Ever had a customer whose nuisance value exceeded his profit potential? Or who demanded champagne service at beer prices?
The fact is that some customers just aren’t worth it — but how do you deal with such a situation?
The first step is recognizing that the relationship needs to end. Some of the signs that suggest you may want to take that step include:
- The client doesn’t respect or appreciate your work.
- They make excessive demands on your company and staff.
- They are not fair-minded in either their expectations or what they are willing to pay.
- They want work done cheaply and under unrealistic deadlines.
- They don’t want you to make a profit.
- They pay bills slowly, or sometimes not at all.
- They push you to the limit in all areas, taking advantage at every turn.
- They see you as a disposable vendor, not a valued partner.
It’s always a good idea to try to fix the problem before you simply drop the customer. Put the offending party or parties on notice. Talk to them. Outline what the problems are, what the possible solutions are, and ask for their cooperation to help reach those solutions. Be sure to document these efforts to you can refer to them later, if necessary.
If your attempts to make the relationship mutually productive don’t work, it may be time to move on.
Calculate what you will lose in gross revenue, and decide if your business can stand the financial hit. If it can, use the time you had been spending on that client to focus on more profitable clients and prospect for new business. If it can’t, put up with the current problem until you can replace that client’s vital gross revenues with one or more new clients.