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How to Fire a Bad Customer
Content Crooner Inc.
In business, it is never a good idea to burn bridges. Customers are the lifeblood of any company and it is a company's goal to maintain good client relationships. But, in the course of doing business, differences of opinion can happen and relationships can become unstable. Once that happens, a business professional may be faced with trying to decide how to fire a client. The real solution to this kind of an issue lies with your company's policies and not the client's anger.
One of the golden rules of business is to never stop doing business. In order to do good business, a company needs to have a comprehensive set of guidelines that outline the relationship with every client. There are sales guidelines, customer service guidelines, product return guidelines and accounting guidelines. When an account is established with a client, it is important to review all of these guidelines with the client to make sure that the conditions of the relationship are understood. If the relationship breaks down due a misunderstanding about the terms, then that is your company's fault and not the client's.
You don't fire bad customers as much as you make sure that they do business within the relationship guidelines. When things are going well with a client and the client treats you and your company with respect, then sometimes those guidelines can be moved a little. Or can they? Companies need to remember that one of the worst things a business can do is give a client precedent to break the rules. When the relationship is going well, you can negotiate different terms to the agreement. But those rules should always be adhered to. If you are no longer able to extend rule-bending courtesies to the client and the relationship starts to go bad because of it, then that is your fault and not the client's.
But let's say that the relationship was always by the book and it was profitable for years. Your client got the products he needed and you were rewarded with a consistent stream of revenue. Then your client started to ask for concessions that were not in the agreement and you refused. During the good times, going by the contract was never a problem. But now that the customer is experiencing changes to his business he wants you to bend the rules. You offer to renegotiate the agreement that governs the relationship. The customer refuses and stops paying his bills. This is the genesis of a bad customer.
The solution is to follow your company procedures to the letter. You issue collection letters and freeze the account like you would any other client. You negotiate with the client's accounts payable department to get the invoices paid and you refuse to ship any further orders until the bills are paid. At that point you are forced to require the customer to pay for all orders up front and the customer stops ordering.
What just happened is the professional way to fire a customer. But you really did not fire the customer. You stuck to your policies and the terms of the agreement and the customer decided to stop doing business with you. Your company protected itself by requiring payment up front, and the revenue stream stopped. It is the best possible way that the situation could have played out for your company. But it doesn't end there.
Over time, things can change at your client's company. The person you are dealing with may leave the company and the replacement may see that your company was offering good product at reasonable prices and wants to re-establish the relationship. Since you did not officially severe ties, you can re-visit the account and negotiate new terms to the relationship.
If you protect yourself by following company policy, then a bad customer does not need to become a financial drain. If you make sure to remain professional and avoid burning bridges, then that stream of revenue just may begin flowing again at some point in the future.
Kenneth Vogt is CEO of Content Crooner, a high quality content distribution service that gets you more targeted web traffic. Discover how to create quality content that drives targeted traffic to your web site in our free report.
Article submitted Wednesday, November 30, 2011 & read 3 times.
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