Strong customer relationships are the cornerstone of small business success. At some point though, businesses are bound to encounter a customer (or two!) who cost the business more than they contribute. While no business owner ever wants to lose customers, retaining those that aren’t a good fit can consume staff resources, add delays to higher value clients, and erode employee morale and engagement.
Sometimes, it is in a business’ best interest to cut ties with costly customers. However, for the sake of your business’s reputation, it’s imperative that you do so in a way that’s both professional and well thought out. Here are my top three tips for breaking up with bad customers without losing your cool.
1. Can the relationship be saved?
There’s a difference between difficult customers and those that are truly harmful to business. Particularly difficult customers can blur these lines. To identify which camp a customer falls into, you need to first identify why they are being “difficult.” Are they dissatisfied with your products or services in a way that can be addressed? For example, is there a breakdown in customer service or did you fail to fully meet the terms of a contract? Thinking objectively about a customer’s pain points—even if they fail to convey them in a professional manner—can reveal opportunities for improvement throughout your business and improve the customer experience for countless others moving forward.
To tell if you have a toxic customer on your hands, consider:
- Do they use abusive or aggressive language when communicating with you or your team?
- Do they often question or undermine the expertise of you and your employees?
- Do they repeatedly threaten to leave bad reviews unless you provide something extra for their “trouble” (e.g., free products or additional labor that wasn’t part of your original agreement)?
- Do they disregard codes of conduct (e.g., shouting, refusal to wear a mask, offensive comments on social media)?
If a customer demonstrates any of these behaviors, it’s likely time to part ways. Even high-paying customers simply aren’t worth what they will cost your team in terms of energy, time, and lost morale.
2. Decide & deal with it!
Once you’ve decided to cut ties with a customer, it can understandably be difficult to follow through with it. However, delaying the decision can allow frustrations to mount and make the conversation less civil and more difficult.
Avoid any flare-ups by making the decision quickly and following a professional process. Of course, every situation will be different, so you must decide the best way to proceed based on the specific relationship – and any legal terms under which you’re operating.
What are the terms of your relationship with the customer? Do you have a legal contract that specifies which products or services you’ll provide? If so, you need to review the terms carefully to avoid costly consequences for breach of contract.
Next, consider the relationship’s nature. Do you typically communicate in person or digitally with the client? For more personal client relationships, you might want to schedule an in-person meeting. In cases where you normally meet face to face, “breaking up” over text or email can seem amateurish. However, in the case of online-only customers, email communication provides a simple, direct method in which to make your case for concluding the relationship.
3. Plan what to say.
Whether you’re breaking up in person or online, it’s helpful to prepare what you want to say ahead of time. This can help combat any nerves, and keep you “on message” if the customer responds angrily. Avoid long-winded explanations or statements that assign blame (e.g., “You violated our agreement.”) Instead, explain the issue at hand, such as that the terms of the customers’ agreement were exceeded. Then—and most importantly—explain what steps you will take to help the client smoothly transition to another business or service provider to alleviate any inconvenience. If you do meet in person, follow up immediately afterward with a written recap of the meeting while the conversation is still fresh in your mind. Preparing that summary beforehand makes it easy to add any particulars and make it official.
It may be the case that a customer’s needs have outgrown your business; for these individuals, provide a list of legitimate companies who may be better equipped to serve them to help end the relationship on a positive note. Doing so will demonstrate that you still have the customer’s best interests in mind—adding the potential that they recommend you to others—perhaps leaving the door open for them to return, should their needs (or attitude) change.
Every business needs customers, and it can be a real challenge to lose any of them. But the time and energy your team will gain – once the breakup with obnoxious customers is complete – makes the near term pain worth it. Your team will likely be happier and more productive, and you will have sent them an important message about how you view their talents and time. Critical sales and success resources can then rededicate themselves to more rewarding customer relationships. Retailers long ago made the motto “the customer is always right” a service business mantra, but times change and not everyone is worth your team’s time. Identify them and rid your business of people who will never be happy, and your team will thank you.