Bad customers are costing you more than you realize.  You already know that some customers are less profitable and more difficult to serve than others.  Accepting lower margins on some accounts and making higher margins on others seems reasonable, especially if your sales are slow. If your business has limitless resources and you have unlimited patience, then you can afford this overall profitable mix of good and bad customers.

Here are some types of bad customers to get read of:

1. Slow-paying customers:  These customers consistently pay late and only after a series of follow-ups calls
2. Customers with constantly-changing and ever-expanding needs:  These folks have full-service expectations with limited-service budgets, and are typically the bane of service firms.
3. Price-sensitive, demanding customers:  You offered incentives to these customers to attract new business and hope to nurture their accounts to targeted levels of profitability.  Or you accepted lower prices because you were convinced that these customers would require fewer resources or accept no-frills product lines.  Instead, these customers resisted standard pricing and insisted on high service levels and numerous product features.
4. Conniving Customers:  These customers seem to have legitimate complaints but they misrepresent problems to extract restitution in the form of full refunds or heavy discounts.

Holding onto a bad customer prevents you from serving the good ones.  Therefore cut your losses early.