You’re Fired! It Works for Customers Too.

I love customers mug

Sometimes clichés can become so pervasive that we fail to think critically about their meaning or the full implications of the statement. A classic example in business, generally, and customer service, specifically, is “the customer is always right.” To state the obvious, the rationale is that no matter how difficult, rude and unreasonable a customer may be, that customer is paying the bills — and you should do whatever it takes to make that customer happy.

In his article “6 Signs It’s Time to Fire a Client” for Entrepreneur.com, Jayson Demers dives into this topic in detail. Three of his six signs are “you can’t stand working with the client,” “there’s a lack of respect,” and “there’s a lack of communication.”

These are all valid gripes with nasty customers; however, the one that Demers lists first — and the one we think is most significant — is “the client takes more time than he or she is worth.” As Demers says:

“…at the end of the day, you’re running a business. For that business to be successful, you need to earn more money than you spend. If you end up spending more money or time (as an equivalent of money) on a client than he or she is directly paying you in compensation, it makes sense, from a logical perspective, to end the relationship as this person is literally costing you money.”

This is really the bottom line, and the key word here is “worth.” From a financial standpoint, let’s equate this to revenue. Unfortunately, worth is a tricky thing to measure when it comes to customers. The implicit notion that worth is simply equal to the fees a customer pays you is misleading — think referrals, strategic partnerships, etc.

Particularly for new businesses, those first few customers might be loss leaders. They use up more resources than they are worth, but they tell their colleagues and connections about you, and they drive more business through the door. The last thing you want to do is upset a potential source of referrals by firing them.

Profit is based on two basic components: revenue and cost. The idea that the customer is always right errs on the component of revenue without fully considering the costs that are inherent in maintaining some customer relationships. A savvy businessperson needs to consider both sides of the profit equation and accept the fact that, occasionally, keeping a customer might not be worth the effort.

Have you ever made a decision to fire—or turn away—a customer?

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