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10.16.06
Problem Customers: Fire Them
 By Wayne Hurlbert
Problem customers and clients plague every business large and small. You know who they are after they show their true nature.
Usually, however, that discovery of toxicity is made much too late. Fortunately, you do have a powerful option. You can fire those problem customers from your client list once and for all.
The toxic client often enters the company's client portfolio during slow times or busy times. When cash flow is tight, all customers look good. The money short business person will often look past the often very obvious problems that the customer brings to the table. The busy business person doesn't always have time to screen every customer and the toxic ones slip through the net. In both cases, the problem client is more trouble than profit.
A problem client will always be demanding, both in terms of time and concessions. The most common first taste of poison is the chiselling of the price or fee schedule. While some negotiation is often necessary to land a customer, the difficult client will demand a price reduction so low as to preclude profitability. Beware of any prospect that demands pricing below even the standard profit level. The huge upfront discount required is often the first step to even further price reduction demands.
Another toxic client trait is the cosntant demand for your time above and beyond the standard amount, or even the maximum time allotted in the contract. Constant phone calls, e-mails, and in person visits are their stock in trade. Rarely is the visit to pay a compliment or a bill. The purpose of the visit or call is usually to extract more free work; or even deeper fee and price cuts. Free work is their goal, and they very often receive it, just to get them to leave the busy business person alone.
Failure to pay even the deeply discounted bill is another common practice among the problem crowd. While they are always willing to phone you, and even be irritated if you are not available, the opposite is true for their bill paying time. They are simply unavailable at any time. After completion of their contracted work, headaches and all, they are slow to pay the invoice. Many times, they refuse to pay at all. They will cite shortcomings in the work as the reason, and attempt to receive even more free work. They might not pay even then.
Become happy in your business again.
If you have a toxic client, it's necessary to fire them. Don't keep them around to drain cash, work, and energy from you and your business. If you have already completed work for them, try to collect on it. If they are never going to pay before the Sun goes nova, then the best solution might be to consider them a sunk cost and eat the loss. While that sounds harsh, the alternative is to have them become even more expensive in terms of time, cash flow, and your personal sanity.
Beware of the toxic client and stay away from them. They are never worth the trouble. If you have any on your customer list, encourage them in no uncertain terms to take their valuable business to a competitor.
Life is too short to suffer the pain of a problem customer.
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