Do Not Hesitate To Fire Unsatisfactory Clients

 Do Not Hesitate To Fire Unsatisfactory Clients

I agree with what you said in a recent column—that the consumer is ultimately correct. Having said that, you did mention in that same editorial that firing troublesome clients is occasionally essential. When does a customer become so troublesome that you should cut ties with them, given that they are always right?
I am Gary M.

Gary, your email is one of many that followed that piece in asking me to define "the customer is always right" and "sometimes you have to give a customer the boot." In essence, a client has what I refer to as "the right of expectation" if a business owner or service provider is prepared to accept payment from a consumer in return for the provision of products or services. What this means is that the consumer has a legitimate expectation that you will fulfill all of your obligations under the contract. As a restaurant owner, for instance, you have a responsibility to ensure that your customers are satisfied with the food they order. A consumer has the right to anticipate that a dry cleaner will wash their garments and not return them in a state of complete disarray. The client has the right to anticipate that the service they have hired you to deliver will be carried out in a way that meets their satisfaction and according to the specifications of the job.

It is your duty as a business owner to deliver excellent service and live up to your customers' expectations. When doing business, it is common practice to have a mutual knowledge of the customer's expectations and your own capabilities, even in the absence of a written contract outlining specific details. By failing to deliver as promised, such as by giving an undercooked meal or misplacing a customer's laundry and refusing to compensate, you are committing the crime of poor customer service.

Regrettably, not many entrepreneurs prioritize providing excellent customer service. They care just about making money, regardless of the consequences for the customer. Such company owners were the focus of the article you cited; the main argument was that failing to consistently satisfy customers would lead to a company's demise.

Let us now examine the opposite side. If a consumer does business with you, he or she has a right to expect value for the money spent, and you have the same right to anticipate that they will not ask for items that are unreasonable or not covered by the contract. You shouldn't mislead customers into thinking their hamburger will taste like steak unless you specifically say so. It is unreasonable to anticipate a silk shirt from a customer who brings you a cotton shirt to wash. You will encounter issues when the customer's expectations differ from what is actually expected.

Every business owner has dealt with clients that were unreasonable, demanding, condescending, difficult to please, and occasionally downright dishonest. These consumers deserved considerably less than what they got. You have to figure out if the consumer is doing more damage than good when their acceptable expectations turn into outrageous demands.

Where the "customer is always right" and "sometimes you have to give the customer the boot" diverge is this: when a customer stops being a benefit to your company and starts hurting it, it's time to consider firing them.

Though it may be difficult to imagine your company without that problematic customer, this becomes much more important when that customer accounts for a significant portion of your revenue. A business that relies on a single client is like a house of cards; wouldn't it be wiser to put that time into making sales calls that could bring in other clients and develop your business? If this consumer were no longer an issue, would your employees be happier? If you knew you wouldn't wake up to a dozen of his voicemails, would you be able to sleep easier at night?

The easiest approach to determine a customer's value is to compare the revenue they generate with the time and money needed to achieve their expectations. The consumer is essentially costing you money if, despite paying $1,000 per month, you end up spending $2,000 on their satisfaction. You will quickly go bankrupt if you even have a small number of clients like these.

An example of this would be a client whose annual revenue contributed several thousand dollars to the bottom line of my software company. But this customer was a pain right from the start of the contract signing process. He and his associates invaded my tech support team's time with ten daily calls about IT issues that had nothing to do with the service we were engaged to do. It came to the point that my staff drew inward whenever the phone rang for fear that this client would be calling again.

It was an easy decision for me to terminate this client's contract when the renewal time rolled around. I just performed the arithmetic. Even though this client contributed thousands of dollars to our company's bottom line, he cost me at least as much in support and handholding, and he caused my employees mental misery on top of that. With a gracious invitation, I declined to renew the contract and suggested that the customer look elsewhere for his needs.

In an ideal customer relationship, both parties come out ahead: the customer gets what they need from your product or service, and your business makes money by providing it. The foundation of the connection should be sincere desire and mutual regard. When the relationship turns into a zero-sum game, you have to be prepared to act. Relationships and business suffer when customers believe they can manipulate you into giving them more than they paid for.

You don't require me to use a foolish stick to strike you on this occasion. You have a good idea of the types of consumers who cause you trouble and how you will handle dealing with them. Each customer's worth, not just in the here and now, but over time, must be taken into account.

Is the customer asking for more than what's reasonable? Maybe it's time to fire that customer if they're always demanding too much and becoming upset when you say no.

Is the client trying to take advantage of your kindness? Some clients can see your want to please as a sign of weakness and take advantage of your relationship to their advantage. You might think about firing the customer if they have a history of trying to take advantage of you and always finds a way to obtain what they want.

Does this client pose a risk to your credibility? There is nothing worse for your reputation than an angry, outspoken consumer who isn't happy with your service. Furthermore, an irate consumer will eventually speak poorly about you, regardless of who is at blame in the dispute. You should think about firing a customer if you have any reason to believe they would one day disclose their dirty laundry in public.

Is the client prompt with payments? It could be a sign of future issues if a client is chronically 90 to 120 days late with payments, even when your contract expressly states otherwise. Consider firing the customer if you see them as a payment risk.

How can I keep a consumer from getting booted? Having a contract that lays out the details of the relationship is the best solution. The services, their associated costs, and the conditions and timeframe for their delivery are all precisely laid out in the contracts I use for my many enterprises. We document the changes and their impact on the contract in an addendum in the event that there is a departure from the original agreement. Am I still obligated to fire some clients? Occasionally, you place bets. Having everything laid out so clearly above his signature makes it hard for a customer to complain.

Is the usage of contracts in your company optional? The next step is to provide your customers exactly what they asked for by posting a sign or making a handout that states your business's expectations. If your services, charges, scheduling, return policy, etc. are all laid out in a clear poster or handout, the consumer shouldn't have much to complain about.

The immortal last words, I know.

Location:

Share :