You can fire customers

9 Jan 2006

Customers are not always right and they are certainly not always equally desirable. Certainly customers should be treated with dignity and respect, but your company should have a very clear idea of which customers they want and, more importantly, those they do not want.

Think about some of your major accounts and ask the following questions:-
Is this really a good account? Is it profitable?
Is the revenue stream profitable or is it just a substantial quantity of low margin transactional sales?
Does the account demand special treatment on its orders - perhaps getting a quantity price yet be allowed to have 'split' orders, increasing your shipping and handling costs?
Do they demand extended payment terms like net 60 days or ask for and take a 10% discount yet never meet quick payment terms?
Do they want a consolidated invoice, special packaging requirements, dedicated internal service representatives or on-site representatives to help expedite orders?
Are your sales flat (or declining) yet the account is enjoying increased savings?
Are you giving more & more and getting less & less in return?
Are you getting your investments worth back from the account - what is your ROI from the account?
Are you participating in the account at a strategic level or at a tactical level yet supplying strategic account benefits?
Is this the account that always comes up in meetings with your company in a negative light?

There are probably many additional questions you could ask, but if you find yourself answering yes to a number of these or other similar questions, then perhaps you should consider 'firing' the account. If this account were a sales rep, would you still be agonising over whether to fire them or not?

You do not need customers from hell, who treat you like dirt; sap you energy and demean your people. You do not need customers that lose you money. Trying to partner with customers who have no desire for a partnering relationship and treat you with contempt, is either extortion or unrequited love. Neither is an attractive option.

Firing customers is not a casual option, and should only be done after careful analysis and consideration, and then done with a high degree of professionalism.

Learn from organisations such as Custom Research Inc, the market research firm who 'fired' 77 of their 157 customers, because they were unprofitable or a poor cultural fit. The result - revenues tripled and profit doubled.

Limiting the number of relationships it manages has allowed CRI to spend more time learning about accounts and developing these business relationships.

Account managers now spend time learning about the customer's strategy, their customers, their customers' customers, their industry, and where relationships had gone wrong with previous market research firms.

Firing customers is a scary business, and not for the faint hearted. Your reps will fight you every inch of the way. But, if handled with skill, tact and tenacity, it could be the most profitable move you ever made.