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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 August 10, 2020

10 Things You Should Do If You’re Unemployed

10 Things You Should Do If You’re Unemployed

Regardless of your background, times today are tough. While uneven economies around the world have made it incredibly difficult for many people to find work, the recent COVID pandemic has made things worse.

Regardless of age and qualification, stretches of unemployment have affected us all in recent years. While we might not be able to control being unemployed, we can control how we react to it.

Despite difficult conditions, there are many ways to grow and stay hopeful. Whether you’re looking for work, or just taking a breather between assignments, these 10 endeavors will keep you busy and productive. Plus, some may even help push your resume to the top of the next pile.

Here’re 10 things you should do when you’re unemployed:

1. Keep a Schedule

It’s fine to take a few days after you’re finished at work to relax, but try not to get too comfortable.

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As welcoming as permanently moving into your sweatpants may seem, keeping a schedule is one way to stay productive and focused. While unemployed, if you continue to start your day early, you are more likely to get more done. Also, keeping up with day to day tasks makes you less likely to grow depressed or inactive.

2. Join a Temp Agency

One of the easiest ways to bridge the gap between jobs is to find temporary work, or work with a temp agency. While many unemployed people job hunt religiously, rememberer to include temp agencies in the search.

While not a permanent solution, you will be in a better position financially while you search for something permanent.

3. Work Online

Another great option if you’re unemployed is online work. Many different sites offer a variety of ways to make money online, but make sure the site you’re working for is reputable.

Micro job sites such as Fiverr and Upwork as well as sites that pay for you to take surveys, are all quick, legitimate options. While these sites sometimes offer lower pay, it’s always better to move forward slowly than not at all.

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Here’s How to Find and Land a Legit Online Work from Home Job.

4. Get Organized

Unemployment is an excellent opportunity to get organized. Embark on some spring cleaning, go through old boxes, and get rid of the things you don’t need. Streamlining your life will help you dive head first into the next chapter, plus it helps you feel like your unemployed time is spent productively.

Try these tips: How to Organize Your Life: 10 Habits of Really Organized People

5. Exercise

Much like organizing your life, another good way to keep yourself enthusiastic and healthy is to exercise. It doesn’t take much to get slightly more active, and exercise can help you stay positive. Even a walk around the block a few times a week can do a lot for keeping you motivated and determined. If you take care of yourself, you can make the most of this extra time.

6. Volunteer

Volunteering is an excellent way to use extra time when you’re unemployed. Additionally, if you volunteer in an area related to your job qualifications, you can often include the experience on your resume.

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Not only that, doing good is a true mood booster and is sure to help you stay optimistic while looking for your next job.

7. Improve Your Skills

Looking for ways to increase your job skills while unemployed is a good way to move forward as well. Look for certifications or training you could take, especially those offered for free.

You can qualify more for even entry level positions with extra training in your line of work, and many cities or states offer job skills training. Refreshing your resume, and interview and job skills may make your job hunt easier.

8. Treat Yourself

Unemployment can be trying and tiring, so don’t forget to treat yourself occasionally. Take a reasonable amount of time off from your weekly job hunt to recharge and rest up. Letting yourself rest will maximize your productivity during the hours you job search.

Even if you don’t have extra money for entertainment, a walk or visit to the park can do wonders to help you go back and attack your job hunt.

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9. See What You Can Sell

Another good way to bridge the gap between jobs is to sell unused possessions. eBay and Amazon are both secure sites, but traditional garage sales are a fine option too. Sell off a few video games, or some electronics, for some quick and easy cash while you figure out a permanent solution.

10. Take a Course

Much like training and certifications, taking a class can be a good way to keep yourself sharp while unemployed. Especially when you’re between jobs, it can be easy to forget this option, as most courses cost money. Don’t forget the mass of free educational tools online: 25 Killer Sites For Free Online Education

Keeping your brain sharp can help you stay focused and may even help you learn some new, relevant job skills.

The Bottom Line

While unemployment numbers are still high, there are many things you can do to better yourself and move forward. While new skills to aid your job hung might seem out of reach, there are plenty of free ways to get ahead, online and off.

Additionally, don’t forget that taking time for yourself can do wonders for keeping you productive in your job hunt. While it is a challenge, don’t give up–being unemployed can offer you extra time to better yourself, and possibly grow more qualified to find work.

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Featured photo credit: neONBRAND via unsplash.com

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