Should You Ever Fire a Customer?

Should You Ever Fire a Customer?

It’s not in our nature to even think about it.

It is rarely, if ever done and when it is, it’s usually ugly. There is nothing in our sales and marketing mentality that may cause us to think that a customer should ever be fired, but . . .

The Sad Fact is Sometimes Customers Should be Fired!

In our last post we talked about calculating the lifetime value of a customer (LTV). This is an important metric which will bring added accountability to your marketing effort, but what about customers who are not now, nor will they ever be profitable. Do we wear them like a ball and chain for the rest of our corporate lives?

Of course not!

Customers generally fall into the following categories:

• Category I–Those that should be fired–These are customers who are not currently profitable and not expected to become profitable. Hopefully you don’t have many of these, but even if they are few in number, they are a powerful drain on your resources.

• Category II–Those that should be disciplined–These customers are currently not profitable, but you expect that they could become profitable if they could be “encouraged” not to abuse you, your people, your systems or engage in behavior which is expensive to service.

• Category III–Those that should be managed–Things may be going well with these customers, but you want to make certain their expectations are always realistic. Educate them. Help them understand how to have a mutually beneficial relationship with you. And let them educate you. Let them tell you how they want their product or service from you.

• Category IV–Those that should be rewarded–This is the category in which you hope to find the majority of your customers. This is the group that pays the freight. They are loyal, cooperative, consistent and profitable. They have invested time and energy in teaching you how to serve them and you have apparently learned well. The more you learn from each other how to maintain a mutually beneficial relationship, the less likely they are to pursue engagements with your competitors. These customers deserve special treatment.

The ultimate goal is to move as many customers as possible into Category IV . . . But How?

What strategies are most effective in moving customers from Catetory I into Category IV? Click here to download the complete article Should You Ever Fire a Customer. Learn what strategies to employ to move your customers into a more positive position. Give us a call at (509) 922-0535 or drop us an e-mail and we’d be happy to discuss these strategies with you in a free, no obligation consultation. We’ll help you determine your best customer strategies and help you leverage that information for increased marketing effectiveness.

The Mecham Company has been helping manufacturers and other business to business marketers increase their market share, sales revenues and profits since 1988. Let us help you put a program together that will bring the marketing and sales results you need. Give us a call at (509) 922-0535 or send us an e-mail. We’re here to help.

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