We all love all of our customers, all of the time. It's true, we all agree. No need to deny it. Except that, our love for our customers, while undeniable, should not be unconditional.
Here's the thing: You need to fire your customers.
WAIT! Not all of them!
But there are times when it is in the best interest of everyone to just let that customer go. Here are the two major reasons:
Reason #1: They are no longer (or never were) profitable.
Why do you – as a business – have customers in the first place? They make you money. You provide services for a premium, which they pay, creating a margin of profit. If that customer is no longer profitable, it’s time to say goodbye. Maybe they take too much of your time, maybe they always require unrealistic specs, maybe they have their own trencher and like to rip things up just for fun. Regardless, if you can’t make your dime off of services rendered, then go render someplace else.
Reason #2: They are killing morale
Do not underestimate the importance of your organization’s morale. High morale means high productivity, and high productivity should translate into higher margins. If that problem customer is sapping the life out of every person they talk to (your office manager, service technician, field manager, and ultimately you, the owner), then consider just how profitable they really are. You might find it’s simply not worth it.
But…
Before you pull the trigger, do an honest assessment:
- Is it possible to salvage the relationship? It’s always more expensive to acquire new customers than to maintain “old” ones.
- Can you talk them down from unreasonable demands?
- Can you raise the price to reflect added difficulties? But be fair! Gouging them until they leave just ain’t right!
- Can you explain the situation and educate the customer? Perhaps they’re simply ignorant to the realities of a project.
Regardless, when the time comes, play it straight. “Mr. Jones/Mrs. Jones, I’m sorry, I just don’t think that my company is the best choice in your case.” If you know of another company that might be a better fit, recommend them (but don’t be vindictive).
Be respectful. Be honest. Weigh the pros and cons of this decision carefully. And then make the best decision for your business.