The ABCD Customer Mix: Are You Working With The Wrong Clients?

Andy
We hear this all the time, and after our Stress Free Tradie event recently, it hit us. So many tradies think that every customer is created equal, but they aren’t. 

Ange
If you’re constantly stuck working with D grade customers, you know the ones, late payments, price hugglers, constant dramas. You’re leaving money on the table and making your business harder than it needs to be. 

Andy
So today, we are fixing that. We’re going to show you exactly how to ditch the customers who are draining your business and how to attract more A grade legends who respect your time, pay on time, and don’t make you want to pull your hair out. 

Ange
If you had any to pull. 

Andy
Yes, thank you, thank you. 

Ange
This is actually part one of a two part series, all about the customers in your business. If you don’t get this right, it will show up in your profits, or lack thereof, and at the end of the year. It’s that important. 

Andy
Today is all about attracting the right type of customer. Then next episode we’ll dive into leveling up the customer experience. So if you want less stress, more profit, better customers, which means you’ll enjoy running your business a whole lot more, then stick around cause these episodes are for you. 

You’re listening to The Tradie Show. This is the podcast for trade business and contracting bosses like you who want to lead with confidence, make more profit and create a better lifestyle. 

Ange
We’re your hosts, Andy and Angela Smith. Husband & wife team and co-founders of Lifestyle Tradie. Are you ready to have some fun?

Andy
Hell yeah!  Imagine it’s a year from now. You wake up, the sun’s out, and instead of rushing out the door stressed, you’re taking your time and enjoying your coffee. Your business is running smoothly, your cash flow is steady, and your weekends are actually yours. Sounds good, doesn’t it? But if you’re like most tradies I’ve met, that feels miles away from the reality right now. I’m Andy Smith, and I know the grind. I know the late nights, the endless stress, and the feeling that your business owns you, not the other way around. But I also know what it takes to turn that around, and I want to show you. Let’s jump on a game plan call. It’s just 10 minutes. We’re going to cut through the noise, figure out what’s holding you back, and build a clear roadmap  to get you to that better place. So go to lifestyletradie.com.au, tap the game plan call button, or scroll down and lock in a time that suits. You’re closer than you think to building the business you’ve always wanted. One call can change everything. Let’s make sure that 2025 isn’t just another year of struggling, but the year that everything clicks. Let’s make it happen.  

First, let’s kick things off with today’s show with some hell yeah wins from our amazing Lifestyle Tradie members.  Hell yeah! These are the legends who’ve been Smashing it in their business, proving that small changes can lead to massive results. Ange, what have we got to share this week?

Ange
First up, we have Zach, a plumber from Victoria, who says, today, one of the guys, quoted, obtained signatures, invoiced, and took payment whilst on site, all without a single phone call to me. So long to the night where I’m sending  Invoices at eight, nine, 10, or even 11 PM and countless hours chasing overdue money. I can already foresee what a game changing process this is, for work and home life. I just want to say a big thanks to everyone at Lifestyle Tradie. You guys are game changers. 

Andy
That definitely deserves hell yeah! Mate, that is incredible. These small things, and for some people they’re not small, can make a huge difference in your business. You’ve brought back time, you’ve got a better structure in place, and I guarantee you, for you and your business, it’s going to run so much smoother now.

Ange
I couldn’t agree more. So next up we have Lorsi who runs an electrical business in New South Wales and she writes, last year we subcontracted to a bigger company installing car chargers under a government grant. This week we want a job to install four car chargers under the same government grant. Quoting against the company we subbied to last year, huge difference in profit margin, go us. 

Andy
Hell yeah, there’s no doubt about it. No matter who you work for, if you’re dealing directly with the client themselves, you make more money. When you’re going through another party, they’re always taking a clip on the way and it does affect your profit margin.

Ange
Exactly. And lastly, we have Lee, who’s a plumber from South Australia. So, this one’s a bit of a long one, but I actually want to share because it gives you such an insight into a business owner who’s transitioning from wearing all the hats to leading a team into the future. So, this is what he wrote. First full week being in the office and not on the tools. Monday, had the itch to go save the day, stayed strong and didn’t go, left the boys to it and they got it sorted. Tuesday. Why am I in here? I should be out making money. Didn’t go out, stayed in, and thought I’d make some calls to outstanding quotes we hadn’t had a response to. Booked in over 15, 000 worth of work for January. Wednesday. I now see my worth in why I should be in here. Everything is running smoothly. Thursday. Computer decided to die, which threw a bit of a spanner in my day, and I worked from the iPad all day. Friday. Loving it in the office. Accomplished so much. Built forms, set new procedures, caught up on all our outstanding loose ends. Can’t wait to keep this going. Hell yeah!

Ange
Wow, what an epic share and that is a big hell yeah!  Mate, you have come so far and everything you explained then is exactly how we all feel. So you just nailed it there. Thanks very much, buddy. Super happy for you. I hope these shares inspire you. And remember, we are here to help you on your journey to trade business success. 

Andy
Let’s start with a home truth that might sting a little. Just because you’re busy doesn’t mean you’re making money. 

Ange
Ouch. 

Andy
I know it sounds weird because in most tradies’ minds, busy equals success. If the phone’s ringing, the jobs are lined up, and you’re running around like an absolute madman, that should mean business is booming, right?

Ange
Well, most would assume so, yes. 

Andy
Yeah, nah. Being flat out doesn’t mean you’re profitable. It just means you’re working hard. And there’s a huge difference. 

Ange
The reality is some of the customers you’re working with are actually costing you more than they’re worth. 

Andy
Think about this. Let’s say you take on a job for a D grade customer, you do the work, everything’s done right, and then boom, radio silence. No payment. Now you’re chasing invoices, wasting time on emails, text messages, phone calls, maybe even taking them to court. 

Ange
And don’t forget the fact that you are already out of pocket having paid for materials and the boys wages.

Andy
Exactly. 

Ange
Or maybe they do pay, but only after dragging it out for weeks, making excuses and stressing you out in the process. And by the time you actually get paid It barely covers the headaches they’ve caused and cost you mooring time and energy that if you worked it out, you didn’t make a cent. 

Andy
Now let’s compare it with that of an A grade or a top notch customer. They book you in, they agree to the price, they pay on time, and they don’t make you want to stab yourself in the eye with a pen. It’s the same amount of work but one is profitable and the other is an absolute nightmare. 

Ange
And this is what most tradies don’t realise. Your customer mix controls everything. 

Andy
And that’s why we’re here. To help you see the real problem so you can fix it. Because until you get your customer mix right, your business will always, I’ll say that again, will always feel like a battle. Alright, so now we know that not all customers are created equal, so let’s break it down and figure out who you should be working with and who you should be getting rid of. 

Ange
This is where the A, B, C, D customer types come in because once you understand what kind of customers you’ve got. You can start making better decisions about who gets your time, your energy and your effort.

Andy
So let’s go through each type, starting with the gold standard, the dream customers. These are the A grade legends. 

Ange
Yes, the A stands for awesome. A-grade customers are the creme de la creme. They are what Every tradie should be aiming for. They pay on time, no chasing invoices, and no stress. The money lands in your account like clockwork. They respect your time and your expertise. They don’t try to haggle you down or tell you how to do your job. These guys have money to spend. They see the value in what you do and are happy to pay for quality. And they make your life easier. They book in, they communicate well, and they trust you to do the right job. 

Andy
Mate, If every customer was an A grade customer, business would feel like a walk in the park. But the problem is most tradies don’t actively focus on attracting these people. 

Ange
Instead, they take whatever jobs come their way and that’s how they end up with C and D customers. But we’ll get to them in a sec. B grade customers stand for better, but there’s room for improvement.

Andy
B grade customers are almost there, but they’ve got a few rough edges. They’re still good customers, just not perfect. They mostly pay on time, but sometimes need a little nudge. They respect your work, but might question pricing here and there. They have money to spend, but might be a little more cautious with it.

Ange
The thing about B grade customers is that they can be turned into an A grade customer with a little bit of education and the right process. 

Andy
Yeah, a few small tweaks like tightening up your payment terms or explaining your pricing better can help shift them up the scale. 

Ange
Now we’re getting into dangerous territory. C grade customers are the ones who start making your business frustrating. These guys could be better. They rarely pay on time. You actually have to chase them constantly. Somewhat respectful, but they do push the boundaries. They have money, but they don’t want to part with it. And they take up more energy than they should.

Andy
C grade customers are the ones who make you think, Oh, why do I keep doing this? 

Ange
And the scary part, a lot of tradies have way too many C grade customers and don’t even realise it. 

Andy
You think, oh, they’re alright, they pay eventually, but the truth is they’re holding your business back. 

Ange
Now, some C grade customers can be saved, if they’re willing to change. If you set clear expectations, some of them will step up. But if they don’t, well, that brings us to the worst of the worst, D grade customers. 

Andy
Yes, indeed. It actually stands for d*ckheads. 

Ange
Well, a nicer way to explain D grade customers is dreadful. 

Andy
I think d*ckhead is a better description. These are the worst kind of customers. And I’m not being too harsh when I say they wreck your business. They never pay on time. Some don’t want to pay at all. They’re rude, demanding, disrespectful. They expect the world for nothing. They drain your time, energy, and patience. They stress you out and make you actually hate what you do. If you’re falling out of love for your business, these guys have a lot to answer for.

Ange
Honestly, these guys need to be cut loose. A. S. A. P. 

Andy
Yeah, and don’t get sucked into thinking, Oh, but it’s a job. I need the work to keep the boys busy. No, you don’t need this kind of work. These customers cost you more than they’re ever worth. 

Ange
So here’s the big takeaway. Most trade business owners finish the end of a financial year, they see their accountant who tells them they made a small profit, broke even, or worst case, you made a loss.

Andy
And then you ask yourself, how the hell is that possible? I worked my absolute butt off this year, and I also employed a bigger team to cope with the workload. 

Ange
And for the punchline, the truth is most tradies have 80 percent of their total revenue and hence work, made up of C and D grade customers and only 20 percent made up of A and B grade customers.

Andy
Your goal must be to turn this on its head. Your business needs to be 80 percent with A and B customers and move the D customers up to C, the C’s up to B and the B’s to A. And if they don’t move, Then you’ve got to strategically move them out. 

Ange
Because when you do that, you make more space to accept A and B grade customers and your business runs smoother, makes more profit, and with way less headaches.

Andy
And let’s be real here. Isn’t that the whole reason you started your business in the first place? 

Ange
All this can be fixed. You just need to know how to fix it properly. 

Andy
Alright, so now you know the difference between A, B, C and D customers, the next step is figuring out who you actually want to work with.

Ange
And let’s be clear, if you don’t define your ideal customer, you’ll keep getting whatever rolls in. Which usually means a mix bag of C’s and D’s with the odd A grade legend thrown in. The best way to take control of your customer mix is to get super clear on your customer avatar, who they are, where they live and what they value.

Andy
So. For someone who’s never heard of any of this marketing jargon, Ange, can you explain what the heck you mean by customer avatar? Because some people might start thinking of the blue aliens when you say avatar. 

Ange
Well, definitely not blue aliens running around a jungle like the movie, but in simple terms, a customer avatar is just a way of describing your ideal customer. The kind of person you actually want to work with. I like to start by asking what type of market segments do you work for? Or maybe let’s say you want to work for. 

Andy
Yeah. And have a really good think about it. Is it the residential market? Maybe it’s strata, real estate, bespoke builders, industrial, or maybe the commercial market.

Ange
So knowing this, think about who is the decision maker for that particular market segment. Is it the busy strata manager with a hundred buildings in the inner west where reliability and a seamless workflow is key? Or maybe it’s a busy mum with two primary school kids who is super house proud. She’s concerned about safety, making the right decision and a quality job at the right price. Or are you doing new work with a local bespoke builder who wants a fair price, a tradie who sticks to a time frame and doesn’t let him down? They’re all very different in what they value. 

Andy
And if you try to market to all of these people at once, you’re going to end up with a mix of jobs that don’t suit how you want to work and run your business.

Ange
Everyone in these market segments are also attracted to you by very different means of marketing. So for example, we were looking at one of our Lifestyle Tradie member websites the other day to help them fix it. They’re Sparkies and the whole website looked like they were professionals that you want for shop fit outs. But when we asked them who they wanted to attract, they said the residential homeowners in North Adelaide. 

Andy
That’s a very different market. 

Ange
That’s right. So what they had didn’t make sense. The message was all wrong. They were talking to the wrong type of customer.

Andy
The thing is, when you’re clear on your ideal customer, your avatar. You can use the right language in the words written in your marketing or use the right pictures that showcase work that is relevant to them. And now you’ll even know which medium of marketing to find them in the first place. No more blowing money or throwing it at a wall, hoping something will stick.

Ange
Exactly. So let’s take charge of this and talk about this in a little bit more detail.

Andy
I’m going old school now, pen and paper time, as long as you’re not driving while listening to this. Otherwise, keep your hands on the wheel. 

Ange
Yes, please do. Okay. So, when thinking about just one of the avatars within a market segment you work with, I want you to ask yourself some questions and write down your answers as you go. Let’s use a residential customer as an example. It’s important to understand their demographic and psychographic. So, let’s start with the demographic. Demographics are things like their age, their income, education level, and where they live geographically. 

Andy
Ask yourself, how old are they? Are they young homeowners, families, retirees? What’s their level of income? Are they in a position to spend money on quality work? Do they value professionalism and experience or are they just looking for the cheapest trade they can find? 

Ange
Exactly. And where do your best customers live? Are they in high income suburbs where people actually invest in their homes? Do they even own their property or are they renters who don’t care about long term quality? 

Andy
All great questions but let’s switch to psychographics. This is all about things like personal values, interests, behaviours, attitudes and opinions. 

Ange
Yes, so ask yourself questions like what activities and hobbies do they enjoy? How do they spend their time and money and do they value quality? What beliefs guide the avatars’ decision? These are all a great starting point to get crystal clear on the decision making you’re trying to attract within the market segment you want to work with. We do loads with this information, but for now we want to be clear on who our A grade customer is and start focusing more on attracting them.

Andy
And that’s where your job management system comes in. You need to cut your data for the last 12 months on the different market segments. Even connect what suburbs keep showing up with the style of work that stood out. That’s where you need to double down. 

Ange
Yeah, so when you can pinpoint where your best customers hang out, it makes your marketing so much easier. Instead of spraying ads everywhere, you target where your best leads are coming from specific to the avatar you’re trying to attract.

Andy
And this is a big one. Don’t just guess who your best customers are, use your data because data never lies. Look at who’s spending the most money with you, look at who’s the easiest to work with, look at the style of work you’re doing because you’ve got to love it.

Ange
When you figure out who’s already paying you well and treating you right. You can go all in on attracting more of these people and start ditching the rest. 

Andy
Alright, so we’ve figured out who your A grade legends are and who the C and D troublemakers are. Now, the big question here is this, what do you actually do about it? Because you just can’t wake up tomorrow and fire half of your customer base, can you? 

Ange
No. 

Andy
I have had that happen before though, I tell you.

Ange
Not a good idea, crew. 

Andy
No, not a good idea. 

Ange
So, we’re not saying you should drop everyone overnight, unless you’ve got cash in the bank and a wait list of A grade customers ready to go. Instead, the smart move is to start shifting your lower grade customers up the scale before deciding who to cut loose. 

Andy
Here’s the reality. Most problems with C & D customers come down to unspoken expectations. They think it’s okay to pay late. They think it’s fine to call you 10 times a day. They think negotiating your price is just part of the deal. Think about that. 

Ange
But if you’ve never told them otherwise, how would they know?

Andy
Exactly. So the first step is resetting the relationship. Next time they try and haggle on price or push your boundaries, you need to draw a line in the sand. 

Ange
Exactly. So this means no more discounts just because they ask. Your price is your price. No more chasing invoices. Make payment terms clear and enforceable. No more endless changes to the job. Define what’s included up front and charge extra for additional work. 

Andy
Some C grade customers will step up. If they realise they can’t take the piss anymore, they’ll respect the new rules. 

Ange
Yes, but others will push back. And that’s when you move to step two, reframing your terms of service.

Andy
It’s time to make sure your business policies match the type of customers you want. For example, if you’re constantly chasing payment, your payment terms need to change. Let me give you some examples, things like upfront deposits if you’re a project based business. Upfront communication on the phone to explain you take payment on completion if you’re a maintenance based business. Payment due before materials are ordered, late payment fees as well. 

Ange
And don’t just assume customers will accept this, make them agree to it in writing. This could be as simple as updating your quotes, your invoices, and your email templates to say something like, All jobs require a 20 percent deposit. Final payment is due on the day of completion.

Andy
Boom! No surprises, no excuses. 

Ange
Yeah. So, if a C grade customer pushes back on this, they’re probably a D grade in disguise. 

Andy
Yeah. Some customers just won’t change. And just because they keep coming back and giving you work, does not mean you need to say yes to working with them. No matter how many times you tell them to pay on time, they won’t. No matter how clear your pricing is, they still haggle. At some point, you have to decide, are they actually worth it?

Ange
And before you pull the trigger, ask yourself these questions. How much money do they actually bring in? Do they cost me more in admin, stress, and wasted time than they’re worth? If you fired them, could you replace them with a better customer?

Andy
If the answer is yes, it is time to cut some of these customers loose. 

Ange
Exactly, but do it professionally. No need for a dramatic breakup, just say something like, Hey Sam, we’re making changes to our business and won’t be able to continue servicing your jobs moving forward. We really appreciate working with you and can recommend a competitor’s name if you need a referral. 

Andy
That’s it. Simple, clean, no hard feelings. 

Ange
And once they’re gone. That space is now open for an A grade customer to take their place. 

Andy
Remember, not all customers are created equal. If your business feels out of control, your customer mix is a great place to start fixing it. The right customers equals more profit and less stress.  

It’s Tradie Dilemma time and this is the Q & A segment where you let us know what you’re having trouble with in your business and we give you our best advice. 

Ange
So today we have a question from Cooper, who’s an electrician in Queensland, and he writes, Hey Andy and Ange, I run a small electrical business with my wife and we’re flat out all the time. I keep hearing about AI and automation, but honestly, I don’t even know where to start. I barely have time to keep up with invoicing, let alone figuring out some fancy tech. Is there something simple I can use that won’t take ages to set up, but will actually help take some of the load off? 

Andy
Okay. Firstly, I want to say congratulations on being busy and hopefully your business is running really well and you’re making good net profit at the end of the day. AI. Well, AI is an absolute beast. And if you haven’t touched on it as yet, there’s a few different ways you can. Now, some job management systems already have AI included in their program and they’re helping with writing invoices, doing quotes and some of them are about to collect money. So times are moving really, really fast. Now I just want to talk about GPT. Most people have been using that for a good few years now, and people are getting a great response from it. So that’s probably a place where I would say, start with chat GPT and start using that with invoicing, quoting, talking to customers and having responses. Now, I just want to say, the AI game has changed. Some of you may have heard that DeepSeek, a Chinese company, has come in, and it’s as good as ChatGPT  at this present point. Some are saying it’s better, and it costs about a tenth of the price. Now, what’s going to happen next in AI? No one knows. But for me personally, it’s the perfect time that every single trade business out there has to get their business model, right? Because soon there’ll be AI assistants that will be looking at helping you run a lot of the front end and back end of your business. So stay tuned. 

Ange
Good on you, Cooper, for actually being conscious of the fact that AI and automation is coming literally like a freight train. Like Andy said, it’s important to get your business model right first, but definitely stay in touch with these changes because it’s coming thick and fast.

Andy
Thanks for writing in and sharing your dilemma, Cooper. We appreciate your time.

Ange
So remember, if you have a question or dilemma in your business, reach out to us and let us know what we can help you with.  

Andy
Subscribe to The Tradie Show, wherever you get your favourite podcasts.  Rate and write us a review or for more information about Lifestyle Tradie, head to lifestyletradie.com.au.