Every SME has had at least one customer that “looked like revenue” at the start and “felt like damage” by the end.
The emails multiply. The calls run long. The requests keep changing shape. The invoice is questioned line by line. Your team starts bracing when the phone rings. Work that should take a day stretches into three. The relationship becomes a constant negotiation, not a partnership. Meanwhile, the rest of the business slows down because attention is being siphoned into one account that somehow never settles.
This is operational friction, and wrong-fit customers are one of the most common causes.
Operational friction is not just “annoying clients.” It’s the drag a business experiences when the work it sells does not match the way it is built to deliver. When that mismatch repeats, it converts into measurable cost: lower margins, worse cashflow, slower delivery, burned-out staff, and less capacity for the customers you actually want.
In Ireland, that cost stacks on top of an environment where many SMEs are already under pressure. Chartered Accountants Ireland reported in 2025 that costs had increased for almost 80% of small Irish businesses over the prior six months, with staff costs the biggest challenge, followed by operational costs and regulatory compliance costs. When your baseline cost base is rising, you can’t afford friction that quietly eats time and margin.
Amergin’s work sits right in the middle of this reality. Amergin positions itself as integrated consulting for Irish SMEs, supporting businesses “from compliance and finance to growth,” helping owners manage accounting, payroll and finance with confidence while building strategic capacity in marketing, operations and planning. Wrong-fit customer friction is exactly the kind of issue that spans finance, operations, and go-to-market. It shows up as “messy customers” on the surface, but the fix is usually a foundation upgrade: clearer positioning, tighter qualification, better pricing and scope control, and stronger financial visibility.
This article unpacks what wrong-fit customer friction really is, why it happens, how it hides inside “growth,” and what Irish SMEs can do about it without turning into a bureaucratic corporate machine. It also shows how Amergin can help you reduce friction by aligning who you sell to with how you deliver.
A wrong-fit customer is not necessarily a bad person or a “problem customer.” Often they are perfectly reasonable. The issue is structural: they are a mismatch for your business model.
Wrong-fit can mean many things depending on what you sell.
Sometimes the customer’s expectations require a level of service, speed, customisation, or risk transfer that your pricing doesn’t cover. Sometimes they want outcomes you cannot reliably deliver without breaking your internal process. Sometimes they buy for the wrong reason and will never be satisfied because your service is not designed to solve the problem they believe they have. Sometimes they require complex invoicing, procurement, reporting, or approval cycles that add overhead you didn’t plan for. Sometimes they pay late, creating cashflow strain even if the account is technically “profitable.”
This is why operational friction is so insidious. It’s not always visible in revenue figures. A wrong-fit customer can increase top-line revenue while decreasing the actual performance of the business.
Gartner has a useful lens here from outside the SME world that still maps perfectly onto SME pain. In 2025, Gartner recommended cost-to-serve (CTS) modelling to reveal “true profitability” at the transaction level and highlighted that traditional accounting practices can neglect the cost of supporting customers and products, especially where complexity is introduced by customer behaviours and product attributes. Even if you never build a formal CTS model, the logic is deadly relevant for SMEs: two customers paying the same price can cost wildly different amounts to serve. If you don’t measure or manage that difference, wrong-fit customers quietly become a margin leak.
Operational friction is not one event. It’s a pattern that spreads across your operating system. It usually starts in go-to-market and ends in finance.
It begins with how you attract customers. If your messaging is broad or your offer is vague, you’ll pull in people who interpret your promise differently. That difference becomes work later. If your marketing emphasises “we’ll do anything” energy, you will attract customers who want anything. Your sales process then tries to close the deal by being flexible. Flexibility turns into ambiguity. Ambiguity becomes scope creep. Scope creep becomes delivery stress. Delivery stress becomes margin erosion. Margin erosion becomes cashflow tension. Cashflow tension becomes leadership anxiety. Anxiety creates reactive decisions, which brings in more wrong-fit customers, because the business feels like it needs any revenue it can get.
It’s a loop, and it tightens over time.
Andreessen Horowitz captured the “north star” importance of ICP well, stating that your ideal customer profile determines who you’re building for and selling to, and that ICP misalignment can be a hidden cause of common problems across the company, from pipeline gaps and bloated marketing spend to broader operational headaches. SMEs feel that misalignment as friction, because there aren’t enough layers in the organisation to absorb it.
Amergin’s marketing services offering is built around preventing that loop by design. They describe acting as a go-to-market and growth partner that defines ICP and positioning, prioritises channels and messaging, then runs monthly execution sprints with clear reporting. In other words, they start by tightening customer fit so that growth creates leverage rather than chaos.
Now let’s get concrete about what friction looks like inside an SME.
Wrong-fit friction often shows up first as sales strain.
The sales cycle feels unusually heavy. The customer asks for endless customisations before they sign. They push for discounts early. They want exceptions to your standard terms. They request unusual reporting or approvals. They want guaranteed timelines that require heroics. Your gut senses the mismatch, but the business wants the revenue. You close anyway.
That is often the moment where the business accidentally commits to a delivery model it does not actually have.
What makes this particularly dangerous for SMEs is that the cost of exceptions is nonlinear. One exception might be manageable. A handful of exceptions becomes a new way of working that breaks standardisation. Standardisation is the hidden engine of SME scale.
If your business is forced to reinvent its workflow for each customer, you don’t have a scalable operation. You have a series of bespoke projects. Bespoke can be profitable, but only if you price and structure it like bespoke. Most SMEs accidentally do bespoke delivery while charging semi-standard prices. Wrong-fit customers accelerate that mistake.
Delivery friction is where the damage becomes felt emotionally by teams and financially by owners.
Scope creep is one of the clearest paths from wrong-fit customer to operational drag. Even the best-intentioned customers will push boundaries if the boundaries are not explicit, or if they are buying a result that inherently includes ambiguity.
Many professional services businesses experience this because the work is knowledge-based and outcomes are co-created with the client. If the client is unsure what they want, or if their internal stakeholders are misaligned, the service provider becomes the translator. Translation takes time, and time is the core unit of cost.
This is where the “cost-to-serve” idea stops being theoretical. Gartner notes that profitability can look different when you allocate costs based on complexity and customer behaviour, and that CTS can reveal true profitability at transaction level. Wrong-fit customers are typically complexity multipliers: more interactions, more changes, more exceptions, more escalations, more coordination.
If you don’t track time or effort properly, friction turns into invisible labour. Invisible labour is the most expensive type because you don’t notice it until your team is exhausted or your margins collapse.
This is also where businesses start saying, “We’re busy but not profitable,” which is one of the most common symptoms of wrong-fit customer mix.
Operational friction is not just additional work. It’s the kind of work.
Wrong-fit customers often create high context switching. They require bespoke explanations, bespoke documentation, bespoke handling, bespoke processes, and bespoke exceptions. That forces your team to shift mental gears repeatedly, which reduces throughput even on tasks unrelated to that customer.
The result is that the business feels slower. Not because people are lazy, but because the system is being forced to operate in too many modes at once.
This is why founders often describe wrong-fit customers as “energy vampires.” They’re not always being unreasonable. They’re just demanding a delivery style your business is not built to provide efficiently.
Finance is where operational friction becomes existential.
If wrong-fit customers lead to scope creep and rework, your gross margin declines. If they lead to delayed approvals or disputes, your accounts receivable cycle extends. If they lead to complicated billing, invoicing becomes slower and collections become harder. If they pay late, your cashflow becomes unpredictable.
Amergin’s accounting services page speaks directly to the practical reality that “good cashflow management is crucial,” that you must pay bills while waiting for customer payments, and that many companies fail because of poor cash flow, not because they weren’t profitable. Wrong-fit customers are a common reason profitable work becomes poor cashflow. They convert delivery variability into payment variability.
In Ireland, record keeping and compliance also sit in the background of this. Revenue explains that business records should confirm information in tax returns and should clearly show the accounting process, and that even if an agent or accountant keeps records on your behalf, you remain responsible, and originals must be kept for six years. When your customer base becomes messy, your documentation often becomes messy too: more credit notes, more adjustments, more disputes, more partial deliveries, more exceptions. That creates administrative load and risk, not just annoyance.
Companies also have corporate record obligations. The Irish Statute Book sets out in the Companies Act 2014 that adequate accounting records must correctly record and explain transactions and enable financial position and profit or loss to be determined with reasonable accuracy. The CRO echoes this requirement by referencing Section 282 and stating companies must keep adequate accounting records that correctly record and explain transactions. Operational friction makes it harder to keep the business clean, and “unclean” operations create finance chaos.
This is one reason friction is a strategic issue, not just an operational one. If the business becomes difficult to account for, it becomes difficult to manage.
SMEs rarely choose wrong-fit customers because they want friction. They choose them because of understandable incentives and constraints.
Sometimes the business is early-stage and needs cash, so it accepts anything that pays. Sometimes the market is tight and the owner feels pressure to “keep the pipeline full.” Sometimes the business is transitioning offers and hasn’t clarified positioning. Sometimes the website promises too much. Sometimes a referral came from a good source, so the business assumes it will be a good fit. Sometimes the sales process is driven by optimism rather than qualification. Sometimes the team is afraid to say no.
There’s also a subtler factor: SMEs often underestimate how expensive service complexity is because traditional accounting can hide it. This is exactly what Gartner warns about when noting that traditional accounting practices can neglect to allocate the cost of supporting customers and products due to operational complexity. In SME terms, it means you can be “profitable on paper” while your time and attention are being drained by a subset of customers.
When costs rise, this becomes more dangerous. Chartered Accountants Ireland’s survey highlights staff costs and operational costs as major pressures on Irish SMEs. If your labour is more expensive and harder to hire, then wasted labour is a direct threat to resilience.
The Central Bank of Ireland has also pointed out that SME profit margins can be sensitive under adverse scenarios, with profit margins falling sharply in stress conditions. One of the ways SMEs protect resilience in uncertain conditions is by reducing avoidable complexity. Wrong-fit customers are complexity you can choose to stop buying.
Operational friction often becomes “normal,” which is part of why it persists. Teams adapt. Owners rationalise. The business becomes a machine that runs loud.
A cleaner way to see it is to look for patterns.
If you notice that a minority of customers generates a majority of escalations, that’s friction. If certain customers always trigger scope debates, that’s friction. If your team’s delivery time varies wildly by customer even when projects look similar, that’s friction. If you routinely give away extra work to “keep them happy,” that’s friction. If your invoices for certain customers are always late or always questioned, that’s friction. If certain customers require unusually detailed reporting or manual admin, that’s friction. If certain customers are always “urgent,” that’s friction. If your best team members keep getting pulled into one account, that’s friction.
Those patterns are not personality issues. They’re fit issues.
A common fear is that addressing wrong-fit customers means dramatic decisions. It doesn’t. It usually means redesigning your system so wrong-fit customers are less likely to enter, and less likely to damage you if they do.
This is where foundations matter: positioning, ICP, packaging, pricing, contracts, operations, and financial visibility. They are all friction controls.
The simplest way to reduce wrong-fit friction is to stop selling to the wrong people.
That requires an ICP that is operational, not aspirational. It should describe the customers who get the most value from you and who you can serve efficiently, profitably, and confidently.
Amergin’s marketing services page describes this foundation approach explicitly: defining ICP and positioning, then prioritising channels and messaging and running execution sprints with reporting. The “ICP first” framing is not a marketing trend. It’s an operational safeguard.
Once you define ICP, define the anti-ICP as well. The anti-ICP is the category of customer you are no longer willing to bring into your business because they predictably create friction. This could be a segment that always demands heavy procurement overhead, or a segment that always wants urgent turnaround, or a segment that chronically pays late, or a segment that doesn’t have internal decision clarity and therefore causes endless revisions.
This isn’t about judging those customers. It’s about choosing a business model you can sustain.
If you know some customers require more interactions, more reporting, more revisions, or more risk, you either price for that complexity or you remove it.
This is where the cost-to-serve concept becomes practical for SMEs. Gartner’s CTS framing is essentially telling organisations to allocate costs based on complexity drivers so profitability is not distorted. SMEs can do a lightweight version by identifying the top complexity drivers and applying them as pricing levers.
If the customer wants weekly reporting calls, that is a priced feature. If they want multiple stakeholder revisions, that is a priced feature. If they want short turnaround, that is a priced feature. If they want custom invoicing formats or purchase order handling, that is a priced feature. If they want on-site support rather than remote, that is a priced feature.
When complexity is not priced, it becomes friction.
Scope creep is often treated as a delivery problem, but it frequently starts as a sales problem.
If you sell outcomes without defining boundaries, the customer will naturally try to expand the meaning of “done.” If you sell “support” without defining what support includes, the customer will request everything. If you sell “strategy” without defining outputs, you will be trapped in endless discussions.
The fix is to sell with structure. That doesn’t mean rigid or unfriendly. It means explicit.
A key lesson in Amergin’s growth-sprint framing is the focus on defined deliverables and sprint cycles, rather than open-ended “marketing help.” They describe 2–3 high-leverage deliverables per month and report and check-in cycles. That is an example of packaging work in a way that reduces scope ambiguity and increases predictability.
The principle can be used across any service business: define what happens in a period, what is included, and what triggers a change request.
Your team experiences friction before your P&L shows it. When a team is under pressure, quality drops and rework rises, which feeds more friction.
Guardrails can be simple: a standard onboarding process, a standard communication cadence, a clear change request mechanism, and clear ownership of decisions. The goal is to reduce context switching and stop escalation from becoming the default path.
This is also where payroll and compliance systems matter. When operational friction increases, admin workload increases. Amergin highlights the reality that payroll processing is important but often non-core and positions outsourced payroll as cost-effective and confidential. The more friction you have in operations, the more you need dependable back-office systems so the business doesn’t get overwhelmed by compliance overhead.
Many SMEs treat customer problems as “front of house” and finance as “back of house.” Wrong-fit customers prove that separation is fake.
If customers create repeated invoice disputes, delays, or adjustments, that should be treated as an operational fit issue, not only as an accounts issue.
Revenue’s guidance is clear that records should show the accounting process and support the figures in returns, that responsibility remains with the business even if an accountant holds records, and that originals must be kept for six years. Clean operations make clean records possible. Messy customers create messy records.
The Companies Act also expects adequate accounting records that correctly record and explain transactions and allow financial position to be determined with reasonable accuracy. If you want to reduce compliance stress and improve decision quality, reducing operational friction is one of the most direct ways to do it.
When wrong-fit customers are a major revenue source, it can feel risky to change. But staying stuck has its own cost: it blocks the business from building a customer base that creates leverage.
The transition is rarely instant. It usually looks like tightening qualification, adjusting pricing, and gradually shifting the customer mix over time.
This is also where leadership support matters. Many owners know what they should do, but they don’t have the time or the confidence to restructure offers, pricing, and qualification while still running the business.
Wrong-fit customer friction is a cross-functional problem. It sits at the intersection of marketing, sales, operations, and finance. That is why it persists when businesses try to fix it with only one tool, such as “better customer service” or “better contracts” or “more marketing.”
Amergin is positioned to help because its model is integrated across those functions. On its homepage, Amergin describes supporting Irish SMEs “from compliance and finance to growth,” helping owners manage accounting, payroll and finance with confidence while building strategic capacity in marketing, operations and planning.
From the go-to-market side, Amergin’s marketing services describe defining ICP and positioning and then running execution sprints with reporting. This is foundational for friction reduction because the best way to deal with wrong-fit customers is to prevent them entering through clearer targeting and messaging, and through a sales process that qualifies for fit rather than only for willingness to pay.
From the finance side, Amergin’s accounting services emphasise not just bookkeeping and compliance reporting, but also helping determine KPIs and providing support for planning, including cashflow projections and budgets. That matters because friction is often invisible until it becomes a cash problem. If you develop KPI discipline around margin, cash collection, and delivery efficiency, you can spot wrong-fit friction early and correct course before it becomes structural.
From the compliance side, Amergin’s model can help keep records, reporting, and tax obligations stable even as you adjust your customer base and operations. In Ireland, where Revenue expects records to clearly show the accounting process and places responsibility on the taxpayer, strong systems reduce stress and risk.
From the strategic side, Amergin’s approach of being a partner for growth without requiring a full in-house team is useful for SMEs who need to redesign positioning and operations while still delivering day-to-day.
The practical outcome of that support is not simply “better marketing” or “better accounts.” It’s a business that attracts more right-fit customers, sets clearer expectations, delivers with less chaos, invoices with fewer disputes, and builds predictable profitability.
Many SMEs try to grow by adding more activity: more leads, more campaigns, more sales calls, more offers, more partnerships. That can work, but it often fails when the underlying operation is already noisy.
Reducing wrong-fit customer friction is a quieter growth strategy, but it is often more powerful. When you reduce friction, you increase capacity without hiring. You protect margin without raising prices aggressively. You free leadership attention without adding management layers. You reduce compliance stress without doing extra paperwork. You make the business more resilient to cost pressure because you are not wasting expensive labour on complexity that isn’t paid for.
In an Irish SME environment where costs have been rising and operational and compliance burdens are frequently cited as challenges, friction reduction is not a “nice to have.” It’s a resilience move.
And the most effective friction reduction move is simple to state and hard to execute: decide who you are for, and build the business to serve them exceptionally well.
Amergin Consulting Ltd. is a Dublin-based chartered accountancy and business advisory firm serving Ireland’s SMEs and growth companies across construction, technology, professional services, and renewable energy.
We specialise in Accounting, Payroll, Taxation, and CFO Services that help businesses build stronger foundations for profit and compliance.
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This article is for general informational purposes only and does not constitute financial or tax advice. While every effort has been made to ensure accuracy, legislation may change upon enactment of the Finance Act 2025.
Public should seek professional advice tailored to their specific circumstances before acting on any points discussed.
Amergin homepage, describing integrated consulting for Irish SMEs across compliance, finance, and growth.
Amergin marketing services page, describing ICP and positioning, monthly execution sprints, and reporting.
Amergin accounting services page, describing bookkeeping, KPI support, business planning, and cashflow projections and the link between cashflow and failure risk.
Revenue Commissioners guidance on keeping records, including responsibility for record keeping and six-year retention of originals, and the expectation that records show the accounting process.
Companies Act 2014, Section 282 (Irish Statute Book), setting out basic requirements for adequate accounting records.
Companies Registration Office (CRO) guidance on “Proper Books,” referencing the Companies Act requirement for adequate accounting records that correctly record and explain transactions.
Gartner press release on cost-to-serve modelling and the idea that traditional accounting can miss the cost of supporting customers due to complexity, and that CTS can reveal true profitability at transaction level.
Andreessen Horowitz (a16z) discussion of ICP as the “north star” and how ICP misalignment creates company-wide headaches.
Chartered Accountants Ireland news release summarising the SME Business Sentiment Survey (cost increases, staff costs, operational and compliance costs).
Central Bank of Ireland Staff Insight on SME profitability under baseline and adverse scenarios (profit margin sensitivity under stress).