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Fire your customer

There comes a point in every growing business that you reshape, restructure and reposition your business!

Bruce and Pavlo chatted last night about if there is ever a time when you need to fire a client. Listen to the full show here.

Clients that may have been of value as you started your business may no longer be worth doing business with.

How do you know who you want your customer to be?

You need to lead the process. Know what business you are in. Ensure that your operations are consolidated. Make sure your ahead of changes in technology and innovation and adjust your offering accordingly.

After that you consider who you don't want to deal with - this may be a bad payer or someone who requires something that is no longer your core offering.


But there is a right and a wrong way to fire a client.

Consider the following:


1.    WHO:

Ask which customers are important for your success, how you define it and how you measure it?

You may need to consider:

  • Brand and strategic messaging
  • Cash flow
  • Sales volumes
  • Buying volumes
  • Building muscle and showing its there
  • Always apply the 80/20 rule and what is the real impact on your numbers and productivity (asset and resource allocation)

2.    HOW:

Plan it

  • Measure your revenue concentration
  • Market hard to recover and spread your risk
  • Lock down your best customers to anchor the shift
  • Put a recovery plan in place
  • Unprofitable customers – get them profitable
  • Unpleasant customers – change your level of service; make it more arms length service provider style rather than a closer partnership style
  • Profitable customers – lock down and deepen sales. They like what you have to offer right?

3.    IMPLEMENTATION

Practically you can do the following to implement your firing strategy.

  • Renegotiate terms and conditions of service or supply 
    • It’s not personal, so list the issues and work hard to get them to see reason
    • Listen carefully because maybe you are wrong too
  • Issue a price increase and provide ample warning. This may result in them firing you and preventing awkawrdness.
  • Request new payment terms, this has the same affect as the price increase.

Always remember, play the ball, not the man…or woman!

Tags: The Money Show

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