Is it ok to fire a customer?
Anyone that’s been in business for any length of time has had the unfortunate experience of working with a customer or client that’s a poor fit for their business. Despite your best efforts you just can’t make that customer truly happy. The truth is that sometimes people want to do business with you even though they’re not a good match for your business, and you know in your gut that it’s not going to work.
You may want the income from that customer or you may be worried about confronting them, there are times when the best thing you can do for your business is to let go of customers that you can’t serve well. It benefits your employees, your own mental health, and in the end, it serves the bottom line.
So, how do you know when it’s right to fire a customer? Is there a way to do it without damaging your reputation or creating ill will?
One of the more interesting things about business is that more often than not, your best customers or clients are the easiest to work with and tend to be the most profitable. I’m not sure why that is, but I hear it all of the time from business owners that have figured out that their most profitable customers are usually their favorite customers to serve. These customers aren’t overly price conscious, they don’t need excessive hand holding, they tend to follow the rules, and they’re enjoyable to work with. Some of them even become great friends.
On the other hand, sometimes you get customers that you truly dread hearing from. They beat you up on price, they may be rude to your employees, they are overly demanding, and they are never satisfied. Not coincidentally, they also tend to take up more than their fair share of your time and resources.
When it comes to firing a customer, the first thing to consider is whether you own a part in creating the situation. Do you set expectations in the beginning so the customer knows exactly what to expect? Are you crystal clear on what you can and can’t provide? Spell everything out including such things as how long they can expect to wait to hear from you by email or return phone call, your available hours, and what you will and won’t provide. Don’t fall into a trap of giving too much to satisfy a customer because you weren’t clear in the beginning what the working relationship would be like.
Once you’ve established that you did your best to set expectations, but the relationship still isn’t a good fit, it’s time to decide how to let the customer go without damaging your reputation.
5 Tips for Firing a Customer the Right Way
Tip # 1 – Be Crystal Clear on Your Ideal Customer
Know who your ideal customer is and make sure your marketing attracts the right people. If your marketing is trying to reach everyone, you could be attracting customers that aren’t a good fit. Bring in the right people from the beginning.
Tip # 2 – Take the Emotion Out
Don’t wait until the point you become so frustrated that you react with emotion. Take the time to put your thoughts together and decide what is the best way to communicate with the customer in a professional manner. Write it out or rehearse what you will say in advance. Reacting in the moment when tensions are high rarely leads to a great outcome.
Tip # 3 – Call or Visit
Once you know what you want to say, reach out to the customer by phone or in person. Ending a professional relationship by email doesn’t give the customer a chance to respond. If they didn’t realize there was a problem, it could feel like it came out of nowhere. Severing professional ties is best done when there can be two-way communication.
Tip # 4 – Stand Your Ground
Don’t be surprised if the customer tries to “negotiate” with you. They may realize they need you more than you need them. However, if you’ve already decided that it’s not going to work, it’s best to stick with that decision. Keep the conversation professional and respectfully decline.
Tip # 5 – Finish What You Started
Don’t just abruptly end the working relationship. Have a plan to make the transition as smooth as possible for the customer. Give the customer the time he needs to find an alternative. Provide whatever documentation they might need. Finish what must be finished and wrap things up as neatly as possible.
In the end, letting go of customers that aren’t a good match for your business is not only the right thing for you but also the right thing for the customer who is now free to find another business that is more suitable for their needs. Done the right way, everyone is better off.