When to Fire Your Customers

“I’m not paying for this repair because this modem I bought from you 4 years ago is the problem. This all your fault!”

Ever had that customer who’s like a brick wall? Ever had that one client who seemed to turn your business transactions into a dead end? You feel like the words “I’m always right, and you’re always wrong,” seems to be written on their foreheads. Truth is, every business will have these kind of difficult customers. Some owners may put up with it, some don’t.

And oh, the customer is always right. This propaganda has been around for a long time. To business owners, this is outright absurd. The customer isn’t always right. The customer is often wrong. And at times, it’s good to get rid of customers who are a bad match for your business. It will save you a lot of trouble by doing that, and money too. But before you get into a firing-customers crusade, let’s talk about the different kinds of customers that spell trouble for your business.

Customers Not Good for Business

Forgive and forget. These are your customers that tend to forget to pay the bill. And sometimes they tell you that they’re broke, but can somehow afford a vacation. You forgive the delay but then they tend to forget to pay again. It’s a never ending loop of forgive and forget the payment. Keeping this kind of customer will hurt your cash flow. It’s wise to cut them loose.

Complaint is my middlename. Of course, there will always be customers with legitimate cause for complaints. Genuine complaints help uncover whatever weakness your business have that you may not be aware of. However, the customer that you should look out for is the chronic complainer. These kind of customers will find something to complain about even if you shower them with gold and offer your products or services for free. Keeping this kind of customer will hurt your reputation, as they are likely to badmouth your business to others.

I love your competitor. This one constantly talks about your competition. There’s always better service offered by the other side. They do it better over there. If this happens once, it may be worth working through. But if this has become a standard script for a certain customer, it may not be worth the trouble. Someone who habitually puts your business down in your presence is never good for you or your other customers.

Mr and Mrs Rude. There is nothing more  unnerving than to face verbal abuse. This manner of treatment should not be tolerated in any kind of business. While sales and revenue is important, it doesn’t mean you have to become a doormat for other people. But it takes a lot of patience and self-control not to lose it when dealing with this kind of customers. Don’t be afraid to set the boundaries, and tell up front that rudeness will not be tolerated. If this customer keeps at it, then say your goodbye and show the exit.

Before You Jump Ship

There’s just something to watch out for, before firing your customer. Yes, it’s natural to want to weed your garden – keep the loyal and profitable customers and do away with troublesome ones. But discharging problem customers the wrong way can and usually have consequences. Stories of bad experiences about your business can travel far and fast.

If you had a quarrel with your customer, then clarify your disagreement first. Be professional and stick with facts. Listen to what your customer has to say, and then express also your perception of what you think is fair. Even if you are the expert, let your customer feel that they are allowed to question your judgment since they are the ones paying you. It may surprise you that after clearing the misunderstanding, the customer does not warrant to be fired.

But if there really is a need to fire your customer, be professional about it. If possible, say it in person that you can’t do the job. You may have a hundred reasons, but you only need one. And say it in a polite way. You can say that currently you don’t have the resources, or are fully booked, or the job does not match your business profile. Anything. You should, however, avoid saying something that attacks your customer’s character. That would be stepping out of the line of professionalism.

Now that you have politely declined to do business with your customer, there’s a void that you need to fill. Your customer is left without someone to perform the service that you do. Point them to the right direction. Refer someone else. Your customer will remember this and will least likely spread hateful stories about your business.

When Enough is Enough

For whatever reason, unhappy people will always be part of the population. And unhappy customers will always whine and feel dissatisfied no matter what you do. Some may feel that every business is out to take advantage of them. But it’s most often the low value customers who do this. They complain the most, waste huge amounts of your time and often need to be chased for payment.

So, when do you fire your customer? When they cost you. When doing business with them makes you lose more money than they bring in. Consider the points below.

Financial cost. If you run an objective profit and loss statement on these problem customers, you’d find how very little they bring into your business. Or maybe none at all. This is taking into account all the time you spend to give what they want and chase after them. They will likely result into net loss because of the low value they bring. And coupled with the time and energy needed to deal with them makes it not worth the trouble.

Opportunity cost. Your problem customers also cost you by making you lose out on opportunities. They take your valuable time away from your high value and respectful clients. A high value client not given attention is already a lost revenue. So firing your problem customer will allow you to focus and spend more time with high value clients. This builds loyalty and can increase sales with your valued customers.

Emotional cost. An unreasonable customer can make your life miserable. This can affect your productivity. In fact, it affects everyone who is involved in your business. Even your other customers can feel the stress levels. When you lose happiness in doing business, no amount of money can compensate for it. And you’re likely to make mistakes when distressed. One major benefit of running your business is having fun. You should not allow anyone to take the fun out of being a business owner.

Use your sound judgment when dealing with difficult customers. They can cause you to lose money, lose your high value customers, and lose your happiness. If that happens, then there is no point in keeping them. Even so, it’s still wise to make them feel important. Firing a customer is not pleasant for both sides. But part ways professionally. Be tactful and polite. And refer them to another business that can take care of their needs. By that, you save money for your business. And you save your reputation as well.