Business Reasons to Fire Bad Customers

Businesses have had to get smarter to operate leaner and healthier in a good or bad economy. Along the way they have learned a valuable lessen that states: Sometimes the sale or deal or widget, etc. just is not going to be worth the money or headaches or employee turnover, etc. that one of your customer warrants. It was previously harder for most businesses to let go a client because no one wanted a bad reputation haunting them if the word ever got out that they had not bent over backwards to keep every single client that walked in the door, good or bad.

But management finally started tallying up the positives and negatives and the balance sheet wasn't always showing positive. Bad customers can be measured; you just have to set up a way of recording all of the costs that go into trying to keep the problem customers in your books. Set up your accounting to make sure you have both sides of these transactions; meaning the sale that the customer represents and all of the costs that were incurred because this particular customer required extra overtime or refunds or if you have high turnover when your employees have to deal with this person or company. This does usually require extra analysis but is usually very telling in the end, because you can look at the black and white figures and see where it is just not in your best interest to keep doing business with these entities.

Most of the time Problem Customers are not new to being fired as you may not be the 1^st business to "let them go" or to "ask them not to do business with you" anymore. Some companies and some individuals run rough shod over customer service employees, etc. and feel that the ends always justify the means. But there is a balance in life that says eventually if you keep abusing companies and their employees karma will catch up with you. So don't be surprised if you hear from the grapevine that these people or this company is difficult at best.

If you know that your bad customers are just a temporary part of your business and you can see that the situation will right itself in time; then you can just ride out the storm. But, if you are continually seeing red in your revenues and also stress levels you may want to do some more detective work and figure out if you could possibly replace a negative out with a positive.