Firing a Customer – Why it Might be Necessary, and How to Do it

Customers are a valuable asset for any business – often the most valuable.. and the common adage “the customer is always right” is often thrown around. But the truth is that the customer ISN’T always right, and as hard as business owners work to find new customers, sometimes you just have to admit that the customer relationship isn’t working out.

5 reasons you might need to consider firing a customer 

1. They are a waste of resources – If you’re like most businesses 80% of your profit will come from just a handful of your customers. These people are vital for your brand and should be treated as such. If you find that most of your time and energy is going toward less profitable customers, it may be time to reassess.
   
   
2. It’s just a bad fit – Working with someone who isn’t a good fit for your company can be time-consuming and costly. We work hard on lead-generation, but it’s also important to make sure that the solutions your business provides are solutions to the problems a customer actually has. If a customer is always asking for changes or doesn’t seem happy with your results, that’s a sign they aren’t a good fit.
   
   
3. They ignore your advice – Customers aren’t always right, and it’s important to remember that when it comes to your products and services YOU are the expert. If the customer is consistently ignoring your advice it’s a good time to reconsider the relationship.
   
   
4. They disrespect your policies and/or employees – Chances are you’ll eventually encounter a dissatisfied client, but if they disrespect your staff, or take advantage of your business policies that’s not okay. Don’t be afraid to cut ties with people like that.
   
   
5. Effective communication is impossible – Just like in any other relationship, good communication is vital. If you find that you just can’t find a way to effectively and efficiently communicate with a customer that’s a sign that you’re going to run into problems in the long run.

How to fire a customer

1. Have a plan – Never fire a customer in the heat of the moment! Make sure you’re taking the time to evaluate the situation carefully. If you decide to go ahead, think carefully about when you will fire them. You might decide to wait until the project is over, or until the end of the financial year. Decide where you’ll do it, and think carefully beforehand about what you’ll say.
   
   
2. Try to get them to “opt-out” – A good and confrontation-free way to fire a customer is to get them to voluntarily “opt-out”. Raising your prices can be a good way to do that and will save you from having to have a difficult conversation.
   
   
3. Opt for the phase out – If the opt-out doesn’t work, you can explain that you’re taking your brand in a different direction and you don’t think you’ll be a good fit for them anymore. Explain that you’re transitioning away from certain services or projects and give them a time-frame for the changes.
   
   
4. Call it like it is – if your customer isn’t responding to either the opt-out or the phase-out strategy, you might need to lay it all out on the table. Be direct, but polite. Be assertive and be prepared to send them off with the details for another company who offers a similar service, that way they won’t feel completely abandoned.
   
   
5. Be clear about how you’ll wrap things up – Communicate with the customer about what happens from here on out. If there’s still work to be done outline exactly what still needs doing, with clear timeframes for delivery. Include details about invoicing and payment terms and set clear expectations about any final payments they’ll be required to make. Ensure everyone is on the same page as you navigate the final stages of the relationship.
   

Good luck with your break-up!