How to Fire your Customer

Are you ready to get rid of a client?
Over my last couple of articles we have discussed why firing customers can be a good business practice. We have also looked at how to choose the right customers to get rid of.
By now you may have decided that you have one or two clients that are no longer right for you. You may be ready to say goodbye to them.  So how do you go about this?
One strategy is to talk to them before making a final decision.
Consider holding a review meeting with your client
You may wish to talk with a customer and share with them how you feel about the relationship. If they have a sizeable turnover, it is worth making every effort to get things running smoothly and profitably. Some clients do not realise the problems that they are causing their suppliers. They may be prepared to change their ways.
However, many problematic clients are set in their ways. They may also only have a small turnover. In these cases, it is not worth the time and effort to hold a meeting. Instead, you have two options.
Option 1: raise your prices
Consider raising prices with problem clients. Put your pricing at a level where you are happy to put up with these customers. You want them to be making you a good enough profit to make all the stress and time servicing them worthwhile.
When you raise your prices two things can happen. Firstly, the client will decide to move to a cheaper supplier. Congratulations! You have now rid yourself of a client that you didn’t want.
Some clients will continue to work with you. In these cases you now have a high margin client. They are now paying their way.
Some clients will argue with price rises and demand the same level of service for their original pricing. There may also be some low-turnover clients that you no longer wish to deal with. They are too much trouble, no matter how high a price they are prepared to pay. That’s where the next strategy comes in.
Option 2: fire the customer
Send these clients an e-mail or a letter. Explain to them that you have held a customer review. Give them a logical reason for ending the relationship. For instance, you could tell them that they now fall under a minimum turnover or quote conversion level. It is important to give them a logical reason: no-one likes to be told that they are being fired because they are difficult to work with!
You should also consider giving these clients a fair notice period. This might typically be 30 days. This gives them time to find an alternative supplier.
Remember, always end the relationship on a professional note. After all, you may eventually run into your contact at another company that you do want to work with.
I was once fired by a printing company
The sales person visited me to tell me that they no longer wished to work with my company. We had been giving them a lot of quotes. But they were winning very little work. It just wasn’t worth them spending their time producing all the quotes for us. They were better off investing this time in more profitable customers.
It didn’t feel good to be given notice. However, when I thought about it, I realised that this decision actually helped us. We went on to source a supplier that was more suited to our company. I also recognised that the printer had made a sensible business decision.
Make sure you make the same sensible business decisions for your company.
Editors Note: This post is part of a larger series on managing your customers:

PS If you’d like more ideas on how to engage with today’s buyers, download my free e-book “Ten Common Print Selling Errors and What To Do About Them”. You’ll also receive my regular “Views from the print buyer” bulletin, full of ideas on how to sell print effectively.

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