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Why You Should Fire (Some of) Your Customers

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I didn't realize that one of the points in my latest book, Collapse of Distinction: Stand Out and Move Up While Your Competition Fails—the suggestion that you fire some of your customers—would raise so much controversy.

I'm hearing from some professionals who are acting as though I'm asking them to commit corporate suicide!

Here's what most are saying: "Are you kidding me? Do you begin to realize how tough it is to get a customer in this economy? Now, you are asking me to fire some of my customers? What planet are you on?"

Here are four of the many reasons why I passionately believe you need to review your customer list and tell some of them that you have to let them go.

  1. You don't have the time or resources to create Ultimate Customer Experiences for everybody. If you sharpen your focus by "thinning the herd," you can devote your attention to those who bring you the most business.
  2. Ever notice that bad customers complain more and take up more time than great ones? Why give your time and emotion to customers who make up a small part of your business? Center your efforts on those who are already fans . . . and help them grow to another level.
  3. Do you have customers who create bad impressions about you and your organization simply because you are doing business with them? Once I was booked by a speakers bureau to address a well-known and respected company. When the company found out the bureau had shady practices, it canceled the speech and then refused to work with me, assuming that "birds of a feather...."
  4. Are you doing business with someone who casts a negative light on your organization? Bad customers cause stress that you don't need and at levels that are difficult to manage. I had a customer who made my blood pressure spike as soon as I heard she was on the phone. We would jump through hoops to try to keep her happy, and she stressed all of us beyond description.

    I fired her. I told her that we did more for her little bit of business than we did for our best four clients combined and that wasn't going to continue. We chose to devote our efforts to our best customers. Guess what? Our team's productivity was enhanced, our best customers got even better service and increased their business, and the bad customer came back and asked what she needed to change so we could continue to work together.

Of course, the main reason to fire a customer is the one I discuss at length in my book: The customer doesn't fit the clarity of you or your organization. In other words, the customer is outside the "sweet spot" of what you do.


So, which customers do you fire? Here are three suggestions to help you decide:

  1. Eliminate the bottom. Cut loose those who take time from your efforts but aren't delivering in terms of sales.
  2. Eliminate the unprofitable. Some "good customers" are unprofitable to serve if they take too much staff time, ask for unreasonable concessions, demand expensive expedited delivery, and more. Remember, the goal for your business isn't volume, it's profit.
  3. Eliminate the obsolete. If you have only limited resources, don't spend inordinate time and money on customers from declining industries.

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Scott McKain is the author of Collapse of Distinction: Stand Out and Move Up While Your Competition Fails (Nelsonfree, 2009) (www.collapseofdistinction.com).

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  • by jmfd Tue Jan 12, 2010 via web

    Some good points about tough customers, but also a slippery slope. I would argue that you'll always have problem customers of some kind. If you drop your bottom 2 or 3%, those will then be replaced by another 2 or 3%, especially once you feel empowered from 'firing' the previous ones. The negative experience that you've now given the customer with a penchant for complaining will multiply until many, many potential customers know that you operate from a "we don't need you" standpoint. Bad customers do drain you, but it is simply a part of business and in most cases it is a bad idea to drop people who have the checkbook.

  • by CQR Wed Jan 13, 2010 via web

    I understand the concept and look forward to sharing this idea with my employer. As an account/product manager I am faced with a few clients that, no matter how above and beyond I go for them, they continue to be dissatisfied with the product - mainly because they didn't have the budget to support buying what they really wanted. It's a no-win situation with these folks and I spend so much time and resources trying to keep them happy with no return. Employing this methodology requires common-sense. You must be sure to identify and a customer service or quality issue that may be creating these "bad customers" first. Yes, technically there is always going to be a customer on the bottom of the pile, BUT not every customer at the bottom of the pile is going to behave like a "bad customer". It's all about how you handle the process. I get it, I agree and I would LOVE the opportunity to spend more time and energy on those clients who can't get enough of us.

  • by Miranda from Samarind Tue Jan 19, 2010 via web

    I agreed entirely with this but as a business owner it can be very hard to actually do it. In our organisation at least we fall into the trap of treating difficult customers as a challenge rather than finding a way to get rid of them. Also sometimes the more off-hand you are with a customer the more they keep coming back for more.

    Scott, we are in the position (as per your 4th point) of needing to tell one particular customer 'goodbye'. What do you say to him? Just that we don't want to do business with him any more or should we say why?

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