I have a theory. If companies spent some time on firing their bad customers rather than only focusing on acquiring more customers, they would be a lot more successful. I know we’ve always been told that the customer is always right, but the truth is some customers are just more trouble than they’re worth. And if you don’t know when it’s time to let a customer go, you could end up wasting a lot of time, energy, and money dealing with the constant hassle they create.
It’s actually one of the lessons I learned early on when starting my own business. Like most people who start their own company, I was concerned with generating as much business as I could. I got too caught up in the quantity of my customers rather than the quality of my customers. Big mistake.
I quickly found that not all customers are the same. The low quality customers always wanted something for nothing. They always made unreasonable demands, and they ended up eating up a lot of my time and patience. And whenever I did cave to their demands, it would usually end up costing me money. It was all because I was afraid to let a customer go.
Now, I’m not saying you need to let go of any customer who causes you even the slightest inconvenience. That’s not smart business. But you do need to be willing to take a step back and truly examine the profitability of your customers. You need to look at them and ask yourself if continuing to take their business is worth the hassle they put you through. In other words, is that juice worth the squeeze?
How do you know if it’s time to let a customer go?
- Consider the financial relationship – It might sound cold and calculated, but at the end of the day, you’re running a business. And your business can’t survive if you’re losing money on customers. Look at how much money the customer is bringing in, and consider how much that customer really costs your company (time and resources spent managing that client). You might be surprised at what you find. If the client is one who demands a lot of your time, they could actually be costing you money. Do the math. The results speak for themselves.
- Talk to your employees – Your front line employees can give you a good sense as to which customers are good and which are less than ideal. Ask them if dealing with certain bad customers is taking up time they could be using to do something else to help your company. More importantly, are there abusive customers who are killing employee morale? Has an employee ever thought about leaving your company because of unruly customers? You have to value your employees and not just always take the side of the customer. Their happiness drives the success of your business.
- Give it an honest chance to work – You can’t be too eager to axe bothersome customers, because that leads to a slippery slope where you’re too picky and end up with no customers at all. Once you’ve identified the troublesome customers, try to find a way to make the relationship work. If they’re costing you money, see if there’s any way you can make the relationship profitable. Maybe promote additional products or services to them. Or try changing the way you interact with them to make everything run more smoothly. If you’ve truly given it a chance and it’s just not working, then it’s time to let the customer go.
It’s unfortunate, but not all situations with customers have a cure. Sometimes, you have to fire a client.
Have you ever had to make the decision to let a customer go? What led to your decision?
This article is written by Mickie Kennedy, founder of eReleases (http://www.ereleases.com), the online leader in affordable press release distribution. Grab your free 160-page copy of the Big Press Release Book – Press Releases for Every Occasion and Industry here: http://www.ereleases.com/insider/bigbook.html