Does It Ever Make Sense to Fire a Customer?Rick Struzynski
Does it ever make sense to fire a customer?
The simple answer is yes, but as usual there’s more to the story. If you find that the profitability (or lack thereof) of a particular customer is negatively impacting your business without providing any strategic gains – then yes, you are better off ending the relationship. Also, if you find that a customer is in any way abusive to your team, or operating in a manner that is inconsistent with your values – you are not only justified in terminating the relationship, but I’d suggest in order to properly support your team, it’s mandatory.
However, if you ever find yourself in a situation that requires customer termination, instead of just saying “oh, that was just one blank, blank customer,” I would strongly urge you to revisit your vetting process. While there are certainly some exceptions, I don’t think there are very many ‘bad’ customers out there – mostly just bad fits. Typically bad fits should be identified during the customer vetting process.
Here’s a personal and recent example. Through one of my email campaigns, I received a response requesting a further discussion (great, right?). We had a call arranged for a specific time, and I called the potential client exactly on time (I try to be as courteous as possible with people’s time). The phone rang but went to voicemail before it could be answered, after 7 or so rings. Within 2 or 3 minutes, I sent an email to the individual and he responded shortly after.
I figured since we were still well within the meeting’s scheduled duration, that I would call again immediately. I called his direct line with the same result, then called the main line and dialed his extension- which immediately went to voicemail. So, I finally tried his cell. He answered and was very short and curt with me- in addition to stating the wrong time for our meeting.
As part of my research prior to our call, I found negative Google reviews as well as a BBB rating of C+ – so I was already hesitant to take the company on as a client. Given that and the phone call, there was simply no way I would do business with this company – no matter how much I needed more clients (in all honesty, I’d rather go out of business than deal with a business that isn’t a good fit).
While this is a fairly extreme example, you should absolutely be on the lookout for warning signs throughout the entire engagement process, and the moment your gut starts talking – listen and move on. I mean, isn’t one of the reasons you left the corporate world because you were tired of dealing with customers that never should have been in the first place? Remember, not all money is good money!
Until next time……
Rick is the founder and CEO of Choose Growth – a sales management consulting firm dedicated to helping SMB’s achieve or exceed their growth expectations by increasing revenue, margins and reducing cost of sales – simultaneously. This contradicts most business books out there, but we have the data to support the success of our methods.
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