When Should I Fire a Customer?
“When should I fire a problem customer and how do I stop them from badmouthing my business online?”
This is an interesting and important question that many business owners don’t take the time to consider. As with any relationship, there are situations in which parting ways may be the best step forward. Even in business where it’s assumed that the first priority is always to acquire and retain customers, circumstances may still arise that justify the ‘firing’ of a customer. Determining exactly when you have arrived at this point requires the consideration of many factors, and mitigating the fallout of this decision can be even more difficult. One thing is certain though, the customer is not always right.
The possibility of firing a customer is the counterweight to that of them terminating relationships with a business. Although the power dynamic may appear to skew more heavily in favor of the customer, both possibilities need to exist in order for the business relationship to remain healthy. As Business Know-How puts it, “this relationship should be based on a win-win or mutual value premise.”¹ If this exchange becomes unbalanced with the drawbacks outweighing the benefits, the necessary next step will be to either resolve the issue or pursue other options.
The factors that justify firing a customer are subjective and often specific to that business. However, some common indicators to look out for include:²
- Being asked to engage in unethical business practices
- Changes to scope while expecting costs to remain the same
- Unreasonable and consistent delays in payment
- Mistreatment of employees and lack of respect for their time
- The relationship does not and will not produce a profit
In general, if the customer relationship no longer corresponds to the needs of the business, it may be time to move on.
Knowing when to end a relationship is valuable, but even more important is knowing how. Customers are typically individuals or groups of individuals with networks much wider than we expect. It has been proven that any one person is only within six degrees of separation of another.³ Especially with the rise of social media, the possibility of this decision negatively impacting your business is much more likely. So a better question to ask is “how do you fire a problem customer amicably”. Now, spoiler: there is no definite answer, each situation requires its own approach. But a general outline that will point you in the right direction looks like the following:⁴
- Be appreciative and positive, they were supporters of your business after all
- Frame the situation properly, fully communicating what brought you to this decision
- Waive/refund recent fees as an act of goodwill, it will often make the process go smoother
- Apologize for having to make the decision, it is not one you would typically want to make
- Offer alternatives to your business, don’t leave them hanging
Finally, use this incident as a teachable moment for your dealings with existing and future customers. Though the customer may have been in the wrong, some of the responsibility still falls on you. Ensure that you fully communicate expectations and concerns while establishing firm boundaries from the outset. The customer can’t know that they’ve crossed a line if they do not see the line. And monitor consistent issues with customers in the case that there is an underlying problem within your own business. The truth is, you never want to have to fire a customer.
Footnotes:
[1] When and How to Fire a Bad Customer
[2] When and How to Fire a Customer Without Hurting Your Brand
[3] Microsoft Proves There are Just Six Degrees of Separation Between Us
