“The Customer is King”, “The Customer Is Always Right” and other clichés make us believe that businesses have to make customers happy at any cost. And we love this logic being customers ourselves. But with a start of an own business, we discover that this logic can’t be followed blindly. In reality, the customer is not always right. There are customers who can ruin your business and not firing them in time may cost you a company. So what are the main reasons to fire a customer?
1) Unreasonable Demands
This one is true, specifically, when it comes to B2B companies and service providers (for example, web development companies). Sometimes clients come up with a “add this small functionality” or “we need this ASAP” sort of inquiries. This is ok as long as such “additional” work is paid accordingly.
Unfortunately, some customers believe that such inquiries are either free or “included into the initial scope by default”. To avoid such a situation, make sure the scope of work in your contract is very detailed and your client understands that any additional work will result in additional payments.
2) Customer treats your employees like slaves
Some customers may be polite with you as a business owner but treat your employees like dirt. Your employees will not only have troubles delivering high-quality results for the customer, but also lose the overall productivity and loyalty. In such a case, ask the employees to tell their version of the situation.
If the situation is caused by a personal conflict, talk to the customer about reassigning the employee responsible for their account. If the story repeats, maybe it’s time to farewell the customer because in future this may cost you way more.
3) The customer doesn’t pay you (enough)
There are several facets of this issue.
a) Some clients are just slow on payments. Most likely they don’t try to cheat you. In some cases it’s caused by the bureaucracy of big companies (especially government ones). In other cases, responsible people are just too busy or disorganized. If you don’t want this issue to negatively influence your cash flows, try to reserve funds for your business for two-three months.
b) As your company grows, the clients you’ve started with may not fit in your business model anymore. If your first clientele used to be small businesses and now you focus on enterprise-level companies, providing services to small business may be cost-inefficient.
c) If you are constantly improving your product or service, the price tends to rise. Some clients will refuse to pay a new price and it’s when you’ll need to decide to either fire a customer or keep losing money on them (which is very likely).
4) Customer doesn’t listen or doesn’t respond to you (or both)
There are some clients that “know best” and constantly ignore your advice and expertise. As a result, this may lead (and usually does) to unexpected fixes later. It’s not critical if the customer agrees to pay for an extra work, otherwise this leads to the #1 on our list.
Dealing with such a customer may be a headache. Try to explain that they’ve hired you because of the expertise you have, and at least should consider your advice and recommendations. If this doesn’t work, finish the project according to the customer’s requirements and think twice if you want to deal with them again.
Another type of a customer hires you, puts in a state of an emergency (“We need this ASAP”) and then disappears. As a result, you can’t receive feedback (or just the info you need) so deadlines move and when the customer is back, you receive a ton of complaints.
Usually, customers don’t do this intentionally. They are just too busy. In such a case, ask a customer to allocate a manager/person you can easily reach whenever you need feedback or information.
5) They are never happy
Some clients are just Grumpy cats. No matter how hard you try, they will always find something they don’t like. If you are a service provider, you should ask for a detailed requirements and as long as you follow them, complains are not accepted. If the customer tries to push the line of a “You should have guessed what I wanted and anticipate everything”, fire a customer with no hesitation.
6) The customer wants you to do something unethical or illegal
This one is a strong reason for firing a customer; no matter how profitable he is or how many years you work together. If you agree to break ethical or legal rules for a client, you may lose your reputation, become a target for future manipulations or even become a companion in crime. If you refuse or talk round the client, evaluate how this will influence your future relationship and whether you can trust such a client.
Firing a customer is always difficult and painful. Sometimes it ruins companies and even people’s lives. But spending time and resources on wrong customers is even more demolishing. Take such decisions with due responsibility and don’t be afraid to do what you feel is best for your company and employees.