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Firing Customers

As a business coach I find myself helping my clients deal with difficult customers on a regular basis. Sometimes the only logical solution is to fire the customer; however, in a slow economy where every dollar of revenue seems so precious, this is a very difficult decision.

Below is the informal process that I take my clients through when making a decision whether or not to fire a customer:

  1. Apply a modified 80/20 Rule - If a particular customer or customer segment is causing 80% of your headaches, put them on probation.
  2. Take customers on probation through a screening and evaluation process to determine if you and/or your team can live with them.
  3. If only minor changes are required in order to continue doing business with them, simply inform your customer of your newly enforced rules of engagement and monitor their behavior – just like any good probation officer would do.  If, after a predetermined period of time, the behavior has not changed, you fire the customer.  
  4. If major changes are required, you fire the customer.

The decision to fire difficult customers really is not that hard once you reflect on how much these customers are costing you and your staff both financially and mentally. Keep in mind that, if handled correctly, firing a customer can be a win-win situation. You win by alleviating a stressful situation and one of your competitors, who may be a better fit for this particular customer, wins by gaining a new customer.

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