside of becoming a strategic partner when the customer organization grows. Working with customers mean investments in Customer Relationships, Proposals, Proof of concepts etc, which are justifiable only if the relationship grows. Its better to trim the tail (where returns are meagre compared to investments) and refocus on profitable customers. Organizations need to decide on their customers based on the products and services they provide, their stage of growth, risk appetite and financial situation. Its better to turn down customers, when the requirement is not a skill the company has or wants to build, or there is insufficient capacity to meet the requirement, or requirements are not clear leading to potential scope creeps. There is an Explicit and Implicit way of selecting the customers to do business with. Implicit is indirectly stated or implied, while Explicit is directly stated and spelled out. In Explicit, companies usually spell out policies to meet to work with customers and vendors. There might be a minimum revenue size requirement, years of existence, credit worthiness, geographical location etc. This usually changes as the organization grows. In Implicit, Companies can segment the customers they want to work with and design appropriate strategies so that customers self select. For example, a high end luxury brand Retailer, will have stores located in Premium locations or malls, offer limited but exquisite products and pricing is in the higher range. They offer excellent customer service (Nordstorm, Coach, Burberry etc). Similarly Retailers, like Walmart offering Every day low price, target the general population, offer a wider catalogue at affordable price range. There is a dynamic of margin vs volume play, and based on which companies design their investments. This is visible in many sectors Hotel (2 or 3 star vs 5 star), Mobiles (Apple vs Android), Cars (BMW vs Hyundai) etc.

The whole purpose of a service or manufacturing of a product starts and ends with customer. Hence customer is the integral part of every product or service. Organisations have become far more flexible in today's time to meet customer goals and objectives. Driving value beyond expectation is something that the leaders in the market are thriving for to maximize growth and hence their top line and market share. Very rarely do we see a service provider or a manufacturer reject a customer. However citing key examples and criteria which is actually leading to a customer rejection in the value chain and offerings. 1) Credibility of the customer in the market, their credit rating and financial position determines whether one would deal with or reject the customer 2) Every organisation has a vision and a mission. If there is alignment to the vision with that of the customer a partnership can start and sustain. However any de-alignment of the same which leads to deviation of the vision and values of the organisation can lead to rejection of the customer 3) Confidentiality is very key between a provider and the customer. If there is any deviation to the confidentiality terms and conditions would definitely end up with customer rejection and legal suits 4) Customers supporting directly/ indirectly illegal organisations or customer themselves are involved in illegal activities or transactions, unethical activities or behaviour is another critical factor for customer rejection 5)Delivering value or service to a customer if the profitability falls below the company's minimum threshold can lead to customer rejection 6) Specification of a product for a manufacturing company undergoing too many changes w.r.t LSL and MSL very frequently could lead to customer rejection

I couldn't agree more to the statement "not every customer is worth the time and effort". Some of the most common reasons for denying business with a potential customer are as follows 1. Business ideologies or work ethics do not match 2. Product is developed for a specific customer segment. E.g. Credit cards are issued basis the annual salary of an individual. Some of the high end credit cards might not be available to some customers 3. Financials do not work out between the service provider and the customer 4. Regulatory restrictions. E.g. tobacco products could not be sold to people below the age of 25 5. Customer does not follow the guidelines laid down by the service provider. E.g. in some fine dine restaurants, they require the customers to be dressed up in formals and if the customer is not dressed up accordingly, the restaurant may deny entry 6. Customer is too demanding and/or is finicky and/or is unruly. E.g. recently airlines have become intolerant to unruly customers and they might blacklist such customers from flying 7. Background of the customer. E.g. Services not being sold to people or companies with criminal background 8. Sanctions (economic or financial or military). E.g. Financial transactions are prohibited with companies in OFAC countries

Mahatma Gandhiji said once , that 'Customer is the King'. If we want to do business successfully, it means that we should satisfy our customers. Else we would loose the race in the respective field(area of business). Having said this, there are some interesting places where we would think as a business provider that we can better stay away from a customer. In my opinion, there are multiple reasons as why we may not like to have some customers(in a corporate world or an individual business) In a corporate world it could be because 1.Of a high demanding customer to which the 3rd party or service provider organisation cannot cope with - It could be due to high expectation on performance , end-user satisfaction 2. The service providing organisation may not see a long-term benefit(profit) in its engagement with a customer as it had originally envisaged and the effort in putting the work therefore may not be the worth. 3. Of a stringent regulatory compliance/mandatory in a given location (in/from which the customer is operating) that the service provider cannot afford to have for various genuine reasons(like infrastructure/logistical challenges, lack of specialized skill,...) Eg: Take Automobile industry for instance. Indian car makers need to comply with European automobile standards 4. Of a tough SLA compliance which the service providing organisation may not be able to meet or may be fraught with much risk in terms of penalty for non compliance which may not be worth for the benefit that it gets. Especially in an IT industry say in a production support(maintenance) where penalty clause might be stringent and the organisation may not want to get involved for that kind of work for the benefit it gets. In an Individual business it could be because 1. There is a perennial problem with payment from the customer side 2. There is loss of trust due to the happenings in the earlier dealings 3. Of ethical and moral values which the customer may not practice for whatever reasons. Conclusion Every organisation/individual running business would a benefit to cost ratio. Especially , in a corporate world, how much profit an organisation (Service provider) would get from the customer/customer segment is what the top mgmt would think of. If the customer is not going to be of any benefit to the growth of the organisation or not helping the image for that organisation, then there is no point in having such a customer. For individual business, there can be any number of reasons.