So much has been written about delivering impeccable customer experiences and there is much to learn in how to establish the best approaches to put the customer first. But, what is a firm to do, if the customer is one that can never be satisfied? What happens when the demands made by one customer are so great that other customers feel the impact and suffer diminished service levels as a result? It's then that a firm must consider the strategic merits of terminating the customer relationship.
Indeed, when it comes to the customer relationship, there can come a time when it's better to cut bait than to fish. Here are some things to ponder when you're considering a scenario where you must end a client relationship:
1. Brand Reputation: Clearly, there is a risk that your brand will suffer in the marketplace when firing customer. To managing this risk, it's essential that you be deliberate in managing the spin - both inside and out. Communicating clearly on the reasons that underpin the decision to flush a customer should be discussed internally. Your people should come to understand why the move was important to the company. Messaging outside is a bit trickier. You must be delicate in the way that the information is shared because you absolutely cannot damage the reputation of the customer.
2. Revenue Impact: When firing a customer, it's important to compare the revenue lost, to the costs in keeping the customer. Depending on the circumstances, the calculation may actually prove to be a wash. But, when it isn't, time must be taken to offset revenue projections and re-calibrate related internal measurement / commission structures to keep any effected personnel whole. You don't want your sales team, for example, feel the pain of a lost customer.
3. Morale: It's very likely that morale could tick upward when word gets out that you've fired a particularly tough customer. But, keep an eye on that because you don't want an internal negative reaction to losing a customer to ripple through your business and affect behavior down-the-line.
4. Service Delivery Changes: When firing a customer, exploring the need to modify how service is delivered going forward is an important idea to keep top of mind. It's possible that an overhaul of your service delivery model is needed to prevent this kind of negative customer relationship from coming up again in the future.
5. Redefining Customer Targets: Another important consideration is related to your customer profile. If you don't have one then you may want to create one that can be used to qualify customer targets and, if one does exist, it may need refinement and adjustment to caste the ideal customer profile - one that may be helpful in avoiding future customer problems tomorrow.
To close, this list represents only a handful of the considerations that a firm must account for when contemplating cutting a customer from the fold. However, these 5 are the most essential to think through before pulling the trigger. For more, please reach out to me directly. I welcome the opportunity to help out.