Firing the Customer

‘The customer is always right’ is a business catchphrase, but if you have a customer who is so wrong they are hurting your company, the best option might be to ‘Trump’ them and say, ‘You’re fired!’

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In a recent PRO discussion forum column, a reader asked for suggestions in dealing with a customer who refused to pay for twice-weekly service, yet complained when the restrooms they were renting were far from clean after a week of heavy use. The route driver not only had to spend extra time cleaning the units, but waste time listening to the complaining each week as well. There were several good suggestions made, which you can read at www.promonthly.com/editorial/2011/07/encouraging_an_extra_service, but the one that caught my eye said this:

“Consider servicing it twice a week without charging extra for a specific time – say two weeks. After that experimental time they pay for the extra service or they find another service provider. Go the extra mile and if that doesn’t work, fire them. Firing customers is legal. You will both be happier.”

 

TOXIC CUSTOMERS

What you have in the story above is a toxic customer poisoning a company. In this case it has been going on for four long years. And while it may be difficult to lose a long-term customer, consider the negative impact keeping this toxic customer has had on the business.

First, having their name on the side of overflowing restrooms is the worst kind of advertising they could get. Everyone who uses them, or chooses not to because of the filthy conditions, associates the experience with the provider.

Also, enduring four years of extra work and complaining has probably been bad for company morale. If a customer’s treatment of a service provider’s employees becomes bad enough, there is a risk of losing good employees because of a bad customer. And even if the good employee isn’t driven to quit over the bad customer, their continued abuse might negatively affect how the employee treats other innocent customers. If the bad customer is the first stop of the day, how cheerful is the employee going to be on the second stop of the day after being berated and having to do extra cleaning?

Maintaining toxic customers can cost a company money even if they are good paying customers. Why? They will consume more time and effort from your workforce than they are paying for. They will not recommend you to others and they could spread negative comments about your company in your service territory.

 

WHO TO FIRE

This isn’t to say you should fire every difficult or disagreeable client. Each situation requires objectivity. There are some common characteristics of customers who are candidates for firing, however. They are unprofitable for you, they waste your time, they make you look bad, and they drive you and your employees crazy.

If a particular customer comes to mind when you read those characteristics, ask yourself if they are demanding more time than is cost effective. Do they pay late? Refuse to do what you recommend even if it compromises health and safety? Are they never satisfied? Do they require too much handholding? Are they verbally abusive? Are they threatening?

Maybe you have a toxic customer who is difficult to work with, but good about paying. Before you decide to end the relationship, consider how expensive or time consuming it will be to make up the lost revenue. You don’t want to let a profitable client go if losing that revenue could break you. If you’re close to the edge financially and really, really need the money this client is bringing in, but also really want to be rid of the headache of dealing with them, devote extra time and effort to finding a replacement customer before you fire them.

 

HOW TO FIRE

The best time to fire a customer is when their contract is up for renewal. But whenever you decide to sever ties, speak to the customer personally rather than ending the relationship via voice mail, email or just pulling your units out under cover of darkness. Clearly, without emotion, explain the issues, even if you’ve done it many times before. Listen to their objections and repeat them back to the customers. Sometimes people don’t realize how silly they sound until they hear their words repeated back to them.

If you believe the relationship is salvageable and the customer is worth keeping, try to rehabilitate them. Offer solutions to the customer. Also consider in-house changes that may make serving the toxic customer more tolerable, such as having only your most even-tempered employee deal with them or having employees rotate so no single person has to take the brunt of the toxic customer.

Remain calm and act in a professional manner. Don’t get pulled into a verbal battle. Calmly explain that your company is no longer able to meet their needs. Make sure you have met your contractual obligations to them, and be prepared to refund any money they paid up front for service you have not yet provided.

And as you are firing them, soften the blow by recommending a competitor who might be better equipped to handle their needs. You don’t want to burn bridges entirely. Who knows? A management change or upturn in their economic situation might someday bring them back to you as a non-toxic customer.

 

DON’T MAKE IT A HABIT

If you have more than one toxic customer, don’t cut them all off at once. Pick the worst of the worst and see how it goes. You might learn something from the process that will help you resolve issues with your other customers without resorting to firing.

If all your customers are toxic, start looking inward and ask yourself what you and your employees are doing to routinely attract this type of clientele. Maybe it’s your pricing. Maybe it’s your customer service.

The easiest way to avoid getting yourself into the position of wanting to fire customers is to avoid toxic customers in the first place. While they are not always easy to see coming, there can be predictors that someone is likely to be trouble. For example, if a potential customer walks through the door bad-mouthing a competitor you know to be reputable, you might have someone on your hands who is impossible to please. Or if they demand a ridiculous amount of service for a ridiculously low price, don’t assume once you get them on board you can fix the situation.



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