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How to Fire a Bad Customer

Firing a customer may seem like a daunting proposition in this economy. But, sometimes, it has to be done, according to this article by Anne Field from the OPEN Forum. The wrong customer can lead to everything from employee resignations to declining profits.

Customer-serviceWhat exactly constitutes a bad customer? That depends on your business. It can mean someone who simply isn’t profitable, demanding more time than is cost-effective. But it also might include a customer who consistently pays late, is never satisfied, requires too much hand-holding, or is downright verbally abusive.

 

Be sure to consider the following:

  • Figure out if there’s another option. Assess the root cause of the problem to see whether there’s a way to fix it.
  • Watch your timing. Make the change when it will have minimum negative impact on your company.
  • Dial down on the antagonism. It's best to wait until a natural pause in the relationship (for example, when a contract expires). Then, be as diplomatic as possible.
  • Take it slow. Unless the situation is urgent, phase out clients slowly.
  • Decide whether it means something bigger. If you continue to attract bad customers, there could be an underlying problem with the business.
  • Learn the red flags beforehand. Then you may avoid dealing with bad customers by not doing business with any to begin with.

Read the full article here.

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Tribute, Inc. is a provider of ERP business management software for distributors and system integrators in the fluid power, hose, motion control, automation, fluid handling & pump industry who provide value-added services.