Is It Time to Fire a Customer…or Two?

by admin | Feb 24, 2015 | B2B Sales, Client Experience

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“Fire a customer? Absolutely ridiculous…I would get torn to shreds on social media! How could you even suggest such a thing?”

Those thoughts probably went through your head just a few seconds after you thought, “Man, I would so love to do that!” You would love to do it, because you know that there a handful (hopefully not more) of customers that are sucking the life blood out of you and your organization. They cost you time, money and resources. They discourage your staff, dominate your customer service resources and are always looking for the ‘good guy rate’ on everything.

So what if firing a customer was a legitimate option in your business tool belt? How would you go about it?

Know Thyself

The first thing you have to do is an internal audit…on yourself and your company. What’s important to you? What are your values and culture? What do you do best and still make money at? How does a controlling, inflexible customer affect your organization? Which size company is easier and more profitable for your company to deal with? What is it that makes you cringe when you see a customer’s name come up in your email inbox?

These are just a few of the questions you may need to answer frankly, and without equivocation, in order to clearly define what your ideal and unacceptable customers look like. There is no shortcut for this process. You need to take the time to sit down and develop a chart of positive and negative customer traits that you can then translate into a real world description of who you want to do business with.

Set the Limits of Acceptability

Face it, not every customer is going to be ‘ideal’. We live in the real world of a sliding scale of customer response, attitude and profitability. You may have really profitable customers that are tearing the heart out of your account team. You may also have some small customers that you dearly love working with, but you can’t make a dime on. And then there are those you can’t stand working with, who chew up your time, talent and resources and that you make a pittance on.

While the latter may be the no brainer for the “pink slip” list, the others in the list might also need to be looked at carefully. To make a good business decision on who you do business with, you need leverage your learnings from your internal assessment to set limits of acceptability. For example, you may be willing to endure the negatives that go along with working with your cash cow, but you need to understand when they cross the limit and for the good of your business you need to send them packing. The same with the little guy you love. If you can’t afford the ‘pro bono’ work right now and they don’t have the significant upside to merit the investment, you may also have to help them find a more appropriate partner for their work.

In either case you need to decide where, and with who, you are going to draw the line.

Have the Hard Conversation

Once you have decided who you can’t live, with you need to have the hard conversation with them. You can’t just stiff them or slowly withdraw your services until they get upset and leave. That would certainly ignite a firestorm of negative PR. But you do need to sit down and have a frank conversation about the nature of your relationship and make some positive suggestions about who would be a better fit for them. The same with the smaller or unprofitable customers that you really like. In any and all cases, the end game is to make the parting as amicable as possible.

And don’t forget about the internal conversations as well. If the customer is a real nightmare, you probably won’t get much push back from your staff. But if someone’s commission hangs in the balance, you will need to make sure they understand the significance of working with compatible, profitable customers so that your business can grow. Depending on how team-oriented they are, you may be looking for some new staff as well…

Review and Reassess Regularly

In business, as in life, nothing is forever. Things change. Organizations evolve. Processes and technologies improve. Staff and management mature and grow. So you need to plan for regular assessments of your customers, services, products, and processes. If things have changed, than go back and modify your matrix for what is an acceptable customer relationship. And then apply it to your current customer base. And who knows, it might be time to revisit some of those customers you loved to work with but couldn’t make money with. If you remained on good terms, after parting company, there is a possibility that you could be a better match for them the second time around.

So what’s the bottom line? If you are going to do your best work and empower your company to achieve its maximum potential, every now and then you have to fire a customer…or two! And don’t worry to much about the flack you might get…the benefit you will receive, from being released to serve your good customers to the fullest, will far outweigh any negatives.

 
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