Hot Koehls

The more you know, the more you don’t know

This content is a little crusty, having been with me through 3 separate platform changes. Formatting may be rough, and I am slightly less stupid today than when I wrote it.
07 Jul 2009

Firing a customer is okay, but not in this case

An effective business always remembers that their relationship with a client is a two-way street. If the client isn’t holding up their end of the bargain, the company can and should drop them. This is called firing your customers. The discussion surrounding this notion, both pro and con, is pretty vast, and I recommend you do your own research to ensure you take the right approach for your market, your business, and yourself. However, in most cases the decision to fire a customer stems from one or both of the following basic scenarios:

    * The client is a calculable drain on resources (i.e. the client is a net negative income) * The client is a complete pain in the a**

My personal feeling is that both situations grant justifiable cause to at least consider dropping the customer. In the case of A, something is seriously screwed up with the terms of the relationship. You initially charged too little or promised too much, or the client somehow wrangled you into that position after the fact. Whatever the case, the relationship has to be balanced or eliminated. Scenario B is self explanatory. In addition to generating a massive amount of stress and anxiety around the office, these cases often lead to Scenario A. In short, I would try to repair a relationship in Scenario A, but I would get rid of a B client as fast as humanly possible. Today a friend presented me with Scenario C, which is a landmine for businesses. The web developer for my friend’s company dropped them as a client recently. In the Dear Jon email on the matter, they stated that the relationship was “no longer engaging for less than $XX per month.” Smack No! Bad web developer! Let’s put aside the possibility that it was cover speech for the aforementioned Scenarios A and B and assume that the profit margin was the primary reason at work here. Unless there’s another con in the relationship to point to — perhaps toeing the line on B — this is never ever a good reason to drop a client. Businesses grow by building on past success, and you have your clients to thank for the opportunity to create that success. Dropping smaller clients for bigger fish is a helluva way to say “thank you” to clients who helped get you started and/or grow. No matter how awesome the work that my friend’s company received, that developer will only get bad reviews from here on out. Referrals, both good and bad, are the most powerful advertising you can’t buy. I’m on several business networks, and participants are often asking for web help. This developer has actually come up in a few cases. Guess what the response will be the next time someone asks about my experience with them? And consider the payoff to the developer. There are always bigger fish, so this practice only helps engender a reputation as an “ambulance chaser” of sorts. It’s a clear indicator that money is your first, last, and only motivation, and no one likes working with a company that’s purely concerned with the bottom line. You generate bad blood, and only get the opportunity to make more money in return (Which you had to begin with! Expand, hire more people, work harder!). There’s no way you come out looking like anything other than a money-grabber. Firing a customer is fine, but you better make sure you have your head on straight before doing so.

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