Think fast: Who is your worst customer?
How many names popped into your mind? No one in particular? That one perennial thorn in your side? Or multiple names that you’d rather not see on the caller ID?
If you fall into one of the first two categories, you can count yourself lucky. If you fall into the last category, you may want to make a fresh start in the new year by following this five-step process for “firing” your worst customers:
• Define “bad”: If any of your customers have really gotten under your skin, recruit a partner for this exercise who can play devil’s advocate and help you get past any feelings of resentment as you work towards defining some objective criteria.
For your business, what makes a bad customer? Is it late payment, last-minute emergencies, or late-night phone calls? Do they consume disproportionate amounts of time, attention or energy? Or are there interpersonal dynamics you can put your finger on, such as a lack of appreciation or courtesy? Try to define your criteria in measurable ways that a third party could conceivably verify through observation.
• Try rehab: Rehab isn’t just for celebrities. Once you are able to clearly describe the behavior that makes the customer undesirable, come up with a plan for rehabilitating that behavior. Your plan should include specifics about what you would like your customer to do instead, as well as a way for you to introduce that new behavior and reward it.
For example, let’s say you have a customer who routinely blows up your schedule with last-minute requests. Try scheduling a meeting to ask for a three-business-day lead time for all requests, and perhaps even start sending them a routine Monday email to check in on what they’ll be needing by that Friday. And if they show signs of improvement in providing you that extra lead time, be sure to let them know you appreciate it.
• Adjust pricing: If rehab doesn’t work, consider adjusting your pricing to make up for the extra inconvenience that your customer is costing you. The new year provides an opportunity to communicate new fee structures, including rush charges and the like.
Service providers often quote prices based on the average customer, and they don’t always track all the extra time and effort required to respond to voicemails and emails and requests for extra meetings. You may also need to invoice for extra expenses, such as materials or travel time.
• Refer out: If adjusting your pricing doesn’t work, you may need to start casting about for a referral. Ideally, you have an industry colleague who would be interested in the business, especially if it is a matter of personal chemistry, versus chronic late payment. Having such a name in your back pocket is just another reason to get out there and network.
• Have the talk: In the end, you may need to sit down with your customer and have “the talk.” Stay calm and professional, provide a reasonable transition period, and offer assistance in finding a replacement.
Your (soon-to-be-former) customer may want to know why they are being “fired,” and here you’ll want to tread carefully. If you’ve followed all of the steps, they should already have a good idea why it’s not a good fit. I recommend preparing a couple of reasons in advance, so that you aren’t caught off guard by the question. For example, “I’ve decided to concentrate on longer-term projects and the strategic planning work that I’m best at, so I’d like to help you find someone who can be more responsive on a day-to-day basis.”
Not all business relationships last forever, and that’s OK. Having a systematic process to weed out customers who drain you and your business will benefit everyone in the long run.
Do you have a story about a particularly difficult customer? What did you try and what worked the best? Email me at TheJennieWong@gmail.com with your experience.