The Psychology of Customers
Throughput Show Episode 10 featuring Mike Fritz (originally aired 11/7/2025)
Welcome to Episode 10 of The Throughput Show. I am joined by Mike Fritz, a shop owner who has gone hard down the acquisition path over the last few years. Mike has bought seven machine shops in about thirty-five months and recently closed on his first automation company. He will be the first to tell you he cannot program a CNC machine, but he has built his career on something else entirely: learning how to “program” customers.
Mike’s core belief is simple. The ability to attract, keep, and grow customers is what makes a manufacturing company scale. In this episode, he breaks that idea into three very concrete customer types and shows how to think about each one differently: current, dormant, and new. Most shops obsess over the third category. Mike argues the real money is in the first two.
1. The Three Customer Types: Current, Dormant, New
Mike starts with a clean, simple framework. Every customer in your world falls into one of three buckets:
Current customers: Anyone who has sent you work in roughly the last 12 months, unless they have a naturally longer buy cycle.
Dormant customers: Companies that used to give you work but have not placed an order in 12 months or more.
New customers: Companies that have never bought from you or are so far removed that you are effectively starting over with a new decision-maker.
For each group, the “psychology” is different:
Current customers: “Should I give you more work?”
Dormant customers: “Should I come back?”
New customers: “Should I move work away from my existing vendor and take a risk on you?”
That last question is the key. Winning a “new” customer is usually not about getting fresh work that never existed. It is about convincing them to detach work from an existing supplier and hand it to you, with all the friction, cost, and risk that comes along with that.
2. Current Customers: Top-of-Mind and the Three Questions
For current customers, Mike says the primary psychology is simple: “Will I trust you with more?” The foundation is the familiar triangle of price, delivery, and quality. If you are in their acceptable price range, hitting deadlines, and passing inspection, there is no logical reason they should not send you more work.
But performance alone is not enough. You have to be top of mind. Mike shared that when his team physically visits a customer’s plant, they almost always walk out with new opportunities. Customers often do not even realize what the shop can do until someone is standing there pointing at parts on a rack.
His playbook for current customers:
Build a list of everyone you have done work for in the last 12 months.
Prioritize your top accounts and schedule regular onsite visits or calls.
In each visit, ask the same three questions:
How are we doing on delivery and quality?
Is there anything we could do better, especially to make your internal systems and job easier?
Are there any other parts you would like us to look at and quote?
If the answers to the first two questions are rough, the goal is not to chase more work. The goal is to rebuild trust and fix delivery or quality gaps. If those two pillars are strong, then it is time to ask for more projects and explore what else you can take on.
Mike also uses simple “capacity” touchpoints to generate work. When a big job ships and some mill time opens up, he sends a quick note to key accounts letting them know they have room if the customer needs anything. Over time, those small nudges add up.
3. Dormant Customers: Why They Left and How to Reengage
Dormant customers are the people who have worked with you in the past but have gone quiet. Mike’s first question is always, “Why did they leave?”
Common reasons:
They brought the work in-house.
They found a cheaper vendor.
They had quality or delivery issues with you.
A new purchasing or supply chain manager came in and brought their own vendor list.
When Mike buys a shop, the dormant list is often the biggest asset he inherits. He works that list deliberately with reengagement language, not “brand new” language. A typical outreach might acknowledge that the shop has done work in the past, express a desire to reconnect, and ask for a short conversation to learn what they are working on now and whether there is a way to help again.
Sometimes the answer is that the work truly is gone or internalized. Sometimes the old problems are still too fresh. But other times, the conditions that caused them to leave have changed. A new buyer is in the seat. A small garage shop they switched to has hit capacity. Or their internal machine shop is overloaded and needs overflow. Dormant accounts will not all return, but a few can turn into very meaningful customers when you show up again with humility and a plan.
4. New Customers: You Are Asking Them to Change Vendors
Mike draws a hard line between “new work” and “new customers.” New work might come from current or dormant accounts. New customers almost always involve moving work away from someone else. That is a different level of difficulty and a different psychology.
When you chase a brand-new logo, you are asking them to:
Take business away from an existing supplier.
Re-quote, re-program, and re-tool parts.
Possibly pay internal “movement” costs.
Absorb 90–120 day terms and big up-front material spends on your side.
Mike shared examples of large half-million-dollar programs that look exciting on the surface, but come with 120-day terms and rolling fronts that turn you into a bank if you are not careful. He has also only been stiffed twice at QuickTech, both times on first-time jobs for brand-new customers.
His advice: Spend a year exhausting current and dormant customers before you pour energy into new logos. New customer work is the most expensive to land, the slowest to close, and often the riskiest to finance.
5. Managing Concentration, Communication, and Contracts
In the Q&A, we moved into some more advanced “customer psychology” topics: concentration risk, communication practices, and contract pressure.
Customer concentration: When Mike bought QuickTech, one customer was 75 percent of revenue. Today, that is down to the low 40s, not because the big customer shrank but because he deliberately grew other accounts. The strategy was not to “hold back” the big customer. It was to serve them extremely well, use the resulting margin to invest in marketing and sales, and go win more work from others.
Progress updates: For top accounts, his teams send short Friday updates. Simple notes like “Part 777 hits the mill next week” or “Part 45555 is on track for Monday” go a long way with supply chain teams, especially in a world where most shops communicate poorly.
Master agreements and penalty clauses: On the automation side, Mike is seeing more contracts with penalties and aggressive language. His stance is to be very cautious. They will negotiate hard, add time-and-materials clauses for overages, and are willing to walk away from seven-figure projects if the risk is too great. You cannot sign contracts that can sink the company if the “custom” work goes sideways.
The through-line is trust. Current customers send more work when you are reliable, visible, and honest about what you can and cannot take on. Dormant customers come back when you own the past and offer a better path forward. New customers move work when the pain with their current vendor outweighs the friction of change, and you convince them you are the safer long-term bet.
Key Takeaways / Best Practices
Categorize every account into current, dormant, or new and treat each group differently.
Focus first on current customers; they are the fastest path to more revenue.
Use regular onsite visits and the three questions:
How are we doing on delivery and quality?
What can we do better to make your life easier?
What else can we quote for you?
Make yourself top of mind with light, consistent communication about capacity and progress.
Work your dormant list with reengagement messaging and curiosity about why they left.
Treat “new customers” as vendor-change projects, not just fresh RFQs.
Watch customer concentration, but use big customers to fund growth into others, not as something to fear.
Be cautious with penalty-heavy contracts, especially on custom automation work; negotiate safeguards or walk away.
Q&A From the Episode
Q1: Should I promote my open capacity to customers, or will it make me look weak?
Answer: Mike’s view is that if you are consistently strong on quality and delivery, promoting capacity is a positive signal, not a negative one. Many supply chain and purchasing people simply do not think that deeply about why you have capacity. A short, consistent message like “We just wrapped a big project and have some mill time open. If you have anything that needs attention, let us know” keeps you top of mind. It works best as part of regular communication, not a desperate one-off plea.
Q2: What if a customer says they want me as an exclusive supplier, but they will not send more work?
Answer: Mike’s advice is to keep the focus on growth and service, not ultimatums. Continue to communicate that you are seeking to grow and would love a shot at their new parts. If there have been issues in the past, clearly explain the fixes you have put in place, whether it is new machines, better systems, or improved processes. Over time, consistent performance and transparency make it easier for them to trust you with more work, and you always retain the option to find additional customers elsewhere without making it a threat.
Q3: How should I respond when a current customer casually asks me to quote a part another vendor is running?
Answer: Mike typically asks a few light questions: is the part currently made in-house or by another vendor, and what kind of volumes or programs are involved. He then aims to quote quickly, using a streamlined quoting process that does not burn huge engineering time. The key is to follow the quote with a short meeting or conversation, so you are not left in the dark if you lose it on price or other factors, and so you can learn what they are really trying to solve by asking you to quote.
Q4: Is it smart to ask for a target price when quoting, or does that backfire?
A: Mike does ask about target price, but he expects buyers to guard it. Instead of pushing, he leans on annual estimated usage. If he understands quantity and frequency, he can shape pricing much more intelligently. A part that runs two or three times a year is a different pricing conversation than a part that will have regular blanket orders. Usage gives him the flexibility to offer better pricing where volume supports it, without getting stuck chasing a hidden target.
Q5: How should shops deal with penalty clauses in large master agreements?
A: Mike said they are seeing more of those clauses, particularly on custom automation, and they approach them very cautiously. On large, multi-year agreements, his teams negotiate to remove or soften penalties and add time-and-materials protections if projects run beyond scope. If a contract would put the company at risk on a truly custom solution, they are willing to walk away rather than accept terms that could sink the business. The language has to match the reality that the customer is asking for something that does not yet exist.