Give Bad Customers the Pink Slip!

Most of us will agree that not all business is good business.  We all aspire to have customers we love and who love us.  They pay their bills on time.  They have appropriate expectations of our products and services.  They consider us a partner and take our advice.  They place large orders frequently.

If you were to make a list of your customers right now and sort them into categories: Great, Good, Not So Good, and Troublesome, what would your list look like?  Which column would have the longest list?

Knowing that all business is not good business, why do we persist?

We all have troublesome customers who take up much more of our time and energy than our other customers.  However, we continue to spend an inordinate amount of time on their demands and continue to get aggravated at them (and try not to show it) when what we should do is fire them.  In fact, we should give all of their contact information to our competitor — just kidding!

We have many excuses for not firing our customers.  I mean, after all, they are paying their bill . . . or are they?  They only call 5 times a day now when they used to call 10 times.  They just placed another order; however the discount they demanded will prevent us from making our margin.

Win-win behavior is the crux of all good business, and anything else is very wearing.  Most of your customers want to have win-win relationships with their vendors.  Some may not know they are troublesome.  Clearly explaining your concerns will very likely facilitate adjustments.  Most of your customers do not want to see you go out of business, and if you explain that, like them, you need to make a certain margin on your sales, they may be more understanding of the price you are charging.  Certainly the managers may not know that 5 calls a day from their staff to your office is too many.  Maybe they could suggest to their staff that they list their questions and call once a day.  There may be some problem you are unaware of which could be easily fixed.  Communicating with them may help solve their problem, inadvertently solving yours.

Sounds great, but how do you do it?

1. Make a list of the customers you would like to fire.
2. Next to each customer write down what they would have to do to move from your “want to fire list” to your “great customer” list.
3. Figure out a way to communicate this information to the appropriate people at that company.
4. Check with your manager to be sure your plan meets approval.
5. Schedule a meeting with the appropriate people clearly stating that the purpose of the meeting is to improve your relationship and the service you provide.
6. Communicate your concerns one at a time and ask your customer to help you come up with solutions.  If you come up with solutions that are mutually agreed upon, get it in writing and be sure it is communicated to the proper channels. Now move this customer to your ‘Good’ or ‘Great’ customer list. If not, go to Step 7.
7. If the customer doesn’t see your concerns as a problem and is not willing to make any changes, end the conversation by saying something like, “We appreciate your past business and are very sorry we will not be able to work together in the future. This is the last order we will complete and we wish you much success.”

Now you know how to do it, what are you afraid of?  Why aren’t you going to run right out and fire some customers?  Afraid your staff will think you are crazy? Afraid your sales numbers will drop?

Obviously I can’t recommend firing customers until you have weighed the risks.  But do consider this:  Losing a customer  is better than losing your mind.  Only you know whether it would be worth it or not.

If you are afraid your sales numbers will drop, remember you could have the time you take away from a ‘Troublesome’ customer to grow a ‘Good’ or ‘Great’ customer or find a new customer.  Also, remember that your ‘Troublesome’ customer may turn into a ‘Great’ one with win-win communication.  Just be sure you have a good plan to approach each customer on the ‘Troublesome’ list.  You may be pleasantly surprised, those customers may move over into the ‘Good’ or ‘Great’ column when you communicate your concerns clearly.  And if they don’t, fire them!

If you are facing any obstacles in your business with regards to sales, I welcome your questions. Please contact me at alice@aliceh2.sg-host.com or call 775-852-5020.