Anyone who sells a product or service knows what it's like to have problem customers. But the customer-is-always-right attitude continues to dominate business, especially now that it's become so easy for people to complain to the world in 140 characters. Bad online feedback can be tough to fight against, but that doesn't mean you have to put up with customers who hurt your company's morale, reputation, or bottom line.

"The customer is not always right and in some cases should not be the customer at all. It's time to end the fear of customers' public feedback and to start managing relationships with abusive customers in a disciplined way," Lior Arussy, the president of customer experience transformation firm Strativity Group, writes in Harvard Business Review.

Arussy writes that her firm just had to fire its largest customer because this client was hurting the firm's reputation and crushing the morale of the employees who worked with them. Arussy says they met all of their obligations and then terminated the business relationship.

Do you have any customers you want to cut off? Arussy says you need to ask yourself this: "Which customers do you want to serve and which customer behaviors do you want to eliminate?" Write down your answers and get started. Read more below to find Arussy's guide to when it's time to ditch a customer.

Define your best and worst customers.

Every company has an ideal customer--and one who just isn't worth serving. "When considering cultural fit and value, not every customer with a budget is an ideal customer. Unforgiving customers may be too costly to serve," Arussy writes. "Obnoxious, profanity-laden customers will damage employee morale. Individual customers with frequent calls to customer service are not ideal either." Try writing up both sets of traits side-by-side so you can identify the costs of serving these customers. Once you know the business impact, the next steps should be easy to see.

Train employees on problem customers.

Everyone on staff needs to know how to handle tough customers. Teach employees where the line is drawn--from the customer is always right to it's time to cut them off. Make sure they practice what to do in mock scenarios--you don't want them improvising on the fly with your largest customer.

Create a conscientious customer-firing process.

You need to have a simple, straight-forward action plan in place for problem clients. When their behavior crosses over to abuse or is clearly hurting the company, your employees need to know how to push the ejection button. "Make sure that the customer-firing process is clear cut and impactful, but ensure there is still a touch of generosity. You do not want to adopt the negativity that the customer is bringing to your business," Arussy writes. Frame the conversation as a move to "find a better fit" for the customer's needs. 

Give employees authority to fire customers.

"Employees are your company's eyes and ears. They witness which customers are worth keeping and which are not," Arussy writes. Make sure you know how the employees react under stress and abuse before you give them authority, but once you've done so, trust them to do their jobs. "Provide them with the assurance and financial means they need to make these decisions on the spot," Arussy says.

Review customer service.

By now, you already know this: people will take advantage of generosity, offers, lenient return policies, and customer service. Make sure you review your data--are people buying your stuff, using your products, and then returning them under your lifetime return policy? Outdoor gear chain REI had to change it's lifetime return policy because of customer abuse, Arussy notes. "If you offer a generous customer experience, you better believe someone will try to take advantage of it. Stay ahead of those advantage-takers," Arussy says.

Published on: Feb 16, 2015