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How to Fire Bad Customers: A Simple Framework for Small Business Owners

How to Fire Bad Customers: A Simple Framework for Small Business Owners

After your sales team scratches and claws for each account, it is often easy to forget about purposefully curbing your client list. No matter how important your customers are to you, some of them just aren’t worth the time.

Below, we discuss how to figure out if a customer is bad enough to fire, and what you can do about it.

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Differentiating “good” and “bad” customers

The first step is determining whether or not you actually have any bad customers. One thing you do not want to do is simply pick the customers that complain the most and get rid of them. These customers are actually extremely valuable. A recent survey found that if 27 people experience a problem, only one actually reports it. Without those people alerting you to your shortcomings, you may never know how to improve for the rest of your customers.

Here are some important questions you should ask yourself when deciding whether a customer is worth firing or not:

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  • Do you make money from the account? If you are actually losing money on a customer due to frequent returns, outrageous demands, or slow payments, you can get rid of them without thinking twice.
  • What is the opportunity cost of servicing them? Consider whether or not you are spending too much time on low-profit customers. Usually, this time can be better spent focusing on growing higher potential accounts.
  • Does the customer hurt morale? Some customers will be profitable, but treat their account managers or sales representatives abusively. If their behavior is severe enough, cutting ties could be warranted.
  • What else do they bring to the table? Think carefully about any other benefits a customer might bring to the table for you. For example, if they have offered referrals or positive reviews in the past, even if they are not profitable or are hard to deal with, the ancillary benefits could be worth keeping them around.

Contemplating your alternatives

After identifying your problem customers, avoid cutting them loose immediately. Take the time to see if there are any alternatives available to you. You might consider hiring a junior salesperson to handle lower-value accounts while the experienced reps take care of the most important ones.

Another good strategy is simply laying out the facts instead of cutting ties with them. Explain the problems that you are having with them in a polite manner. Let the customer decide if they are willing to make fewer demands or would prefer to find another vendor. They might be unaware that they have been difficult, or quite willing to lower their demands in order to save the business relationship.

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Breaking the bad news

If you have determined that a customer is no longer worth your time and there aren’t any alternatives available, you must figure out how to fire them gracefully. This is an uncommon business proposition and can be quite awkward. However, you can take the following steps to ensure that the separation goes as smoothly as possible:

  • Keep it short and professional. Do not bring emotion into the conversation or engage in any arguments. Simply let your former client know that you will no longer be doing business with them.
  • Offer a referral. If you are comfortable doing so, provide the customer with the name of a competitor who might be a better fit for them. Doing so will minimize the impact on their operations and lower the chance that they will spread ill will towards your company.
  • Try to leave the door open. The only consistent thing in business is change. A company’s budget could increase exponentially, or their purchasing manager may change. Leave on the best terms you can in order to keep your options together open in the future.

Nipping the problem in the bud

As you weed your problem customers out, take care to identify any patterns between them. You might notice that businesses of a certain size or in a certain industry tend to cause more problems. Take a look for any early warning signs that raised a red flag early in your business relationship. Identify these customers and try to train them better from the very start. In many cases, you can preemptively avoid account issues with strategic customer onboarding. The better you become at nullifying problem customers from the beginning, the less time you will waste handling and firing them in the future.

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Getting rid a customer is never an easy proposition. Having the chance to develop more profitable relationships and relieve your account managers of unnecessary hassle, however, is well worth the effort. By following the steps outlined above, you will drive more revenue and make life easier on your employees.

Featured photo credit: VIKTOR HANACEK via picjumbo.com

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Last Updated on May 23, 2021

10 Best Free Job Apps You Need For Effective Job Hunting

10 Best Free Job Apps You Need For Effective Job Hunting

Seeking for the right job but not sure how to do it in a more effective way?

Try job search apps!

To make the job hunting process easier, I’m recommending 10 best job apps that can help you look for the right match anywhere at any time. The best of all? They’re all free!

1. jobandtalent

jobandtalent

    Great for browsing new jobs as you commute home via subway, bus or carpool, the jobandtalent app is like a Pinterest for job seekers.

    Easily browse, save and revisit job postings from your smartphone and receive notifications about jobs that match your professional qualifications.

    Download it for iOS and Android.

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    2. Jobr

    jobr

      This job hunting app is unique in that it lets you anonymously browse job listings based on your professional resume. If a company that you like also shows an interest in you, the app let’s you chat directly with a company rep. Great for getting your foot in the door and making a memorable impression.

      Download it for iOS.

      3. Monster Job Search

      monster job search

        I’m a big fan of Monster. It’s one of the first job sites employers think of when they want to list a new position online. The Monster Job Search app functions pretty similarly to the normal website, so it’s very easy to use for not-so-tech-savvy job hunters.

        Download it for iOS and Android.

        4. Jobs and Career Search

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        job and career search

          This is a good, simple app for browsing global locations for your next job. With a job index of more than 50,000 jobs listed globally, this app is a good choice if you are moving to a new area and want to line a new job up quickly.

          Download it for iOS.

          5. Hyper Networking Groups

          hyper networking groups

            This job hunting app isn’t so much a job hunting app as it is a connections hunting app. It’s great for learning who’s who in your desired field and forming connections. It also shows you how you and your industry connections are connected via your social networks, so you can follow up with them on your other social sites.

            Download it for iOS.

            6. CardDrop

            CardDrop

              CardDrop is an awesome job hunting app that let’s you digitally drop and pick up virtual business cards. This app is great for helping you make new connections at seminars, interviews, meetings and conferences. You can also attach social media profiles to the cards you pick up or send to enable easier connecting on social networks.

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              Download it for Android and iOS.

              7. Job Interview Questions

              interview questions both

                Okay, so this app looks kind of outdated, but it’s super useful for getting you into the swing of answering any kind of interview question that is thrown your way. The big benefit of using this app is that it explains to you what your interviewers motivations might be for asking you a specific kind of question. Learn what your interviewer is looking for in your answers and be more prepared for the real interview when the time comes.

                Download it for Android.

                8. 101 Interview Questions and Answers

                101 both

                  This app is great because it provides guidance about the kinds of answers you should give for each kind of question. Think of it as an essay rubric but for job interview questions.

                  Download it for Android.

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                  9. Job Interview Question-Answer

                  q and a

                    Feeling confident with your text-answered interview questions but concerned about doing the face-to-face interview? This app prepares you for interacting with your interviewer by simulating an employer asking you questions.

                    You can record your response and see what you look like to the interviewer to understand what movements, vocal pauses, etc. you need to work on.

                    Download this app for iOS and Android.

                    10. HireVue

                    hirevue

                      HireVue is a great job hunting app for those times when your interviewer wants to get some preliminary questions out of the way.

                      When an interested employer wants to interview you, they send you a request via HireVue and you can answer it in your free time, when you’re ready. Your interview might consist of a some FaceTime, some multiple choice questions or open-ended text answers and can be completed and sent to the interviewer when you’re finish.

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                      Download it for Android and iOS.

                      Featured photo credit: Yura Fresh via unsplash.com

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