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5 reasons to fire a client – plus 5 steps to take before you do

Most situations are solvable, but it’s important to know when to go your own way.

April 16, 2021

5 minutes of reading

Comments expressed by Businessmen the contributors are their own.

Should we ever fire a customer? The answer is yes. Sometimes (in rare cases) ends the hard way The relationship is the right thing to do.

This concept is a challenge for young companies, especially since most founders have to campaign heaven and earth to book and keep a business. However, when one customer relationship So damaging, maybe it’s time to break up.

When a startup creates it and corporate culture, which predicts potential product development delays or financial constraints. But it should also consider the possibility of problematic customer scenarios. When challenges arise – and they do – there needs to be a process in place to assess the situation and deal with it appropriately.

Related: The customer is not always right and you need to challenge them

Agreement breaking situation

In matters of character, treatment of others or criminal acts, the question is not whether The company should terminate the customer relationship. That is who will deliver the message, how and when. These cases require action.

  • The client’s company or their employees are engaging in illegal activities, in violation of their intentions , or behave unethical. Not doing business with a company you know is against the law. Find legal advice. You may or may not be responsible for sharing or even commenting on a client’s actions that bend or violate the rules – that’s why you seek attorney’s advice. Misconduct is a great reason to go the other way.
  • Customers treat your employees or theirs disrespectfully. Successful companies create a culture and respect. Your mandate for employees extends to interactions with customers. Some behavior – harassment or – always wrong. Other behaviors can be explained. Protect your team in environments, customers, or other places where the right people are annoyed.

Related: Why Golden Rule must be Practiced in Business

Suspicious situations

  • The customer asks for the goods . Successful startups are based on value-added, not on razor-thin profits. Venture capitalists generally do not invest in commodity businesses. They know that selling more units at a lower price doesn’t fix the profit. You have the option of continuing to work with such clients but proceed with caution.
  • The customer does not pay the bills. Receivables always indicate when something goes wrong. Maybe customers are in financial trouble, often late paying, or dissatisfied with your product, service or staff. Go into the problem with the customer. Can you reach a fair deal for both of you? Challenging enough for a new business without needing to fund someone else’s company through your receivables.
  • Customers are never satisfied. Many perfectionists live in this world. Some of them will be yours customer. Learn to recognize the difference between a client that refuses to admit a job well done and a client who values ​​performance and continues to raise standards. The first is demoralizing to your team. The second can be a great partner – the rising tide will lift all boats.

Related: Is poor customer experience relevant or policy-related?

Before firing, do this

Customers can be challenged. If a client situation has a legal problem, talk to your solicitor immediately. If not, before you decide to fire a client, step back and take these five steps.

  1. Convene a multifunctional roundtable. This includes everyone at the company who deals directly with the customers in question. The goal is to make a decision to repair or fire.
  2. Allow all team members to vent their anger. Don’t be surprised if have a different view from product development or if disagree with finance. After the complaints have been raised, challenge each person to say something good about the customer. If everyone was silent, you have learned a lot.
  3. Ask associates to identify how they may have contributed to worse customer relationships. Sometimes, the act of discussing a client who is having a challenge uncovers ideas that could improve the relationship.
  4. Is this customer relationship worth holding back? If the answer is yes, or depends, what are the next steps? Change of personnel? Modify terms and services? Reset expectations? Once you have a plan, meet with the client. Listen to their point of view, and then adjust your plan.
  5. What happens to terminate a relationship? Young companies often do not have cash reserves or deep resources. Before you can afford to end a relationship with a “problematic customer”, think carefully about how you will make up for that lost revenue. How long does it take to sign up for an alternate customer – no sales on your business plan? You can reduce costs, change plan or wait one ? From this point of view, your team may find that some uncomfortable conversations with customers about pricing or timely payments might be worth a try.

“If the world was perfect, it wouldn’t be.”

The great Yogi Berra was right. There is no such thing as a perfect customer relationship.

The goal is to set common expectations with all customers and deliver on commitments with integrity and respect. It is the basis for strong business relationships for many years. It is also the foundation for determining that the time has come to end the relationship with the customer.



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