Fire Your Customers, The Easy Way.
Yesterday we talked about salvaging customer relationships by establishing rules. If establishing rules doesn’t work with some of your customers then additional action may be necessary. If a customer is not following your rules, if failure to follow the rules is costing time and money, then it may be time to “fire” your customer. Firing sounds harsh but, in essence, you are severing a relationship. Now this does not apply to situations where you have a legally binding contract or agreement, other methods are required in those cases.
Most of us hate conflict. As confident as I may be that a customer relationship must end, it is still a difficult process. Breaking up with a girlfriend/boyfriend is pretty difficult and breaking up with a customer is just as emotionally difficult especially when they really want to be a customer. As I mentioned yesterday, first make sure that the customer has been made aware of the rules, sometimes they just don’t get it and need to be told more than once. Knowing, understanding and following the rules can cause an otherwise difficult customer to turn into a great customer.
Now if you’ve established the rules and find that a customer relationship just isn’t working it may be time to sever the relationship. There are couple of ways to do this with a minium of conflict. Understand that it isn’t an easy process so being prepared is the absolute way to keep the process as smooth as possible. Every year I fire two or three customers. It is never easy but I get through it and always have a sense of relief.
The first step in managing customer relationships is to establish rules as we’ve previously discussed. I bring it up again because it is so very important and will eliminate the need to fire lots of customers. It’s a weeding out process.
After establishing your rules, the next best thing you can do is to screen potential and new customers. The ability to properly screen new customers is heavily contingent upon your acceptance of one simple fact: not every customer is a good customer. Accept that survival of your business is not and should not be hinged upon any one customer. I know that early on in a business’ life the instinct is to grab every customer you can. I used to get angry when someone wasn’t my customer, when someone went to the competitor… how dare they, my service is so much better… Well, I can tell you now that I am glad not everyone is a customer, I don’t want or need the hassle. So learn to screen. When a potential customer is in front of me, I can assess a lot of information about them. There are certain things that stand out, it’s just like interviewing a potential job candidate. I ask a lot of questions. The way a person handles the questions and the answers says a lot to me about whether or not I think I can work with them. Just the same, it tells me whether or not I’m the best candidate for them, to meet their needs.
If a person is pushy or rude, if they don’t want to answer the questions, if they sound put out or annoyed, I’m pretty sure it won’t be a good working relationship. I have already established rules about manners and respect and if someone is not respectful up-front, it won’t work. So your rules and any ‘red flag’ intuitions will give you some initial guidance.
If you decide that the potential customer is not a good candidate for your service or product, tell them up-front AND give them a referral. I have a prepared statement that I use and you should have one as well. Having a prepared statement makes the process smoother for you and for them. Mine is as follows: “Jack, it doesn’t sound as if we are the right place for you and your needs, but let me refer you to someone whose services are more in alignment with what you are looking for.” At this point, grab your business card and write the referral info on the back, keep talking, don’t pause. “GH&G is better suited to your needs, they specialized in xyz and really do a great job. Here’s the info.” At this point, you’ve ‘fired’ them and given them a place to go to get what they need. My experience has been that 99% of the time the potential customer thanks you and moves on, generally happiliy so. Now you may want to tweek my statement to fit your specific situation and you might feel uncomfortable telling them it’s not a good fit. You can tell them your booked up and don’t have time to take on new work if that makes you feel more comfortable.
The important thing here is to “cut ‘em off at the pass”. Don’t let the relationship begin if you know it won’t work. Firing a customer early on is the absolute most conflict-free method. It is THE most profitable method. Don’t wait until a customer costs you time, money and energy. Start out on the right foot.
Tomorrow we’ll talk about what to do when you’re in the customer relationship and it’s time to get out.
Best wishes for a profitable day!
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