Article -> Firing Bad Customers is Good for Business
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Date Added: October 2007
Customers come in two styles – right ones and wrong ones. Allocate time to completely satisfying the right customers. As for the wrong ones, fire them. Sooner rather than later.
Recognizing the difference is easy – the wrong ones cause you to lose sleep. Firing is the hard part. Recently, a business owner asked how to deal with a long-time customer causing undue stress, lost profits, and discontent within the organization. My advice was to determine if the customer needed to be fired.
While ending the relationship may be uncomfortable, it often makes good business sense. Every organization can protect itself from this situation. Create a process to determine which customers are right and include it in the corporate strategy.
Recruit. Profile the right customers for your organization. Assess organizational strengths and core competencies before determining ideal customers’ characteristics. This may include criteria based on industry, size, location, ease of doing business, and bottom-line impact. Develop relationships with the right customer touchpoints to build partnerships.
Retrain. Typically, training is viewed as an employer-employee tool. Yet, new customers need training – and existing customers need retraining – on the best way to do business with you. The Ask, Listen, Learn, and Act (AL2Asm) process reveals gaps and opportunities within the partnership. Investing in deeper bonds with best customers creates completely satisfied customers. They, in turn, become more loyal.
Reward. Show loyal customers you appreciate their business. Allow each customer to tell you. Knowing your customers well requires deeper exploration into your partnership dynamics. The AL2A process exposes your customers’ most important rewards. Sometimes, customers simply want a phone call to know they’re appreciated.
Retain. Once you have the right customers, strive to keep them. This takes tremendous effort, supporting the rationale of having the right customers in the first place. If your organization is spending time pleasing customers who are not contributing to your productivity and profitability, rethink your strategy.
Roles. As in employer-employee relationships, customers also fill roles. Some help keep your people employed through volumes of work, while others contribute to high profitability. Some customers value service more than others and are willing to pay extra for exceptional performance. Right is right for many reasons.
Wrong is still wrong under any circumstance. We all encounter occasional unpleasantries, so look for patterns. By taking a strategic view of which customers are good for business, you can devote time to growing instead of firing – creating a happy ending.
This article was published in the Green Bay Press-Gazette on October 14, 2007.