Why firing your customer could be your best deal ever
The customer is always right
The customer is always right according Stew Leonard:
- Rule 1 The Customer Is Always Right!
- Rule 2 : If The Customer Is Ever Wrong, Reread Rule 1.
This should be adjusted to:
If the customer is wrong, then they might not be your customer anymore.
In the event
At a moment of time or during:
- The sales process
- A first project with a customer
- A standing relation with a customer
When:
- Increasingly more service is needed without price adjustment
- Harsh terms are imposed
- Changes of direction are required
- Clueless customer is requiring your attention
- The ever complaining customer is wasting your time
- Discussing every item on your invoices
- Decreasing revenue due to less sales
- Utterly important customers generating little revenue
- Not paying after extended payment terms
- Employees feel threatened or abused by a customer
- Ever changing purchase orders
Then
It might be time to think about firing the customer.
Serving unprofitable customers with exhausting relationships is not sustainable.
Math: cost vs benefit
It comes down to cost benefit analysis:
- Cost:
How much does it cost to keep the client and service, support, discuss for each and every item ?
Thus wasting your capacities and resources.
- Benefit:
What’s the benefit of having this customer?
What does this customer bring ?
Revenue, margin, word of mouth, lead generation, referral.
You have to do the math
Not keeping unhappy customers
Maintaining unhappy customers will only cost you money:
- They will consume more time, effort and capacities from your workforce and company
- They will not recommend you to their peers
- They could spread a negative buzz into your market
Whatever you do it will not rape the benefits as you could receive from other customers in the same time, with the same effort or capacities.
So in the end you are losing twice: more time and no leverage.
Hence firing these customers might be your best deal ever.
How to fire tactfully
Firing your customers takes courage, but it is for the best of the company and business.
Instead of increase your prices in order to drive your customer away, it is best to have a meeting or at least a conference call explaining your services are no longer meeting his demands and needs.
If there are any disagreements then they need to be addressed and clarified.
Allow for discussion and explaining their concerns.
In this way you can separate and end the relationship without a fight divorce.
Offer alternatives: other services or your competitors
Of course during the meeting or conference call issues can be explained and understood. Just make sure you take the right decision. One of the main goals is to keep your business in good public standing.
When was the last time you evaluated your customers on cost / benefit analysis ?
How many did you fire last time ? None or one ?
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