You’re in business to provide your customers with the best products and services that you can whilst making a living and striving to live the lifestyle we all dream about. In our quest to grow our businesses we strive to keep our customers longer as logic dictates that if you keep customers buying from you longer your turnover will be greater. However, something important often gets lost in the translation.
When you have customers who expect the world, are always complaining about costs and often want your blood in exchange for a continued business relationship, it might be time to ask these customers to seek the services of someone else… in other words its time to fire them.
Some types of people to fire and the reasons to fire them are below.
They Cost Money
We all have clients that are needy, that demand more of our time and resources each and every week and that simply don’t respect you. These clients are costing you money, the reason being that if you provide a lot of your resources putting out fires and trying to please such customers, you are actually using up time and money that could be put to better use with those customers who love and respect you.
Eighty percent of your profits will come from twenty percent of your customers, whilst eighty percent of your headaches will come from the twenty percent of bad customers we all seem to have and you’ll use eighty percent of your resources pleasing these twenty percent instead of helping those customers that generate most of your profit. I’ve use poetic license with the eighty twenty rule here, just to demonstrate things and to hopefully make you think.
They’re Not Your Ideal Customer
As your business grows it stands to sense that you will seek out the right customers for you, you may find that some of your older customers just aren’t a right fit anymore. They haven’t done anything wrong but they also aren’t really adding to your business in a positive way. Letting them go makes room for more of the right customers.
Sunk Costs versus Opportunity Cost
If you are like me you have no doubt invested a lot of time, energy and even resources and money in customers and it can be hard to let them go in such circumstances as you are hoping that one day all of that effort and resources will pay off. But that’s actually a stupid way to run your business, when you make any business decision, the thing you are supposed to consider is opportunity costs – not sunk costs. Sunk costs are those that you’ve already spent; opportunity costs are those that will happen in the future. If there are better opportunities out there, fire the customer and go after the right ones.
Too Much Emotional Investment Required
You no doubt have some customers who want you to be emotionally invested in them, in a way that is draining and certainly not good. They require too much of your time and effort considering the payoff due to their neediness. They expect you to be available at all hours of the day and night, at weekends in fact whenever they want you as you are in effect at their beck and call.
They Want You to Share Their Risk
Some customers are for want of a better word, selfish. They want you to share their risk but get none of the rewards. This type of client is dangerous to your entire business, because they’ll blame you when things go wrong even if it’s due to them not following your advice.
They Control with Fear
Some customers will threaten you to try to control you. They’ll say things like, “if you can’t handle it, I’ll find someone who can” and other types of threats, both direct and veiled. They truly have no intention of firing you but they like keeping you off balance. Fire these types of customers, as things will only ever get worse.
They Don’t Pay on Time
You no doubt have a few customers that you actually like but they tend to take advantage and not pay on time, and even use delaying tactics. These customers tend to eventually pay, but having customers not pay on time can be extremely stressful and it can affect your own cash flow. The best thing is to let these types of customers go after giving them sufficient warnings, basically tell them how things are and ask them to shape up or ship out.
They Don’t Share Success
Some customers will freely share blame when things go wrong but when they experience success, even if directly related to what it is that you do, they will not share that. When you experience that type of customer, it’s best to let them go as soon as possible because you’re not going to get anything more out of the relationship than what you’ve already got.
You should remember that firing your worst customers will leave room for more of the right customers. Anytime any one customer, even if it’s not totally their fault, makes you feel like you’re losing your mind or investing too much time and emotion for the payoff, it’s time to consider letting them go. You don’t have to say “you’re fired” but you can calmly and politely end the contract per your agreement terms.