When Is It Appropriate to ‘Fire’ a Customer?

By Liz Greene

We all know it’s far more profitable to retain a current customer than to acquire a new one. Perhaps that’s why so many business owners hold onto problem customers at all costs, even when firing them is the right move. However not giving these troublemakers the pink slip can end up costing your small business a massive amount of time and money — not to mention causing immeasurable frustration and distress. But how do you know which customers to fire? And how exactly do you go about doing so?

Let’s take a closer look.

Which Customers Should You Fire?

Since firing a customer is not something to take lightly, you need to be absolutely sure that the customers you cut loose are more harmful than they are helpful. If so, eighty-sixing them will allow you to focus your time and energy on the clients and customers that actually deserve it. Here are the problem customers to be on the lookout for:

Morale Busters

Though you have to have enough income to pay the bills, it’s important to note that there’s no amount of money that can make up for being miserable — and true problem customers are the ones that make your life miserable. They’re often obnoxious, condescending, disrespectful, unrealistic, and use fear in an effort to get results. Furthermore, they make your staff miserable, and unhappy employees aren’t productive employees.

Unreasonably Demanding

Every business owner has come across this client at least once. They’re the ones that never have a good word to say, complain that your service/product is substandard, and no matter how hard you try, there’s no reasonable way to satisfy them. They make excessive demands, wanting refunds with no product or proof of sale, free services far beyond the confines of their original transaction, and discounts so ludicrous that they border on extortion.

Abusive

If you see the following behavior from a client or customer, it’s time to fire them — no ifs, ands, or buts.

  • Explosive temper or throwing tantrums
  • Destruction of property
  • Foul language or insults directed at staff or other customers
  • Sexual harassment or abuse toward staff or other customers
  • Racist, sexist, ableist, homophobic, or other disparaging language
  • Threatening staff or fellow customers
  • Physical violence

As a business owner, one of your most important jobs is creating a safe environment for your employees and customers. A client or customer that crosses the line into abusive or threatening behavior has no place in your business.

How to Go About Firing a Customer

When you’ve identified who your problem customers are and have decided to let them go, it’s time to make a solid plan. First you need to determine when is the best time to cut ties with them – e.g. immediately, at the fiscal quarter, when your project is completed. If you have the option to do so, you may also want to choose where to do it (i.e. a neutral location). Finally, and perhaps most importantly, you’ll need to know what you’re going to say.

For clients you offer a service to, you’ll have a lot to cover. Keep your tone professional and courteous, and, without placing blame, explain that you feel your company isn’t the right fit for their needs. Give a clear explanation of how the relationship will end, including a solid time frame, what duties you’ll fulfill, and (if possible) a referral to another business. For a more detailed look at how to do this, check out Firm of the Future’s helpful template to quickly and elegantly end a client relationship.

For customers in a retail environment, you’ll want to move the process along fairly quickly. Customers will most likely take being “fired” very personally, so it’s important to remain calm and explain your reasons as clearly and rationally as possible. Consider saying something akin to the following:

“I really appreciate that you’ve taken the time to do business with us. However, it seems that we haven’t been able to keep you as a happy customer. Perhaps it’s best if you choose to shop elsewhere from now on.”

Then, do what you can (within reason) to give the customer a full or partial refund. Even if you feel the refund is undeserved, it will function as a guarantee of sorts that you did all you could to make amends. This will help to preserve your company’s reputation.

Keeping problem customers around is terrible for business. They drain your resources, demand more than their fair share, destroy your employees’ morale, and require far more attention than is truly profitable. For the sake of your sanity and your bottom line, cut ‘em loose. I promise you’ll feel a lot better in the end.

• • •

Liz Greene 300x300Liz Greene is a dog loving, beard envying, pop culture geek from the beautiful city of trees, Boise, Idaho. You can catch up with her latest misadventures on Instant Lo or follow her on Twitter @LizVGreene.