Every business person knows that there are some customers that are more trouble than their worth. But how do you make the decision to stop pursuing this business? Most important, how do you break this news to a “dead-end” customer or lead so they won’t badmouth you all around town?
The idea of letting go of low value or dead-end customers was emphasized in American business in the past 2 decades. It became “ok” to fire your customers – that is customers who are not profitable or who are frustrating to deal with. But, while it’s fine and expected to identify your loyal and profitable customers – and invest in them – you need to exercise caution when deciding to purge your business of those who have no actual or strategic value. Discharging customers the wrong way can and usually does lead to very bad things for your business. Customers talk, and word of mouth about bad experiences travels fast and far.
If customers don’t understand the value that you are adding, or have unreasonable demands, allowing them to continue being a customer can do long-term damage to the viability of your company. First, there is the opportunity cost of what you could be working on if you were dealing with this individual. Second, these customers are inevitably high-maintenance and therefore low or no profit. Finally, these are the kind of customers that are never going to be happy, and always blaming you for problems that are beyond your control.
3 Strategies for Firing Customers the Right Way
Customers are only human; they may merely want someone to hear them out and listen to them. Increasingly, you can only successfully fire a customer today if the reasons for doing so seem reasonable to reasonable people. By definition, letting customers go will probably be an unpleasant experience for them. Here are some suggestions for damage control.
1. Clarify Disagreements First. If you’ve had a quarrel with a customer, communicate with that person your perception of what you think is fair and allow her to do the same. Validate her concerns and allow her to question your judgment because she is paying you, even if she isn’t the expert you are. You may find out through discussion that a misunderstanding doesn’t warrant dumping the customer.
2. Be Professional. Meet the person face to face and politely explain why you think you may not be the source for them. There may be a ton of reasons; you only need one. She doesn’t match your customer profile, or you don’t feel you can stun him with the job. Keep your value judgments to yourself and avoid a hostile tone.
3. Offer Alternatives. Remember, if you fire your customer, that person is left without someone to perform the service that you once did. Refer someone else to them that you feel is a more appropriate match for their needs, such as another contractor who specializes in smaller work. You may just help the customer find a perfect match for his needs, and he’ll remember it. At a minimum, he hopefully will not spread negative comments about your business.
The customer isn’t always right, but it’s our job to make them feel like they are always important. The process of firing incompatible customers is not pleasant for anyone but if it has to happen, use tact, courtesy, and professionalism and offer alternatives to keep your business name with good street credibility.
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