Sometimes it's best to fire a customer
Written by Shirley Lichti for The Record, July 19, 2000

Have you ever wanted to fire a customer?

This probably sounds like sacrilege to many small business owners. But every once in a while you end up in a situation where you realize things are just not working.

Sometimes the relationship sours. Or maybe it wasn't a good fit from the start.

Too often, companies are driven by growth and become consumed about getting larger and larger. Doing this means attracting more clients.

Yet in adopting this strategy, many companies drift away from their core competency, taking on clients whose needs they have little hopes of satisfying.

Taking on the wrong customers saps your time, energy, confidence and profits.

I know from personal experience. When I've taken on customers who weren't a good fit, their projects have always dragged on far longer than they should have. And when the projects finally wrapped up, there was never a sense of pride or accomplishment.

Enthusiam Killers
Taking on the wrong customers kills your enthusiasm. Worse yet, by the time you realize the negative effects the customer is having on you and your staff, you may have driven away customers who are a good fit, simply because you are no longer representing your company in the most positive light.

There's no doubt about it - firing customers is an unpleasant and painful experience. But rather than learning how to fire customers, let’s look at ways to avoid the experience.

You need to understand what kinds of customers are a good fit. Start by asking yourself "What business am I really in?" Knowing this, it becomes easier to recognize what business to stay away from.

Understand your core competency, that is, what do you do really well.

Many companies define themselves through the products or services they offer. For example, my own company defines itself as being in the marketing communication consulting and training business.

Narrow your focus
Narrowing your focus may be painful at first because you will find yourself saying no to new business. But much as you wish, you cannot be all things to all people. You need to define the types of projects and tasks that mesh with your experience and allow you to do a good job.

If appropriate, define industries where you have specific skills.

I worked with a retail customer a few years ago. This proved to be a mistake since I had little knowledge of the industry. It served as a good reminder that my expertise was with high-tech and services-based companies and I have since focused my efforts in these areas.

Who do you want to attract?
You should view your business as an ideal client magnet. Ask yourself, what are you doing to attract clients who are a good fit?

Analyse the customers whose needs you are currently serving well. Determine what it is that makes the relationship work. Then look for more customers like them.

Don't overlook your promotional materials. Ensure that these are consistent with the kinds of customers you want to do business with.

Promotional offers should be designed to attract only customers who are a good fit. Likewise, using an unprofessional brochure you put together yourself and ran off on your laser printer is unlikely to attract customers who are willing to pay for high quality consulting services.

Who do you not want to attract?
One of the reasons companies have to fire customers from time to time is because they don't spend enough time thinking about who they don't want work with.

Each company needs to determine its own criteria for customers it cannot or does not wish to serve.

For example, tight deadlines and even tighter budgets are not uncommon in the world of marketing communications. However, one past client had very unrealistic expectations. Every job needed to be completed "yesterday."

This was extremely limiting for my graphic designer and very frustrating for me. For me, unrealistic expectations now signal "Not a good fit."

In analysing my own business, I realized I do my best work creating an entire marketing strategy, one that takes all promotional elements into consideration and ensures consistency across all communications. As a result, I now refer customers who only want a new logo, business card or brochure to others.

Learn to say no
Continually remind yourself what makes a good customer. Customers who do not fit the criteria you've defined should be referred to colleagues who can meet their needs.

Occasionally I lapse and take on the wrong kind of client. I always regret it later. The only credit collection problem I've ever had in more than six years of doing business has been with a customer who wasn't a good fit.

Saying no can be a growth strategy. It frees you up to concentrate on getting the right clients. Even if this results in fewer customers for a while, it will allow you to focus on doing a great job for them.

This usually results in happier customers, in turn, who refer your company to others.

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