How to Fire a Customer (if you must!)

by Laura Benjamin, Colorado Communication Coach and Career Coach

A successful entrepreneur once shared three pieces of advice when I first started my business: “Keep your overhead low, never take money from someone you don't respect, and if they're a pain as a prospect they'll be unbearable as a customer”.

What he didn't say that I have since learned, was if the painful prospect becomes an unbearable customer, you have every right to fire them!

“What?!?” you shriek in shock and dismay. “That wouldn't be very customer centric, customer focused OR customer friendly!”

Actually, you are customer-focused when you fire the customers who make life miserable for you and your staff. It will free you up to better serve the good customers who deserve more of your time and attention. While we generally love our customers and enjoy doing business with them, once in a while you run across one who deserves to go.

Who fires customers? Everyone! Your dentist, graphic designer, lawyer, auto mechanic, pet sitter, hairdresser, doctor and even your church! They recognize the need to surgically extract one percent of the customers who cause 99% of the pain. Coco Chanel's observation, “…it's in the act of deciding what to remove that you place value on what's left behind”, sums it up nicely.

The Costs to Keep a “Crummy” Customer

Since the goal of being in business is to turn a profit, here are ways undesirable customers steal those profits:

• You waste a ton of time trying to please unreasonable people. The more time you waste, the more ineffective you feel and the less productive you become.
• You could be working on something more rewarding during the time you spend on them, which translates into lost “opportunity costs”
• You have to work extra hard to bring in more business or better paying business to make up for those losses
• When you force employees to deal with crummy customers it signals that you don't value their time, job satisfaction or morale. Once employees get that message, it's hard to re-engage and retain them.
• Since crummy customers could end up bad-mouthing you, you may risk your reputation by continuing to associate with them
• The emotional drain may kill your sense of pride and accomplishment. If you are not enthused about your business, who else will be?
• High stress levels and cortisol are toxic to your body and can result in TMJ, shingles, sleepless nights and even heart attacks!
• When you're stressed, you are more prone to errors and omissions on good customer accounts that you want to keep
• Your self-image and self-confidence may suffer as you begin to wonder if you really DO know what you're doing

Who Should Get the “Pink Slip”?

Assuming you don't already have a list of prime contenders, how do you know who should go ? Pink slip contenders may include those who:

…are chronic complainers. One business has a “three whiner rule” – three strikes and they're out!

…ask for too many exceptions. Rather than an occasional request, they act as though you owe it to them on a regular basis and get huffy if you try to hold the line.

…nickel and dime you to death. Negotiation is one thing, but these folks regularly eat away at your income until you're left with more loss than profit.

…believe their crisis should be your emergency. These are the drama queens who assume you will drop other customer projects in order to serve them first.

…have a bad attitude. A local deli has a sign posted that says, “Take Your Bad Attitude Somewhere Else”. Eliminate negative, nasty, abusive people from your clientele and business will be a whole lot more profitable and pleasant.

…refuse to follow your advice. Not only don't they do what they ask you to help them with, but then they blame you when the outcome is exactly what you predicted!

…give you the song and dance. They keep you wondering whether they will or won't work with you. They ask for more information, question pricing and critique credentials until you realize the emotional and intellectual capital you have wasted.

…are routinely inconsiderate. They “forget” to pay you or refuse to pay you at all. They disrespect your time and think you are available all hours of the day and every day of the week.

…they don't appreciate you. While creating customer loyalty is the lifeblood of any business, relationships are a two way street. Each side has roles and responsibilities and each deserve to feel as though the exchange of value is worth the investment.

How to “Do the Deed” and Reduce Resentment

• Explain that rising material and labor costs no longer make it possible to justify the loss you take on their projects.

• You are committed to quality outcomes but have concerns about systemic issues within their organization which make it impossible to guarantee quality outcomes.

• You are no longer headed in the same strategic direction. Your business plan (board or advisory team) now requires a different focus

• Scale back slowly. You are happy to report that business is booming but you don't want them to bear the brunt of your crunched schedule. Beginning on X date you will set new schedules and give them plenty of time to decide if their best interests are still being served.

• Raise your prices. The P&L reveals you must raise your prices to remain competitive. You want them to have advance warning to decide if they also can justify the increased costs of future assignments.

• Delete them from your database. Take them off your mailing list, stop the follow up calls and add them to your “Do Not Service” list. Take your time returning their phone calls or don't call them back at all. These measures are reserved for extreme circumstances only

Regardless of which approach you take, please keep the following in mind:

• Express concern for the customer's overall well being and success
• Remember, only you are responsible for your business success and it often requires hard choices
• Cultivate an attitude of abundance and refer jilted customers to professionals who are hungry for business (always warn them about the issues they will face)
• It is possible to achieve business success without engaging in personal conflict
• Always be calm, polite, firm and pleasant – but stay true to your course of action

In summary, problem people usually only get worse. Pay attention to your instincts from the beginning of each relationship, set your standards and decide how often to make exceptions. It's not a question of if but when you'll be faced with the need to fire your customer!

The information on this web site is copyright © 2001-2008 by Laura Benjamin and Pinehurst Press Ltd. Creative Commons. Some rights reserved. Permission to reprint with attribution please and a live link to http://www.LauraBenjamin.com. Please contact me to complete any "Permission to Use Copyrighted Material" documentation. Thank you in advance!

Laura Benjamin is a Colorado Communication, Career and Marketing Coach, professional speaker, strategic planning facilitator and writer. She is also the Author of The C.A.R.L.A. Concept™: How to Raise an Issue, Prove Your Point and Communicate with Confidence & Clarity. To interview Laura or access her free educational and entertaining audio podcasts, blog posts and articles, please visit www.LauraBenjamin.com.