Sure, you should always strive to treat your customers like lifetime investments, but every so once in a while you’ll find yourself with a customer who seems bent on being a lifetime pain in the neck. These folks are like weeds in your garden: they choke out the sun, suck up all the nutrients, and leave you with precious little time to take care of all the good stuff. Pluck them out and everything becomes healthier, more manageable and, yes, infinitely more beautiful. I asked a few entrepreneurs to tell me how they know when it’s time to part ways with a troublesome customer. We came up with four types that you should seriously think about weeding out of your client base:
The Bully. You know the type. They’re nasty, impossible to please, and they typically abuse your most important asset: your employees. Molly Gimmel, co-founder of D2DInc., a Washington, DC firm that helps companies acquire and manage government contracts, let a client go after “they treated our staff very unprofessionally,” she says. “I went to the client’s office to check on things and my employee [who was working there] said ‘it’s been a good day; the project manager hasn’t made me cry today.’” Gimmel and her partner decided to finish the current project because “we didn’t want to leave them hanging half-way through. But as soon as the project ended, we canceled the contract for the rest of the work.”
The Tightwad. Times are tough for everyone, but a tightwad cares only about his own bottom line. He’ll beat you up on price until you’re working for pennies and then he’ll string you out for more than 120 days on invoices. “We try to “manage” customers in the hopes of keeping them,” says Mark Miller, CEO of M. Miller, a Boston-based manufacturer of luxury outerwear, “But after several repeat seasons of customers paying very slowly, we just won’t go after them to show them a new collection.”
The Chicken Little. This customer wants you to think the sky is falling every time she needs something. “We had a client who would set up artificial deadlines and we’d bust our humps and pay overtime to make the deadline,” says Peter Justen, the founder of MyBizHomepage.com, an online business intelligence engine for small companies. “Then they’d sit on the project for six weeks, make their comments and suggestions and say ‘we need it in two days.’ Even though the client was valuable, Justen ended the relationship because it didn’t pass his “grief to revenue ratio” test.
The Status Quo Joe. “It’s important for me to love what I do every day,” says Cyndee Sugra, CEO of Studio 7 Media, a technology, design, and marketing firm in Los Angeles. “When a client takes that from me, I start to question [the relationship.]” For Sugra and her staff, nothing is more important than keeping creative juices flowing. So when clients stop providing challenging work, and “we end up just being support, and they are not utilizing our capabilities to the fullest,” she’ll end the relationship. “Often, that happens because the client likes to play it safe within their own business boundaries. It drains our team creatively and at the end of the day, [our employees] just don’t feel like they have a real purpose on the project.”
source: Donna Fenn, BNET