subject: Is It Time To Fire That Customer? [print this page] When was the last time you let go of the client?
Conservatives seem intuitive, but saying goodbye is sometimes the right thing to do.
Recently there was a study of an interesting case in the Harvard Business Review in which the company had begun using activity-based costing to assess customer profitability. The case is an interesting dilemma of whether the company concerned and should make it one of the oldest and "best" to customers because it has become the loser in recent quarters.
While we all hope that the customer gives positive returns (unless you are running a charity), and the fact of the matter is that customers sometimes are more expensive than they spend. When this happens, it may be difficult to decide whether you should cut your losses and move on or keep the relationship alive, waiting for better days to come.
Any decision without all the facts - or at least as much information as possible to get - is likely to be bad. Unloading reflex client decisions in the face of a bad quarter, support costs may be unusually high, and other temporary problems are likely to be more expensive in the long run. Invest the time to take a deliberate, carefully designed for the process to assess the real value of the client is naturally intelligent work.
Customer value takes many forms. Of course, there is a back and white, dollars and cents P & L. This can measure the return on investment that seem simple from customers can be misleading, because if he does not take into account the intangible assets. Even with the cost basis of the activity. Which allocates operating costs to customers compared with the size, and can be figures may be misleading.
What are the additional factors taken into account when weighing when to fire a client? Here are some questions to ask before making this important decision:
If this is a great client, what is the value in terms of clarity and hiding relations brings to your business? You can put this number on it?
What is the value of customer relationships with the leaders in question? Are the leaders in your field of influence on others in the space? Does not affect these relationships affect your business in the broader context of your industry?
Is a client of the person who accepts, for sure that the offer of a new beta trial? To refer or to provide support and certification? These are important contributions to your business in the future, and can be difficult to replace.
Is this company more innovative than others in your wallet? Do not always say "yes" to the new offerings to help you to sign on other, more reluctant to accounts?
What is the value of the lives of potential customers? Is there any upside that you can do with more sales in the long run? If facing a temporary setback, it may be useful to wait some time, or help them even if there is something you can do to maintain the relationship.
Must consider all these elements when evaluating the World Health Organization to keep and which to leave. It is clear that there is a dashboard that does not tell you when to split with the client, but if you take the time to look at the big picture, and you will be in much better position to make an informed decision.
Finally, I suggest you make the process of assessing the client as part of a coherent business that annual reviews of staff performance or strategic planning sessions. A disciplined approach to evaluate the customer will allow you to carve consistently losing customers that are not strategic assets, and create space to do more for those who are the perfect solution for your business.
Joellyn "Joey" Sargent is director of the company BrandSprout, and Atlanta-based marketing and strategic and management consulting. Joey brings new perspectives to the issues of hard work, and to help its customers succeed by building awareness, and involvement of customers and increase market share.
A passionate advocate of entrepreneurship, which was founded three companies, air, and was a prominent leader of the Ascension beginning of the two, and has worked for Fortune 500 companies, including UPS, and BellSouth (now AT & T). With experience as a world leader in, and trademark and communication strategy, Joey advises business owners on the amazing growth strategies, building a stronger marketing team and take advantage of the technology for maximum impact.
