When to Fire a Customer
Updated: Aug 19, 2021
Sometimes you end up with a customer that really shouldn't be a customer. It's best for everyone involved for you to part ways.
I want to talk about how to know who those customers are and when and how to fire them.
Who should you fire?
This matrix from the Unified Funnel Metrics framework (Voyageur U) maps your customers in relation to how healthy your relationships are with them.
The upper right quadrant shows the Value customers.
Those are ones that buy a lot from you and have a good opinion of you.
By the way, having a good opinion of you is a proxy for a culture fit. It's not just their opinion of you - it's how Simpatico you are with them.
The two quadrants in the corners - Potential and Risk - are accounts that need some work but are still really important to your future. Potential customers think think well of you; it's a good match. But they're not buying a lot. Risk customers buy a lot, but there are relationship problems.
You want to work on both of those relationships to get them in the Value quadrant.
Fire your Distraction clients
The Distraction clients, are the ones you need to fire.
I'm not talking about getting them angry at you or doing something that's harmful to them or you. You want to do this in a way that's positive.
When and how
You don't need to rush into this; there's no reason to act rashly.
Once you identify these clients that are better off not buying from you, come up with a plan for the right time to separate. Maybe it's the end of a contract, or at a point of a product change or a service upgrade. You're looking for a time that's going to be less disruptive for them and for you.
In that transition, you want to think it through and manage it to the same level that you would manage a deployment with a new customer.
The fact that they're not your customer anymore doesn't mean that your relationship with that company and those people is not still important.
It's just like in your career; you don't want to burn bridges. You can actually build bridges if you do this well.
If it's not a good fit, you are actually helping them by initiating this this change.
And if you do it in the right way, you can actually strengthen your relationship and your reputation because you're doing good by them.
This might include recommending an alternative vendor that is a better fit for them, finding an advisor for them or speaking on their behalf. Help them to get to where they need to be.
I like to view customers as a portfolio. You have a variety of clients with different value for you just as you have different value for them. Like any other portfolio, you need to rebalance it on occasion.
I recommend that for you.