When a customer is costing you more than they're bringing you, it's time to take action.
In your working life, you've probably had plenty of experience dealing with people who are, let’s say, difficult. Sometimes it’s a coworker, employee or manager, but sometimes it’s a customer or client. When they call or come knocking, your reaction is something like, "Oh, not him again." Certainly that’s been the reaction of some members of Congress to their colleagues over the last few weeks.
While elected officials don't always have a choice in who they deal with, as a small business owner or entrepreneur, you do. In fact, you’re obligated to deal with difficult clients in a way that best helps your company succeed. Because if someone is difficult enough that he or she is slowing down your business by making it hard to move forward on projects, you can’t always afford to let the relationship continue.
Here are three rules to live by when dealing with challenging customers.
Rule 1: It’s Okay to Say 'No'
Unfortunately, the customer is not always right. I’m a believer in doing whatever you have to do to keep a customer within reason, but, as the leader of the business, you get to define what is or isn't reasonable. If you’re running a small business and one client is taking up an exorbitant amount of your time and resources, you can’t be afraid to say no.
Let your customer know you understand their request and explain why it’s not possible. It’s better to be honest and do what’s best for your business than to try to please the client at all costs.
Rule 2: It’s Okay to Fire a Customer
You run a business, not a charity. You can’t afford to give away services or bend to every whim of every client when it’s not going to generate a return for the business. And the client should generate a return, not just for one project or one month, but over the long haul to make it worth your while.
You do, of course, have to be careful of the risk to your reputation when you let a client go--although, in some cases, others that know the person might respect you even more. You just have to be sure your reasoning is sound. As difficult as it might be to let go of business, if a client is costing you money, sometimes it’s best to cut ties and have them find a better fit.
Rule 3: It’s Okay to Put Your Staff First
If your client is being abusive to your staff, sometimes it’s important to show your staff you’re willing to put them first. The way you treat your employees is ultimately going to be one of the biggest drivers of how they treat customers.
So when a client becomes abusive, it’s often time to take action (see Rules 1 and 2). You may lose the client, but the alternative could be losing important members of your team. And your team is what makes your business great.
MICHAEL ALTER is president of SurePayroll, America’s leading online payroll service. He received an MBA from the Harvard Business School and holds a bachelor's degree in economics from Northwestern University. @michaelalter