Inc.com posted a terrific article this week explaining why its sometimes all right to say no to a customer. In fact, some entrepreneurs are discovering that ditching problem clients actually helps their bottom line in the long run.
There are several reasons why a company would choose to part ways with a customer, chief among them is to preserve precious business resources. "Janine Popick, founder and CEO of Vertical-Response, a San Francisco company that provides e-mail marketing services, decided she needed to focus on her company's core customer base," writes Inc.'s April Joyner. "In VerticalResponse's early days, Popick rarely turned down a customer's request. But after diverting nearly all of her company's manpower to an advanced e-mail sorting tool built solely for one large client, Popick decided it was best to part ways with that client.
Sometimes clients don't keep up their end of an agreement or contract, and that's another perfectly valid reason to tactfully ditch them. If you're spending excessive time goosing a customer into paying an overdue bill or reworking projects more than you should, it might be time to say goodbye.
Customers may also need to be shown the door when they ask you to lie or lie to you, and when they're consistently abusive or hostile to you or your staff. Indeed, in most of those situations a quick "divorce" is probably the best option.
That said, parting ways with a customer is never easy, particularly in this economic climate. There are a few steps you can take, however, to make it a little easier.
1. Make sure you have proper documentation of the incidents leading up to your decision. Include copies of contracts, account receivables forms, and notes on specific situations that caused you to sever your relationship with the client.
2. Acknowledge your part in the situation. While it's not necessary (and unadvisable) to assume all the blame, tell your customer know that "you're not the right fit" for them or use some other terminology that clearly communicates it's a genial parting of ways and you're not pointing fingers.
3. Offer a referral. Don't leave the client stranded in the middle of their project, no matter how much you're tempted. Instead offer to refer them to another company or provide them with a list of people in your industry that might be willing to take them on.
4. Keep quiet. Once the matter is resolved, don't bad mouth your former client in public. Telling everyone about the situation at your next at your next industry meetup might make you feel vindicated but it will make you look unprofessional.
Flickr image courtesy of Mac Babs - Barbara Bessa.
Posted at 07:34AM Nov 12, 2009
by Joann Yates in Sun
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