Fire Your Client: Ideas Not Crazy

Fire your client. This sounds contradictory, doesn't it? But contrary to our belief, customers are not always right, and not all customers are what you need.

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In fact, you most likely have a client on your memo right now, which is more waste of money than money.

However, many still believe that the main way to get more profit is to get more customers.

This article will reveal why this perception is incorrect, how to know when a customer becomes unsuitable for your current business, and what to do about it.

How to Justify "Firing" a Client

Don't be fooled. We do not recommend that you actively seek out as many clients as possible to operate. Try to build the relationship from the start and it's always in your best interest (as you gain experience, you'll get good at spotting the warning signs to avoid troublesome clients).

But in some cases, it is not possible for both parties to benefit from a business relationship. In these cases, it is best to sever the relationship.

Here are some reasons why you might consider firing a client:

There is no concept of time.

Do your clients frequently reschedule or cancel meetings at the last minute? They're always late to deadlines, so you're not parallel, you're chasing them, and if so, they're taking up valuable time you could otherwise spend with other clients.

Takes too much time.

Does your business unit spend more time quoting and requoting for customers than your production team spends with producers? Some clients with a reputation for being "stingy" aren't worth the trouble.

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Causes excessive or unnecessary rework.

You're not perfect, there are bound to be times when mistakes are made, and occasional rework is normal. But when customers have unrealistically high expectations and keep asking for work to be redone, it can seriously drain resources (employee time, equipment usage, and materials) and hit your bottom line.

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No on-time (or no) refunds.

No one should ever deal with a client who keeps defaulting on payments or forces you to hire a collection agency. If this happens, it's time to sever the relationship and move on.

The cost of bad customers

Even if customers aren't eating into your profits directly (through rework or non-payment), there are indirect considerations that can hurt your company.

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opportunity cost.

Could the time your sales team spend with troublesome customers be better used to find new customers or work with more lucrative ones?

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Staff morale.

Some of your employees may be so frustrated by bad customers that it hurts the work atmosphere. Negative effects can include loss of motivation, poor performance, and even resignation.

Considerations before firing a client

Before letting customers go, you need to make sure you're fully prepared to better their business. It's a good idea to make some predictions.

Review your existing customer base and sales forecast and ask yourself these three questions:

Are you looking forward to any other upcoming business from some existing clients?

Is it possible that some of your small customers could become larger, more profitable customers?

Are you about to acquire any new customers anytime soon?

If you answered "yes" to one or more of the above questions, you're probably well on your way to letting that troublesome client go.

However, if you are hesitant to leave your client, be aware that there are other options available to you.

Alternatives to firing clients

There may be a side reason why you don't want to say goodbye to that troublesome client. Maybe your business can't take the initiative to get rid of revenue streams. Or maybe you think the client has the potential to grow into a big one, and you want to ride out the early growing pains.

In either case, it is recommended that you establish open lines of communication with your customers. Set up a meeting to discuss the issue at hand and determine what must change to make the relationship work again. The bigger the customer, or the more growth potential you see in them, the harder you work to save the relationship.

Another tip is to communicate directly with employees who deal with customers. Are you in the same awkward situation as you? Go to them to understand the status of the customer or contact them higher up.

If you tend to keep customers away, a unique solution is to inform them that you will be raising prices. Pick a percentage that makes dealing with them worth your time and effort. They may agree to new pricing, in which case once-difficult customers suddenly become lucrative. Alternatively, they may choose to find another supplier.

How to Fire a Client

When you're ready to fire a client, it's important to handle it the right way.

Here's some advice on how to fire clients:

Using appropriate channels, provide reasons for termination.

If you and your customers have a certain order transaction, but the profit is very small or even at a loss, and the time cost does not match the profit, you can choose to fire the customer. It is generally recommended to deal with it by phone or in person. There should be an email following, allowing you to document the behavior. No one wants to end a relationship without understanding the reasoning behind the decision. When firing a client, you should tell them why you chose to do so. For example, you can explain that they are no longer meeting your minimum annual turnover quota, or that their offer conversion level is too low. By this method, it is even possible that the customer will turn back and want to continue your cooperation, and there is a negotiation For room, this method is also known as play-by-play. (for some customers)

Recommend to your competitors.

This step may not be suitable for everyone. In fact, it seems odd to voluntarily send free business to your competitors. But this strategy actually works wonders. Not only will you become a professional in the eyes of your customers, but you will also waste your competitors' time with problem customers.

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Know when and how to fire customers

Evaluate your existing customer base to see which issues are more headaches than their worth.

Consider that bad customers can affect all aspects of your business. Discussions don't always get you what you pay for, because troublesome clients can seriously affect your own morale and company culture.

Determine if you can drop bad customers. Although it can be painful.

When firing customers, you can make recommendations to your competitors. While this may sound counterintuitive, it can actually be very strategic.